Canadian Heritage Committee on Oct. 25th, 2016

[Heather Conway]

I will have the opportunity.

It always rankles me when I hear people say we lost hockey. When I talk to staff and audiences and Canadians about it, I always say there was no scenario where CBC was going to pay $5 billion to mostly U.S.-based billionaires. That was never going to happen.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

That's right.

Thank you.

[Heather Conway]

To suggest we lost hockey, like we screwed up somehow, is actually not a fair characterization. The cost of professional sports rights is through the roof. It's not a great use of taxpayers' money, and that's by and large why we are out of the big, expensive professional sports rights.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Yes.

[The Chair, Liberal, Hedy Fry]

Thank you, Ms. Conway.

That's it, Mr. Waugh.

We will go to Mr. O'Regan.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Thank you, Madam Chair.

Thank you to all three of you for appearing in front of the committee.

As you know, this is a new government in place. We've made a significant commitment to you, as the shareholder, but we also want a significant rethink of all of our cultural institutions and important institutions like the CBC. As the minister has said before, everything is on the table, and there will be a fundamental reshaping, I think, of cultural institutions in this country in the coming years, so your appearance here is important and your responses are important.

I grew up in Goose Bay, Labrador, and I'm happy to say that my first employer was the CBC. At the age of 10, I was working for a morning show called Anybody Home? on Saturday mornings. I was bemused that anybody would be listening to radio instead of watching Saturday morning cartoons, but it does bring home the point—and it's relevant even today—that there are a lot of people in small, rural, and northern parts of this country who do rely upon radio.

To say that people are in the digital space is true, but it is not for everybody, and it is not for a significant and very important part of our population, those who are rural. While I understand that the infrastructure is not your responsibility, the mandate of making sure those people are serviced in local news is, I think, a part of your mandate.

[Heather Conway]

I would agree.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

To my point, everything we have heard in the past number of weeks.... I only have a few minutes, so let me summarize and say that local news is in crisis. In terms of local news, areas that aren't sexy or are a little more remote are starving for local information.

I keep coming back to a phrase I've heard repeated by, I think, each of you and that I think will be our northern star in the next year or two: if not the public broadcaster, who? I think that's a very important point, because it does translate to The Tragically Hip, which was a fantastic broadcast and a great concert, but it also translates to the not-so-sexy but incredibly important work in northern and rural communities in this country.

[Heather Conway]

I want to make it very clear that it is not a burden to the CBC or Radio-Canada to be in local communities and to be providing local services, enhancing local services, and expanding our footprint where we can. The issue has been one of resources.

The challenge for all media companies, I think, is to manage this balance between continuing with the traditional television and radio infrastructure, which is expensive and has heavy infrastructure requirements, and meeting Canadians where they are, which is, in increasing numbers, around digital platforms.

What you're hearing, and what you have been hearing from people in the sector, is that we are challenged to pay for an entirely digital service and movement while continuing to invest in the traditional and legacy media infrastructure we have. It's not that we want—

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

To interject, Ms. Conway, the problem is what we've heard from a number of fledgling news providers, one of which called you an “uber-predator”.

What he meant is that there is a very small amount of online advertising that's available for these fledgling news sources. There's that, and then, coupled with your new foray into opinion.... Those aren't really things people are starving for nationally. We're getting a lot of opinion pieces, yet we have a finite number of dollars going to them.

If I could, I'll just bring up the BBC example, because it's important, and I only have a few moments. The BBC is pouring £8 million into paying for 150 new local journalists who will be used to feed content into local newspapers and local radio stations, because they understand that there is a democracy gap and that there aren't enough reporters in the field in this new online universe we live in who are covering property issues and covering water and sewer.

As we heard said by even the creator of The Wire on HBO, a former journalist himself, the next few years could be a politician's dream. I think what he meant by that was that they could be years where corrupt politicians on the ground could take advantage of less and less scrutiny on local issues.

The BBC, first of all, doesn't take any online advertising, but that's part of a much broader mandate. Second, it's using new money in order to get local presence to feed into its structure. I think that's at least a creative way of going about this. I'm wondering if there is anything you could say to that. Is the CBC planning on doing anything on that level that may be able to help us bridge that democracy gap at a local level?

[Heather Conway]

There are an enormous number of things that you've talked about in that statement. I'm going to try to tackle a few of them.

The BBC doesn't take online advertising because the BBC doesn't take advertising.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

I understand.

[Heather Conway]

The BBC is also funded at nine times our level. What the BBC can undertake versus what we can undertake, even with an injection, is very, very different.

The CBC has always been an opinion. I would argue that Cross Country Checkup is an opinion show. I would argue that all of our point-of-view documentary is opinion. We used to have a show called Commentary, on which people read opinion over the radio. Opinion is not new for the CBC.

I think it's important, again, for the CBC to be the place where people have important conversations, including community conversations and national conversations.

