Evidence of meeting #31 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 crtc.
A recording is available from Parliament.
12:35 p.m.
Liberal
12:35 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
Well, no. I've repeated what every broadcast CEO tells his shareholders: “I didn't lose this quarter. I'm good.” That's what is reflected in the “flat is the new up” phrase.
We hear about a variety of challenges, but really the challenge is that radio relies on advertising, local television relies on advertising, specialty channels rely in part on advertising, and the CBC relies in part on advertising. The advertising business is it.
Yes, eyeballs may have gone to Netflix, but the advertising business is what is certainly having a wider impact on what's happening in our broadcasting industry. A number of different players have entered the advertising business, and what we're trying to do with a lot of our nudges and our small changes to the broadcasting system is to motivate our broadcasters to, in part, move into that new field, that new digital field, so that they can monetize these new platforms and not let other people eat their lunch and take up all the growth.
All the growth in advertising is being taken up by new platforms. Those new platforms aren't all broadcasters. Netflix doesn't go after advertising revenue, so the problem is wider than just one entity. That's one message I want to leave with you on that aspect.
With respect to our own mechanism, the broadcasters that you mentioned came to us also in our hearings and complained and indicated that they were competing with one hand tied behind their back with respect to over-the-top digital products. What we put in place is a level playing field for them under our own rules.
Most of what is being produced out there is being produced by other entities, so we put them on a level playing field with these over-the-top providers. We provided them actually with a bit of a leg up, because they can use the traditional broadcasting system to distribute their products to Canadians through what we call our hybrid VOD—video on demand—exemption order. It's for CraveTV, it's for illico, it's for Tou.tv, so that they can go forward and serve Canadians and be able to compete on an equal footing with respect to our rules.
I think what the chairman was talking about was essentially that there is another area, a matter of fiscal policy—which is outside our purview—that companies are probably still coming to see you about and want to see addressed.
12:35 p.m.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
It still concerns him as a private individual. It concerns him as a citizen that there's no contribution being made by Netflix on bandwidth that we provide—
12:35 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
I'm here to talk on behalf of the CRTC and not the chairman.
12:35 p.m.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
—to contribute to Canadian broadcasting in the way everybody else does.
12:35 p.m.
Liberal
The Chair Liberal Hedy Fry
Mr. O'Regan, I will factor in this little intervention.
I think, as we heard before, we're treading on ground here that means the executive director cannot actually comment too much on what his boss said. Let's leave it there for a moment. He has said as much as he could. We still heard what Mr. Blais said.
12:40 p.m.
Liberal
12:40 p.m.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
Very good.
Let me ask you about data, because that's something else that we heard about in this committee back in February from the Forum for Research and Policy in Communications. They were worried about the lack of data, saying that a lack of data makes it “impossible to know if Parliament's objectives for local broadcasting are being met or whether the consolidation of ownership has strengthened or weakened local broadcast news.”
They recommended that the CRTC revise its data collection and reporting systems, particularly with regard to the fulfillment of the objectives set out in section 3 of the Broadcasting Act, which gets to something very fundamentally important. If Parliament has dictated this and has said this is its will, and we don't have the capacity, the data, to measure it and enforce it, that is obviously of great concern to parliamentarians.
Can you comment?
12:40 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
We have already a rather robust data collection practice, and we report significantly on the data we collect. I think they might have made those comments in respect of local news and local information, and I think we heard in part what they were concerned about.
What we put in place with respect to our latest decision in fact digs deeper and has more specific requirements with respect to local presence, local reflection, and local relevance. For the localness part, I think what they might have been saying was that essentially we had a number of hours, but we couldn't say whether that was news or whether that was news about international matters or whether it was very specific community-reflective news.
With the new mechanism that we put in place, we've changed the data requirements around local news to hopefully make sure that we have proper data and to ensure that local broadcasters in fact are present and relevant and reflect their communities.
12:40 p.m.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
I think we've all seen it. We're not all experts here, but all are viewers or consumers of media, and I think we've all seen attempts to make something look or appear local when in fact we all know.... It must be difficult to quantify that, but the attempt has to be made in order for us to be able to enforce the will of Parliament. Are you saying best efforts are being made?
12:40 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
Best efforts are being made to quantify, but we've also put in place a number of qualifiers and have put in place and will be putting in place, as in our hearings this fall, conditional licences and obligations on each individual broadcaster to enforce those important matters going forward.
12:40 p.m.
Liberal
The Chair Liberal Hedy Fry
You had your 30 seconds and then some.
We have 15 minutes. We can go to three-minute sessions for four people whose names are down, but it means time will be tight.
We'll begin with Mr. Maguire for three minutes.
12:40 p.m.
Conservative
Larry Maguire Conservative Brandon—Souris, MB
Thank you, Madam Chair, and thank you both for being here today.
I want to go back to the question I asked earlier, Mr. Hutton, in regard to the regulation of some of the digital industry and how to go about it, if you were going to.
On the question that was just asked about data, I believe the amount of data is very important. How do you come up with that? Do you have any concerns about regulating the digital industry in that area, and regulating the Internet as far as the flow of media content? How do you measure it?
You mentioned that advertising kind of runs the industry and, obviously, that's traditionally where it's been. I have two questions. One is what your concerns are in regulating the industry, and the other is how you see the role of those industries evolving if advertising isn't a big chunk of it in the future.
