Thank you, Madam Chair.
Madam Chair, members of the committee, thank you for inviting us to appear and provide you with Cogeco's perspective on the media and local communities. My name is Louis Audet, President and Chief Executive Officer of Cogeco. With me today is Nathalie Dorval, Vice-President, Regulatory Affairs and Copyright.
Cogeco was founded by my late father, Henri Audet, six decades ago. We made our first steps in the media industry in 1957 with a single conventional over-the-air television station located in Trois-Rivières, Quebec. As we all know, the media industry has changed dramatically since that time, not only in Canada, but around the world.
Throughout these six decades, Cogeco has embraced change and adapted its business activities to the new realities brought about by technological, social and economic changes. It is this ability to adapt that underlies the enduring success of our company, which provides employment for over 4,600 people.
We are no longer involved in conventional over-the-air television broadcasting, nor are we involved in the print media, though we were for eight years. We do however operate 13 local radio stations in the province of Quebec, and we provide community television services to many local communities through 32 distinct community channels in the provinces of Ontario and Quebec. We also make our French-language radio news service, Cogeco Nouvelles, available to more than 40 additional independent local radio stations in the province of Quebec. Our remarks today are, therefore, focused on broadcasting in the digital world and on how local communities can still be served in this digital world.
You have heard this before from other witnesses, but I will confirm to you that the landscape has changed dramatically for traditional broadcasting media in the global digital age. Audiences continue to migrate to digital platforms for their information needs, advertisers continue to shift their advertising dollars to Internet-based media, and Canadian consumers—particularly young people—are looking for more instantaneous, ubiquitous and interactive ways of informing themselves, mainly over the Internet.
From a public policy perspective, what should we do or avoid doing in the circumstances?
First, we need to recognize that the trend I have just described is irreversible.
Second, we must focus our efforts on effectively transitioning our broadcasting media to the new operating models available in the digital world, and yes, that includes the production and exhibition of local television news and information programming.
Third, we must avoid robbing Peter to pay Paul—for example, taking money away from the community television sector to subsidize the public and private sector traditional, over-the-air local television stations.
Fourth, we should stay away from direct funding of television news and information programming by the state. This idea would add to the risk of undermining our democracy.
We made these points to the CRTC during their recent proceeding on local and community television in more elaborate submissions backed by detailed data available on the CRTC's own website. Our submissions to the CRTC are also publicly available on the CRTC's website, and you may find them of interest as a complement to our appearance before you today. In addition, courtesy copies of Cogeco's final comments and oral presentations at the CRTC hearings have been provided to the clerk of this committee.
We pointed out that conventional over-the-air television stations in Canada are, for the most part, owned and operated by four large vertically integrated groups, mainly BCE, Shaw, Rogers, and Quebecor, which collectively control over 79% of all commercial television revenues in Canada.
These large and very profitable groups, which are present on all traditional and non-traditional television platforms, have the financial resources to transition their local news and information operations to the new realities of the digital world. They should be allowed to do that—to pool the resources from their various media and platforms—and be required to provide local news components in the local communities that they are licensed to serve over the air. As cord-cutting intensifies, over-the-air broadcasting will take on added importance to reach all Canadians and foster a common cultural base.
As for the public sector, mainly the CBC, it is for Parliament to decide whether its mandate should be revised to specifically include the provision of local television news and information in both official languages and whether the CBC's parliamentary appropriations are sufficient to support the fulfillment of its mandate should it be so revised.
This leaves only 19 small, independent, conventional local over-the-air television stations operating in small markets that need to transition to new operating models to avoid being forced out of business by declining audiences and advertising revenues. Since they are required by the federal government to vacate their over-the-air broadcasting spectrum, the federal government should provide them fair compensation for doing so out of the proceeds of the auction for the spectrum that will be taken away from them.
We also presented to the CRTC earlier this year a plan to offer, through our community channels, professional local news programming in up to seven local communities in the province of Ontario and seven local communities in the province of Quebec that are without any local over-the-air television service. Our plan is based on our experience in North Bay, Ontario, where we've been providing local television news on the community channel since CTV closed the only local over-the-air television station in that community several years ago.
We hope you've found this presentation useful and we'll be pleased to answer your questions to the best of our abilities.