It's not something that we pursue. As Neil Macdonald noted in one of his analysis columns, when he writes about indigenous issues, his readership is guaranteed to drop, but he doesn't stop writing about it. He's not in the click business; he's in the public broadcasting business.

Our focus on issues that matter and on the role of the public broadcaster is deeply, deeply important to us. Where we can be in those communities, we will be. We're absolutely committed to it. We don't want to lessen our participation in any local news initiative. We're not trying to compete with the private sector. That's not our motive. Our motive is always how to best service Canadians where they are. What are they asking us to do? What do they want from us? It's the Canadian response to our content that drives our agenda.

[The Chair, Liberal, Hedy Fry]

Thank you, Ms. Conway.

Thank you very much.

I go to Mr. Maguire and Mr. Waugh, who are sharing their time again.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you, Madam Chair.

I want to follow up. I kind of ran out of time there last time.

Our study is about local news. It's about how we get news into rural and remote areas. I guess I'll ask the question that I did before, for a bit of a breakdown by province of the staffing and that sort of thing, just to get a handle on how that local news is produced and how you disseminate it out into those areas.

Can you expand on the means by which you would hope to do that with the new funding that's available there as well?

[Hubert T. Lacroix]

I thought that we had established for you, sir, that the way we deliver the news, the way the two media lines are looking for the information and the stories, the way that we make sure that these live on different platforms—these activities are not broken down per person, per platform. These numbers are not numbers that are available.

What we do, though, is that we look for, on a daily basis, ways for the network to benefit from what's happening in a particular region. I'll go back to Fort McMurray and the way that our Edmonton station covered Fort McMurray, being supported by Vancouver and Calgary and the whole of the network and not only allowing Canadians to understand what was going on in that particular part of northern Alberta but also helping the people of northern Alberta. We were the only ones with vital information for people in Fort McMurray.

This is the way that we actually deliver news. This is the way that we cover events of this kind. It's not about three people, two people, or nine people. It's about the strength of the public broadcaster and allowing all of its newspaper—its news people—you see how much we've been influenced by some of the questions—to deliver information to Canadians.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Right; you're taking from the newspaper, as I mentioned.

I'm going to give you some credit, because you could see where the industry was going, I think, long before some of the private people did.

However, I've seen $3.6 million spent in the last seven months by this government on Facebook when your revenues are down, drastically. Can you make any money off digital when you see the Facebooks, the Googles, and so on in the United States taking money from Canada? I see your revenues, and I don't see digital making the money.

[Hubert T. Lacroix]

I'm happy to see that you recognize that. Twenty years ago we were just about the first ones to go into digital. All the information was available to everybody around us, and we saw that. We also saw Canadians being interested in it, we saw where the audiences were going, and we started the conversations. We have been in this digital world for a very long time, so this is not new.

Are we making money off digital? If any person in this media industry knew or was able to monetize perfectly all of the efforts in trying to do this, aside from the Googles of the world and the media giants who are... Facebook, Google, and YouTube are all media companies. They are not simply technology companies. What we're trying to do is make sure we monetize this as we go forward.

Do we have the secret of the sauce right now? No, we don't.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

How do you compete against these American giants?

[Hubert T. Lacroix]

We don't compete against the American giants. We have a mandate to deliver to Canadians the best possible Canadian content and to make sure that the lights shine on Canadian artists in prime time. We are able, through all of our platforms, to tell you what's going on in the world through our journalists, who are stationed in really crazy places in the world and who are trying to give you a perspective of not only what's going on there, but how that affects Canada and Canadians in their daily lives.

Whether it's a conversation about climate change or whether it's a conversation about what's going on in different places of the country affected by the oil crisis, this is what we do. We don't wake up in the morning trying to compete against Google—

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

You do, because you're just—

[Hubert T. Lacroix]

—but we are interested in the quality of the Canadian content—and I think that's where Heather wants to go—that is created to face actually being invested in by the Netflixes of the world.

[Heather Conway]

Where I want to go is around the challenge that's presented by the global technology companies, and I would argue that in the form of Facebook and Google in particular, they are primarily technology companies and not media companies. These are both companies we partner with to distribute content.

The challenge that has occurred for the newspaper industry is that the search function—the search for my local shoemaker or repairer or whatever it might be—has virtually replaced all the classified advertising in newspapers. Their bread and butter was the classified ads. That was never the bread and butter of broadcasters, really. Newspapers have been hit particularly hard, I think, by the advent of these kinds of companies that are coming in. As you have rightly pointed out—and I say this as a good partner to them—they take from the market, but they do not contribute a lot to the Canadian market.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Do you pay fees to them? You say that you partner with Facebook and Google.

[Heather Conway]

We do pay fees to them. We have CBC Facebook pages, and we participate in Facebook Live. They are one of the largest distributors of content, and Canadians use them in the millions. When we want to share our content, Facebook is one of the ways that we do it.