12:40 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
What we've been trying to concentrate on is broadcasters and those who have traditionally been producing the important content that meets the objectives of the act. A lot of our recent decisions have been moving toward nudging them to take new risks by giving them the flexibility—and I know people don't like that—to make different choices and to be able to reach out to Canadians and produce that great content.
With respect to monitoring, our monitoring teams are scanning on a constant basis publicly available information and other studies, taking them into consideration and reporting on them through our monitoring report. We're finding ways, by using this information and sharing it with Canadians, to try to understand what the various impacts are.
Enterprises that are in the advertising business these days go way beyond even the traditional forms of media. You receive advertising when you light your Facebook up. For the CRTC, it is not broadcasting when you're sharing your family pictures with one another and you get an ad slotted in there. Those are areas that we won't be getting involved in.
We are starting to look at expanding the social obligations with respect to serving Canadians with disabilities. We're working, and it's not only in the broadcasting field, to ensure that the programming, when it is created by Canadian mechanisms, does include closed captioning and that the description is included. We are sort of starting, in different ways, to address the new world, but there are a lot of things out there. There are a lot of different products that are now competing for the advertising dollar, and they're not all under our purview. I don't think regulating those will help us.
We need to find new ways to ensure that the success of the Canadian content that is available and celebrated across the world continues. It's really looking at what the outcome is, as opposed to what the regulation should be.
12:45 p.m.
Liberal
The Chair Liberal Hedy Fry
Thank you, Mr. Hutton. We really have to keep this as tight as we can.
Go ahead, Mr. Vandal, for three minutes, please.
12:45 p.m.
Liberal
Dan Vandal Liberal Saint Boniface—Saint Vital, MB
Merci, madame la présidente.
Last spring, our committee heard CBC/Radio-Canada representatives who explained to us that the corporation would be increasing local content through digital technology.
Currently, in Saint Boniface, the radio program Midi plus is broadcast from Montreal. Previously, for years, this was a local program produced in Saint Boniface. The same is true of another radio program, broadcast in the afternoon, that used to be produced locally, but now comes from Montreal.
Is this approach in keeping with your local and community television policy?
12:45 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
CBC/Radio-Canada has it own licence requirements. I cannot tell you if each one of its choices respects its licence conditions.
In the beginning of our chair's mandate, in 2013, we renewed CBC/Radio-Canada's licence, which is valid till 2018. We put in place certain minimum service requirements for all of the CBC's markets. The minimum service requirements contained in our new regulatory framework are very similar to those that were established initially. Generally, for very large markets, 14 hours of local programming are required; for smaller markets, the requirement is seven hours for the anglophone market, and about five hours for the francophone market, which is slightly different.
CBC/Radio-Canada met these minimum objectives. The situation may have been different some years ago, but CBC made certain choices with regard to its activities and it is their job to justify their choices. Insofar as we are concerned, it meets its minimum objectives.
12:45 p.m.
Liberal
Dan Vandal Liberal Saint Boniface—Saint Vital, MB
Thank you very much.
Several times it was stated this morning that there's lots of money in the system for local broadcasting. Can you expand on that?
12:45 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
I think the statement was that there's a lot of money in the Canadian system. There are tax credits. There are funds, whether it's the CMF or whether it's the independent funds. There are obligations we put on broadcasters because they hold licences. There are other specialized entities that will promote film. We have the CBC, which produces Canadian content.
There is about $4 billion of either levers or actual support to uphold Canadian content, and I think that's the message we have been providing. We have a very good base, but the future is uncertain. No one knows what exactly the future business model will be for all of this. One thing is clear: having great Canadian stories told to Canadians and to the world seems to be one element of success. That's certainly been one of our messages.
With—
12:50 p.m.
Liberal
12:50 p.m.
Liberal
Pierre Breton Liberal Shefford, QC
Thank you, Madam Chair.
Good afternoon, gentlemen. We are pleased to welcome you here today.
I have a single question to ask you. This may help you, Madam Chair, to manage the time allocated to other members of the committee who want to ask questions.
As of September 2017, as you know, independent local television stations will have access to the Independent Local News Fund to help them produce local news. The CRTC expects the budget for this fund to be $23 million.
Recently, at this committee, we met representatives of Télé Inter-Rives who stated that this sum would be insufficient for them in the future. We could have put the same question to other television stations or organizations of that type and I am convinced that they would have given us the same answer.
Do you have any comments to make on this? Most of all, what is your response to this important statement by Télé Inter-Rives representatives about local television?
12:50 p.m.
Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
The Télé Inter-Rives representatives did not come to my office to tell me that the funds were insufficient. They came to tell us that they were very happy to have access to the fund in question.
I think that what they meant when they spoke to you was that the public funds allocated to support local news production only represent part of the funding. There are also many challenges around advertising revenue and the search for other forms of revenue in order to provide good local news service to the population.
With this fund, the CRTC will provide assistance that will be useful to local stations and will, we believe, allow jobs to be maintained. However, the stations have to work feverishly to continue to generate the bulk of their revenue, which comes from advertising. They cannot let up. They have to continue to develop. They have to continue to provide good service to the local market.
Télé Inter-Rives is already doing that. I know the family that manages that enterprise and I am certain it will do everything in its power to not close its stations and to pass the torch to the next generation of the family.