Canadian Heritage Committee on Feb. 25th, 2016

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

It has never been updated.

[Monica Auer]

Paragraph 3(1)(s) tells the CRTC that they should require private networks and individual undertakings to put money into Canadian content with the resources that are available to them. The CRTC is interpreting this in a way that is actually fairly narrow. For instance, we know we have media convergence. Dwayne and Monsieur Demers have explained that very well.

What happens now in the 21st century is this. If a huge telephone company wants to sell smart phones and now has all this content that it can get from its TV companies, do we know that the TV companies are properly being compensated for all that content that's drawing in all those valuables? If there wasn't any content in all of these pipes, how many people are going to buy those empty pipes?

Al, I don't know if you wanted to add something.

[Al MacKay]

No, I'm good.

[Prof. Dwayne Winseck]

I'll start by saying I'm very, very sceptical of subsidies. The idea, to my mind, of putting any kind of a tax on Internet service providers or the pipes' owners to fund content is a non-starter, and should be a non-starter. It should be stillborn.

Part of the problem with the Canadian system is the idea that we think about it as a system, as opposed to a set of, let's say, Lego building blocks that we snap together in a variety of pieces to create things that reflect our desires and our wants. By thinking about things in terms of a system, we've created a dark, opaque labyrinth of slush funds that go from one pocket to another with regulatory blessing. I don't think this helps us out at all.

The subsidies that we do have are actually quite generous, over and above what we give to the CBC each year, which I believe should be strongly funded. I believe it's correct to restore the funding that it has lost. I believe the CBC has a core mission to play. However, over and above the CBC funding, I calculated in a rather rough and ready way, for a presentation a month or two ago, the subsidies that we give to the Canada Media Fund, the Canada Periodical Fund, and the music and sound recording industries, and it's about $800 million.

In my view, we ought to remove each one of those little pockets of money—and let me be a little bit hyperbolic here—that have their cesspool of industry insiders and supplicants lining up at the trough and consolidate the funds into something that we call a general media and cultural fund. We take it out of the hands of the broadcasters. We take it out of the hands of the BDUs, the cable companies. They play no role in funding it, they play no role in administering it, and they play no role in taking any of the funds out of it.

As Monica pointed out, a significant slice of the funds for the local program improvement funds went right back to the large conglomerates who, in my view, have been putting these broadcasting entities in a very precarious spot because of foolish consolidation decisions and a field of dreams vision that they started at the end of the 1990s with convergence and the dot-com era. We need to stop that, and we by no means should be giving them any subsidies whatsoever.

I think we should keep the subsidies that we have because we have to recognize—and we do recognize this through the entire institution of intellectual property law—that information and news are a public good. The general public has never, ever paid the full freight for news anywhere in the world, in the past or today. The only people who have paid the full freight for the news have been financial traders and rich merchants who want to trade on advantages in time, secrecy, and exclusivity. For everybody else—for the general population, and as a way of bootstrapping people into the role of citizens in a democracy—we have had a range of subsidies.

There are three sources of subsidies. There are advertising subsidies. We are seeing that those are in difficulty right now. There are government subsidies, and we have a significant number of them in Canada. I believe that is a good thing, but we ought to consolidate them. Lastly, we have rich patrons; that could be fine too, but we need to do something with consolidation.

I have one last point. We also have to recognize—and maybe later we can get into it—that there is some good stuff going on too in terms of some of the new journalism that is emerging.

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

I am sorry, Mr. Demers, but I've run out of time for my questions to you.

[The Vice-Chair, Conservative, Larry Maguire]

We will go to Mr. Nantel.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you, Mr. Chair.

Good morning, Mr. Demers. I want to thank everyone.

I was shocked by your testimony earlier. All that information is really like a multi-grain loaf of bread, a giant pumpernickel we will have to digest. When we leave here, we will have a lot of information to go over based on what you have talked about. You have painted a fairly accurate picture of the situation. Clearly, this indicates that we will need data to pinpoint where the crises are, where the leaks are and what kind of support we can provide.

