Canadian Heritage Committee on May 6th, 2015

[Daniel Charron, Union des Artistes]

Sophie is talking about competitiveness. What we are discussing is important because dubbing generates inflows of foreign capital into our economy and creates jobs for people at home. Those large American productions that choose Quebec and Canada represent inflows of capital that give us work, that create jobs—

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

Absolutely.

[Daniel Charron]

—and generates wealth here, instead of going to France, Morocco, Spain or somewhere else.

So we have a choice to make. Sophie did a good job explaining the efforts the Union des Artistes is making to help our dubbing industry become more competitive. There are other things we can do.

We talked about the Quebec government, whose last budget included a measure to bring funding levels back to where they were before the cuts. That's why, in our remarks today and in the brief you will soon be receiving, we provided recommendations for the federal government.

Every stakeholder in the chain has to do its part so that our dubbing industry can compete and attract major foreign investment to our economy.

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

Absolutely.

When it comes to heritage, our committee serves as a facilitator, as well as an industry regulator.

Here, things are in shambles. Apple TV has a few French-language options, which were probably dubbed in France, and Netflix has almost nothing.

[Sophie Prégent]

Yes.

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

I have a question for the representatives from Regroupement des distributeurs indépendants de films du Québec.

Do you feel as though you have enough support to deal with the problem posed by all of these different platforms that are suddenly cropping up? We always talk about Netflix, the big game changer, but a lot of other options are available.

Do you, as distributors, have the tools you need to tackle that? We've talked a lot, in this committee, about the fact that Radio-Canada television programming, as an alternative to the big screen, represented a significant market for you. Do you have the tools you need to tackle new challenges like these platforms?

[Louis Dussault]

We finance the minimum amount guaranteed to producers through TV pre-sales. Radio-Canada is currently in a funding crisis, scaling back its investments by nearly 65%. That amounts, more or less, to passing the difference on to us. It's up to us to make up the shortfall. With the arrival of the monopoly eOne, which is diminishing our market, we are basically being suffocated. That's very clear. We have to look to other sources, besides Radio-Canada, which is definitely no longer able to fulfil its mandate. At the provincial level, the situation is more or less the same with Télé-Québec, where the crisis started a bit earlier.

What we're doing now are pre-sales to TV5, an international French-language television network that is now investing money to help independent distributors cover the minimum amounts guaranteed to producers. It's important to keep in mind that this money is staying here. It's money that is helping producers make up the 15% or 20% shortfall they don't get from Telefilm Canada, SODEC or tax credits. It's funding that they absolutely have to have.

[The Chair, Conservative, Gord Brown]

Thank you.

Mr. Dion, you have seven minutes.

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

Thank you, Mr. Chair.

I'd like to thank all of our witnesses today and I have questions for each of you. So let's move quickly.

Mr. Dussault, you said you were being suffocated and you painted a pretty good picture of the situation you're in. You probably already went over this, but would you mind recapping for us the specific exit strategy to get out of that suffocating hold? What exactly would you like from the federal government?

[Louis Dussault]

Looking in the rearview, we would have preferred that the Competition Bureau not allow the merger that gave rise to virtually a single distribution company that goes after the majority of public funding. What's more, we are talking about a foreign company that has set up shop in a tax haven. It's totally immoral. It's not against the law, but it is wrong. Funding should have been given to the competitors that were left by the wayside, in other words, all the independent distributors.

Also important is the fact that most producers come to us, as independent distributors, to have their films distributed. In Canada, a producer isn't allowed to submit a production project to Telefilm Canada or SODEC without first having received a guaranteed amount of minimum funding from a distributor. That's how it works here. And we finance that guaranteed minimum funding through TV pre-sales. The solution would be to capitalize independent distributors.

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

What do you mean by capitalize independent distributors?

[Louis Dussault]

I think it's called capitalization funding. Not that long ago, many distribution companies were capitalized, Alliance Films, Films Séville, Maple Pictures, TVA and Equinoxe Films. A number of distributors could afford to invest in film, but that isn't the case anymore. You have Entertainment One, a huge company, and you have the independents, who do a lot of work to support film.

Three or four years ago, I would distribute two or three Quebec films a year. This year, however, I'll be distributing 13 Quebec films because there aren't any other distributors. They all come to us for help. And the problem is that we are private companies with very little access to capital, with reduced TV licences. More lax regulations—

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

What does that mean for the federal government? What should it do?

[Andrew Noble]

Certain regulations around Canadian content were relaxed. English-language TV networks in Canada used to buy films all the time. For example, Citytv used to broadcast Canadian films every day, but that's no longer the case. The network doesn't buy films anymore.

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

Would you like the government to take action with respect to—

[Andrew Noble]

Specifications are gone. CBC spends very little on films, and budgets at Radio-Canada have been slashed so much. They were our main partner.

[Louis Dussault]

So it's necessary to once again regulate—

[Andrew Noble]

—instead of deregulate,

[Louis Dussault]

—and restore the funding that was cut, especially to Radio-Canada.

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

You mentioned a lot of things, but if I have to ask you to clarify or further develop one aspect, what do you mean by the way to enhance public engagement? I was intrigued and found it interesting that you mentioned that, but how can we, as the federal government, do it? What should we do in order to increase public engagement for movies?

[Virginia Thompson]

I think the system has to change. Right now we have funds that are given to distributors to market films. We've just heard that we have very few distributors in English Canada. We really have one, and they're world market distributors. A film like Corner Gas, which is a big Canadian success story, was not of interest to them.

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

It was the same point that Mr. Dussault knows.

[Virginia Thompson]

That's right.

We were able to convince Telefilm to provide the producer with funds they would naturally have given in marketing support to a distributor and bolster our capacity to market online. That was very helpful because, with not a whole lot of money, a producer online can be very effective.

The current system is in silos. Producers are meant to deliver films and distributors are meant to market films. In English Canada, where there are few distributors in the world of consolidation, my suggestion is to look at the funds that would naturally go to our distributors, and if producers have strong marketing suggestions or plans, they should be able to access some of those funds.

Furthermore, I think there's a lot of scrutiny. When you work with Telefilm Canada, you have to provide a marketing plan and a marketing budget. A distributor has to do the same thing. If there were a way for Telefilm to push the producers and the distributors together to market the film it could be very effective. At the end of the day, the audience doesn't care who distributes the film.

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

I agree.

[Virginia Thompson]

They don't care who produces the film. They don't care about me. What they care about is the story of the film and the filmmakers.

To access them, the manager of those filmmakers is the producer. So a distributor.... It's very difficult for them to find those people. If the producer is engaged and funded there could be some exciting engagement online to bring our stories to the world.