Evidence of meeting #155 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was content.
A recording is available from Parliament.
Liberal
Randy Boissonnault Liberal Edmonton Centre, AB
So then the broadcasting outlets are able to still contribute to the Canada Media Fund, because they are profitable.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
Those are the distribution units that contribute to the Canada Media Fund. They continue to be able to contribute, and they do. Generally, we require that about 5% of the revenue goes toward the support of programming, which includes the Canada Media Fund.
Liberal
Randy Boissonnault Liberal Edmonton Centre, AB
Do you believe the Canada Media Fund is still able to fulfill its mission?
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
The Canada Media Fund has a very important role, and it's quite critical to the system. They are performing their mission as intended, but over the long term, the following is the important question: As the revenues of the distribution units continue to decline, does that 5%, which is based on revenue and not profits, also decline?
Liberal
Randy Boissonnault Liberal Edmonton Centre, AB
Would you agree—I think you alluded to it or mentioned it in the report—that it would be inappropriate to have one system for the legacy players and an entirely new system for the new players, and that we have to be quite creative in how we approach contributions to the Canada Media Fund and Canadian content in general? Are those the general broad strokes of what came out in your report?
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
The current act does say that it's all one system. I think what we're saying is that you cannot simply apply the current tools to all players, and in particular the new players. We need to be adaptable and to come up with the right tools and the right levers and the right contributions for each type of different player. Each entity is quite different. When you're looking at a radio station and when you're looking at someone who provides on-demand music, they're quite different. A completely different approach is likely needed for those two services.
Liberal
Randy Boissonnault Liberal Edmonton Centre, AB
I have one minute left, but perhaps I will have to ask my question in the second round.
Had you given me seven minutes, Madam Chair?
Liberal
Randy Boissonnault Liberal Edmonton Centre, AB
I have two whole minutes. That's amazing.
Let's talk about one of the more controversial or interesting parts of your report, which is the proposal to have an Internet tax for Canadian consumers. This is like taxing the Internet of things. It's not just ISPs. It would be devices, computers and all of that.
How would Canadians be affected by the imposition of such a new levy, a new tax?
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
I'll use the word “levy”, because we cannot impose taxes from the CRTC's standpoint, so it would be a levy or regulatory charge.
Currently, all telecom services contribute towards what I call the “social objectives” of the Telecommunications Act, which include expanding broadband into rural areas. Broadcasting entities such as distribution units and cable companies also contribute a percentage of their revenue to the CMF, for example, and other forms of programming.
As networks are converging, what the report suggests as one example of the things we can do is to merge those two social obligations, essentially, as the market is also converging, as people are getting video distribution products via both platforms together. We're not asking or wouldn't be suggesting that Canadians pay more; it's just a harmonization of their obligations.
Liberal
The Chair Liberal Julie Dabrusin
Yes, you are done.
We will be going to Mr. Shields for seven minutes.
Conservative
Martin Shields Conservative Bow River, AB
Thank you. I was enthralled by his lines of questioning and, as always, by his knowledge. I appreciate it.
I'm an old guy. I remember the first time I saw a TV when we trucked over to the neighbour's place to see it, because they had the only TV. I remember when we first sat and watched for the test pattern to come on, and then sat and watched the test pattern for half an hour. I remember the first night when we all got together with somebody who had colour TV when it came on the first time.
As for demographics, when you talk about 17%, and you talk about those numbers, the demographics of 17%....
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
That includes all Canadians in all demographics, but it's primarily younger Canadians who are—
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
Thirty-five and under is what we have in our opening remarks. It's where you see a greater proportion—and, quite frankly, if you're looking at 20 and under, they're not even sure what a cable company is at this point in time.
Conservative
Martin Shields Conservative Bow River, AB
My adult children are all older adult children, and they don't understand why we have a landline in our house. They don't watch TV for anything other than downloading something—all three of my adult children and their families. They don't have cable; that's gone, and they are 40-plus in age. They have gone from that generation.
Is profitability still there without government funding?
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
I think we're speaking of profitability with respect to cable companies or distribution under these things—
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
—that don't receive any federal funding for their operation—
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
—they contribute towards the objective. I think that was the objective of the other side.
We don't regulate for profitability. A healthy, profitable industry is important to contribute towards the creation of Canadian content. What our position is in light of all of the changes, both current and those to come with the younger generation reaching more into the years where they would have otherwise purchased some of these traditional services....