Mr. Demers, your study is very broad. What you have been working on for several years brings me to draw a parallel. Tell me if it is wrong.

I am 52 years old, and when I was younger, I read the newspaper. The only media we had access to were live television and the paper. Today, competition is huge and comes from all over. Local media are facing global competition, whether we are talking about a starlet's nonsense on TMZ, a documentary on fish or the Great Barrier Reef in Australia. All that causes us to show less interest in what is happening in the neighbourhood next to ours, such as the fact that a fire hydrant was installed in the middle of the sidewalk.

Is it fair to say that these are the phenomena with with our local media must contend? They are no longer the only source of information and, as you often say, of entertainment.

[Prof. François Demers]

What you are saying seems fairly accurate to me, but I would add that local media are facing an additional challenge. Aside from traditional media, there are new media. I am talking about young up-and-comers who are trying to find their place in the field. On a neighbourhood level—for example, in the Quebec City region—some of them are creating networks to try to support each other. But here is the challenge: the gateway to news, regardless of its nature, tends to be less and less about the brand, and more and more about a news item in particular. In other words, people no longer read Le Soleil and its contents, but rather a specific news item in Le Soleil.

In Gaspésie, a magazine became the website Graffici. I worked there, as well as at Reader's Digest. Those experiences tell me that people are increasingly aware of new developments, but they access the news in a fragmented, piecemeal way. For instance, three or four years ago, about a third of people accessed the newspaper Le Soleil from Quebec City through its website; another third accessed it through search engines—so by looking for specific topics; and the remaining third accessed it through social networks because they were told about an interesting topic and provided with a link to access the article. The percentage of people accessing that content through search engines and social media is constantly growing.

In Gaspésie, the percentage of people who are going through social media and are interested only in a specific topic flagged by someone else was 65% from the outset. The media responsible for the news was not important to them. Nowadays, loyalty is focused mainly on our smart phones, instead of on specific media. Television is dealing with the same problem. Programming is no longer being consumed as a whole, but rather piecemeal.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

You said earlier that Radio-Canada seemed to be reducing its presence in Quebec City for all sorts of reasons. Mr. Winseck also talked about Radio-Canada's place.

I would like to turn to you, Mr. Winseck.

You talked about our regulatory approach and the fact that, up until now, our policy consisted in regulating how the material was delivered. Yet Mr. Demers just told us today that people are no longer interested in the delivery truck, be it red or blue. They already know what they want and are not at all concerned about which truck the content comes from.

Is that indeed what you said?

[Prof. Dwayne Winseck]

I would agree with Mr. Demers on that point for sure. Whether the thing comes in a delivery van, by Uber, or by whatever means, people really don't care. They are quite willing to connect their laptop to a Wi-Fi connection as they lie in bed at night or to flip through their cellphone or to get up and watch the screen in another room. The screen and the device are really just a substrate that delivers whatever content they want.

At the same time, though, we have to get away from the idea that the pipes are just empty pipes. The idea that somehow we have to fill up the pipes and that the pipes gain value from the content we might somehow give to them is exactly the folly that got the companies into trouble to begin with.

I can remember Bronfman, when he was head of EMI, saying that without us, the kings of the music industry, filling up the pipes, people will just have gray screens. No, no, no. People will talk on their phone in the most intimate detail and fill the pipes with the intimate details of their lives. They'll get content from everywhere they want. This is what Mr. Demers is saying.

One problem is that sometimes the use of the content is uncritical, and you ask how you judge whether that source or another source is credible. I see this when my students want to peddle stuff to me all the time, in papers that they got from some generic search, and this just isn't on, for a university-level paper.

There are different sets of problems, but I don't think those are the ones we're dealing with here.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thanks.

[The Vice-Chair, Conservative, Larry Maguire]

Thank you very much.

We will move to Ms. Dabrusin.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

My question is for Mr. Winseck.

I wanted to pick up on a comment you made about good things emerging.

