Good afternoon, Mr. Chair and members of the committee.
Thank you for the opportunity to return today on this important piece of legislation that I am pleased to be able to address.
My name is Kevin Desjardins and 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 private radio and television operators in communities large and small and in both official languages.
For nearly a hundred 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 Canadian citizens.
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 or oversight. They have fragmented audiences, driven down revenues and driven up programming costs. In short, they have turned traditional broadcasting business models on their heads.
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, which was the seventh consecutive year of losses. That was before COVID-19.
Similarly, nearly as many Canadian viewers are watching Internet streaming services as are watching television through cable or satellite providers. In addition to decreasing audiences and subscriptions, these new over-the-top entrants have fundamentally changed consumer behaviour.
These structural challenges require structural solutions. Broadcasters are doing their part by investing in new content and technologies and following audiences onto new platforms. However, they remain hindered by unsustainable and inequitable regulatory obligations. This is why we welcome Bill C-10.
The Broadcasting Act is 30 years old and it still presumes a reality for the sector that has long since become a remnant of history. It assumes that there are limited ways for content to reach Canadians, as was the case 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 highly valuable. Broadcasters’ regulatory obligations, especially with respect to Canadian content, were proportionally high.
Today, because audiences have a multitude of content platform options, the value of traditional broadcasting licences is much less than it once was. Nevertheless, regulatory obligations have remained as onerous as ever and in some cases have become more burdensome. 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.
These trends have created an existential crisis. A study published last year estimated that television and radio broadcasters stood to lose more than $1 billion in revenues between 2020 and 2022.
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, providing cultural and economic value to the nation. However, they cannot continue to shoulder their significant obligations alone.
Bringing digital broadcasters into the regulatory system is a necessary first step, which Bill C-10 gets right. 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 new realities.
These changes are particularly vital for sustaining one of the most important public services that our domestic broadcasting industry continues to provide, which is local news.
Canadian private broadcasters remain especially proud to be the primary source of news and information in communities across the country. In an era of misinformation and global pandemics, it is critical that we identify ways to continue to support local news voices that reflect the realities of their communities and reflect a fair and accurate vision of Canada back to Canadians. We know that the digital giants will have little interest in delivering the evening news from Lethbridge, Saskatoon, Peterborough or Quebec City.
Ultimately, Bill C-10 needs to support local news and help us find ways to ensure that these critical Canadian stories are funded across the country in markets large and small.