Thank you, Mr. Chair and members of the committee, for the opportunity to appear before you today on this important piece of legislation.
My name is Kevin Desjardins. I'm the president of the Canadian Association of Broadcasters. The CAB is the national voice of Canada's private broadcasters, representing the vast majority of Canadian private radio and television operators from coast to coast to coast, in both official languages, in communities large and small.
For nearly 100 years, Canadian private broadcasters have been a part of the cultural and economic fabric of the nation. They have provided a platform for Canadian stories, invested in Canadian talent, employed Canadian workers, reflected Canadian diversity, paid Canadian taxes, entertained Canadian audiences and informed the Canadian citizenry. They remain especially proud to be the primary source of news and information in communities across the country.
The legislation we are here to study comes at a critical moment for our sector. Over the past decade, the competitive landscape for Canada's broadcasters has fundamentally changed. Unregulated digital competitors have moved into the Canadian market without hindrance and without oversight. They have fragmented audiences, driven down revenues and driven up programming costs. In short, they have turned traditional broadcasting business models on their head.
Canadian broadcasters are now threatened on both ends of their value chain. The advertising marketplace has changed radically, with online platforms now consuming half of those advertising dollars. In fact, private conventional TV stations posted a negative margin of 7% in 2018-19, the seventh consecutive year of losses, and that was before COVID-19. Similarly, nearly as many Canadian viewers are watching Internet streaming services as watch television through cable and satellite providers. In addition to decreasing audiences and subscriptions, these new over-the-top entrants have fundamentally changed consumer behaviour.
These structural changes require structural solutions. Broadcasters are doing their part, investing in new content and new technologies, following audiences onto new platforms, but they remain hindered by unsustainable and inequitable regulatory obligations. This is why the sector welcomed the introduction of Bill C-10.
The Broadcasting Act is 30 years old, and it shows. The act presumes there are limited ways for content to reach Canadian audiences. This presumption arose at a time when Canadians could only watch or listen to programs over the public airwaves. Because licences to operate broadcasting channels over those airwaves were scarce, they were valuable. Broadcasters' regulatory obligations, especially with respect to Canadian content, were proportionally high.
Today, because audiences have a multitude of content platform options, traditional broadcasting licences are no longer worth what they once were. Nevertheless, regulatory obligations have remained as onerous as ever, and in some cases have become heavier. This has left Canadian broadcasters as some of the most heavily regulated businesses in Canada, attempting to compete in one of the most profoundly disrupted industries in the world.
Together, these trends have created an existential crisis. A study published by Communic@tions Management Inc. last summer estimates that local TV and radio broadcasters stood to lose more than $1 billion in revenues between 2020 and 2022. This situation is simply untenable.
Canada's private broadcasters are not interested in turning back the clock. They are optimistic about the future, they want to continue evolving with Canadians and they remain committed to providing cultural and economic value to the nation. However, they can no longer shoulder the same significant obligations they always have, and they can no longer do it alone. This is why the changes that Bill C-10 will enact are so critical and why we need to move forward expeditiously.
Bringing digital broadcasters into the regulatory system is a necessary first step, which Bill C-10 gets right, but it is not enough to simply apply a parallel regime to extract additional dollars from digital giants. We need to rebalance obligations and create a modern, agile and sustainable regulatory framework that will allow Canadian broadcasters to adapt to the marketplace for decades to come.
These changes are particularly vital for sustaining one of the most important services that our domestic broadcasting industry continues to provide: local news. In an era of misinformation and global pandemics, it is critical that we identify the ways to continue to support local news voices that reflect the reality of the communities in which they live and reflect a fair and accurate vision of Canada back to Canadians.
We must start by empowering local news providers to do what they do best. We know, certainly, that digital giants will have little interest in delivering the evening news in Lethbridge, Saskatoon, Peterborough or Quebec City.
We know that the bill as presented is not perfect. I know that in the coming meetings you will hear from other broadcasters with varying footprints in the Canadian industry, and they will express a range of views. However, I'd like to leave the committee with two key principles on which private broadcasters agree.