I was reading an article by Philip Smith yesterday online. He was mentioning that we need to redirect the conversation from how to save Canada's media towards questions about how to radically reinvent the media ecosystem to put Canada back on the global stage as having an exportable model and a product desirable beyond Canada's borders.

I thought that was an interesting idea. You just mentioned something about wanting to talk about the good stuff emerging. I thought maybe you could talk a bit about that.

[Prof. Dwayne Winseck]

When I say that we should have a kind of general media and cultural content support fund, I see using it to take advantage of what some people call Hollywood North, the idea that we have a lot of skilled labour in this country from the film and television business who have been producing for Hollywood and the TV networks in the U.S. One of the first Internet-to-TV programs was actually built out of Vancouver by people who had been working on Hollywood productions. I see video games. News bureaus were cut from nine to two by the likes of CanWest in a spate of three years at the beginning of the 2000s; I see them being reinstated. I see a lot of these kinds of things.

When we look around at the kinds of things that are emerging, there are many green shoots that are very good on the horizon. These are not just fly-by-night operations being put together by people with low skills or by hacks; these are done by former journalists who have been fired or laid off.

Look at the roster of iPolitics. It has a roster of some of the best journalists in this country. Some of them happen to be my colleagues. Look at Blacklock's Reporter, look at Canadaland. Look at Policy Options, with Jennifer Ditchburn. She's a major parliamentary reporter, very good at what she does and also very knowledgeable, who did her MJ with us at Carleton, and now she's the editor at Policy Options.

We also have the emergence of topical experts across a range of issues. Craig Forcese at University of Ottawa, on the national security file, is one of the tops, bar none. There is Michael Geist, in the digital media copyright area, and my colleague at Carleton, Josh Greenberg, on public health and the environment.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I appreciate the list of the green shoots, but what I'd like to know is how we can help grow the green shoots. What should we be looking to to help to promote all of that?

[Prof. Dwayne Winseck]

There are three things.

One is the general content fund, the amalgamation of all the disparate funds into one general content fund. Get it out of the hands of the existing industry. Raise the money for it through general taxation, as opposed to siphoning funds from one pocket to another. Perhaps to cut some of the fat out of there, reduce the existing amount by a little bit. Call it a general fund and have it administered by independent entities. That's one.

Two, encourage the regulators that already are dealing with media concentration in a significant way, such as the CRTC in the last year, to continue to steel their spines. Through lobbying and political pressure, they are under extreme pressure for, in my view, taking the right course. They came down with four major decisions in the last year, and that is a very strong push-back against media concentration.

Let's talk TV, mobile TV, the wholesale mobile wireless framework, and the wholesale access to fibre to the home. These are absolutely great, because they lead to my third point, which is open pipes. We need to have open pipes that people can access without the vertically integrated media companies operating like editors, as opposed to just carriers.

Those are the three: subsidies, regulators with a spine, and structural separation so that we have open pipes.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

That's wonderful. Thank you.

I've read some things that you have put out there about how we talk about media concentration and how it actually reflects political philosophy or our views about democracy. I know that—

How much time do we have?

[The Vice-Chair, Conservative, Larry Maguire]

You have two and a half minutes.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

All right.

We'll at least start this. I was wondering if you could outline, first of all, what you saw as the four ideologies or four perspectives. Then maybe we can continue with what that reflects about our political philosophies.

[Prof. Dwayne Winseck]

Sure.

The four that I lay out are, first, those who think that the sky is falling continuously, the Cassandras, who say that media concentration is bad, it's going from bad to worse, and democracy is on edge basically forever. That has been going on since I started studying, so that's 35 years.

There are the Cassandras, and then there are the others, the ostriches, the ones who think things are better than ever. It's all sunny skies, and how could we ever have anything better than what we have today? We live in an environment of information abundance, they say, and people who are thinking about media concentration in the age of Internet are a bunch of dinosaurs.

We have the Cassandras and the ostriches, and then we have the number-grinders, those who try to bury their heads in a mountain of data to try to establish a straight-line connection between who owns the media and a reflection of political ideology or bias in the output. You can't do that. You can't have single causal relationships in a complex institutional environment like this. That's a fool's errand. The best research in this country by Colette Brin, Soderlund, and Hildebrandt comes to the same conclusion that other good researchers around the world have reached, which is that the evidence is mixed and inconclusive when you try to look at this kind of thing.

Then there's a fourth perspective, which tries to cobble together the good things from other places, and it's my perspective, I suppose. I draw on some others that I've learned from over the years. This perspective is that societies from time immemorial have oscillated between openings in communication and closures in communication, and it's hubristic to think of our times as somehow exceptional and that the forces of consolidation, concentration, and control have somehow vanished from the scene as if they're an extinct species. I don't believe that's the case. I believe that we need to take very strong preventive measures to ensure we have all the conditions possible that are most likely to lead to the most democratic media system possible.

That means adopting strong structural measures, including preventing media concentration, making sure the pipes are open and act as carriers rather than editors, and making sure we have adequate resources. That is most likely to produce a media environment that is conducive to a democratic system. We should minimize, therefore, any kind of content regulation or behavioural regulation.

[The Vice-Chair, Conservative, Larry Maguire]

Thank you, Professor Winseck.

I'll move to Mr. Barlow to begin the five-minute round.

[John Barlow, Conservative, Foothills, AB]

Thank you, Mr. Chair.

I appreciate being able to sub in today for Mr. Van Loan. I spent 20 years in the community newspaper industry, and I am very interested in being a part of this discussion.

I want to change tactics a little and speak to Mr. Demers, but before I do, Mr. Winseck, I was really happy to hear you say that don't support additional subsidies in this industry. Everybody I've spoken with in the newspaper industry agrees with that. However, you did say that you agree with additional funding for CBC. That is a subsidy.

[Voices]

Oh, oh!

[John Barlow, Conservative, Foothills, AB]

They're given a $1.5-billion subsidy annually. I think it's important for them to come to a realistic cost structure for that industry to move forward. We're asking them to be a little more self-sufficient. At CKUA radio and places like that, they have to raise funds on their own if they want to do those things. I just wanted to clarify that.

Mr. Demers, you were talking about community newspapers. I know that you're specifically in Quebec, but in my experience, here's one of the biggest issues that community newspapers have been facing. They've been relatively successful because of their hyper-local mentality, right? If you're in a small community, the only place you're going to get that news is in the community newspaper. However, have you done any research on the cost of Canada Post? Has anybody else? Has Mr. MacKay or Monica?

For example, more than half the budget of the average community newspaper is for the delivery of the newspaper through Canada Post. Costs have continued to go up. Canada Post no longer allows community newspapers to be delivered as second-class mail. If they're addressed, they have to be first-class mail. If they could reduce their costs for Canada Post, if newspapers could be addressed but be considered second-class mail, that would save them hundreds of thousands of dollars a year. I'm wondering if you've done any work on that.

[Prof. François Demers]

A few years ago, we studied the federal government's indirect support for newspaper delivery. That aspect matters, but with all due respect, I believe that newspapers are no longer a factor. That would be a tiny measure, considering all their challenges.

I will give you a somewhat broader answer. It seems to us—or it seems to me—that the system for state financial and regulatory support for the Canadian production of cultural products, especially in the media over the course of a century, has slowly developed through a whole series of measures in the perspective of stimulating the production, the distribution and the branding abroad.

However, the major challenge the media are currently dealing with is not related to that. It's more a matter of ensuring that what we can refer to as Canadian cultural products are advertised to Canadians. They must be easier to access and more attractive than other products. That is what government support and innovation should focus on. The government should help rejuvenate, refresh and clean up everything else already in place. Some funds should perhaps be recovered in order to raise Canadians' awareness of the fact that Canadian products are offered to them—even when they are offered by other countries—and ensure that those products are well positioned and attractive.