Canadian Heritage Committee on Feb. 16th, 2022

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

Thank you, Chair.

First off, about my motion a few months ago, I am very disappointed that Rogers is not in front of us. It was 11 months ago that Rogers committed $26 billion to buy the Shaw empire. They spent five days at CRTC hearings in November. I asked for Shaw and Rogers to come to committee. They're not here.

Twenty minutes ago, we just received notice that Bell wants to come to our committee to talk about this massive sale worth $26 billion in this country.

Alex Freedman, you stole my line, because we're very concerned in western Canada about Global Television. Stations like those in Lethbridge, Kelowna, Saskatoon and Regina, plus in Ontario in Kingston and Peterborough, and in the Maritimes, Saint John and Halifax, could be gone overnight, with their newsrooms, if this sale is approved by the CRTC. We also need the CRTC to come to this committee before they approve or disapprove the sale of Rogers and Shaw.

I'm going to start with you first, Ms. Edwards.

You made a number of allegations, and you were totally correct. The news media, the cable giants, have decimated community television. We used to have a pretty good community television station in Saskatoon. It's gone dark, like you mentioned has happened in Vancouver and other places. There's nothing to fill this gap. I am concerned that communities in this country will not get the local news that we have enjoyed over the last 10 or 15 years.

I want to get your further comment on the situation with this takeover.

[Catherine Edwards]

It's an observation that community media is ten times as cost effective as private or public sector media, and it's really the only cost-effective model for smaller communities.

It's disappointing that Rogers and Shaw, the two companies at the focus of this, have been the reason that we've lost most of those smaller stations. They're certainly not serving them with their private stations. In fact, we're in a crazy situation now where, for example, Rogers extracts money from its cable subscribers in New Brunswick to support Citytv in Toronto. None of that money is flowing back into the communities from which it's extracted.

When an independent local news fund was created in 2017 from what was formerly recognized as community TV money, it was called “local expression spending”. They gave cable companies carte blanche the ability to move the money to their private properties, to move it around among their community stations and to shut stations in big cities.

Unfortunately, we're seeing the results of that, and our experience is that the CRTC.... These companies are just too big. The bigger they get, the more difficult it is to get them to observe policies, even when they're put on paper. We complain and point out that they're not being followed, and nothing happens year after year.

We just don't see how further consolidation is going to address local news or the problems the regulator has getting them to follow the policies that are already in place.

Thanks for the question.

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

Thank you.

We have a bill in front of us. In fact, it will be introduced in the House this afternoon, Bill C-11, which will have major ramifications across this country.

Alex Freedman for Community Radio Fund, I notice you worked for CBC for 15 years. Good for you, because CBC is killing local radio stations in this country. They're down in revenue by nearly 40% to 45% coast to coast, yet CBC was just handed $150 million more by this government.

How can local radio stations compete with the public broadcaster? They're getting killed, not only in the last two years, but certainly over the last five to six years.

[Alex Freedman]

Thank you for the question, Mr. Waugh.

Through you, Chair, I would simply state that I couldn't agree with you more.

I did work for the CBC, and I am a fan of the CBC, but CBC has roundly abandoned local communities, moving to a model of regional distribution. CBC does remarkable work in and of itself, but they do not represent local communities.

Our stations, both television and radio, from a community standpoint, are based in communities, are not for profit, and when our DJs and news producers walk out the door of a station, they run into their listeners in the supermarket. It is a local connection that you cannot replace by parachuting a journalist from Winnipeg into Brandon, Dauphin or The Pas, or taking a journalist from Regina and moving them into Prince Albert. You're just not going to get the kind of coverage you would if you had local journalists in place in those areas.

That's why my position is simply that concentration does not support local journalism and that if, in fact, this deal is allowed to go forward, this committee very much needs to find ways to support local journalism. As Cathy said, community broadcasters really are the foundations. We've been there, and we will continue to be there to support these communities. How well we can do that depends on your support.

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

Mr.—

[The Chair, Liberal, Hedy Fry]

You have 36 seconds left, Kevin.

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

Thank you.

Mr. Péladeau, you're expanding in western Canada, but this deal between Rogers and Shaw also includes Freedom, which is 6% for Shaw right now.

What will that do to your Quebecor or as you try to come to Manitoba, B.C., and Alberta?

[Pierre Karl Péladeau]

Basically, what we're saying here is that we've been seeing the kind of oligopoly policies that have been established for the last decades in Canada. We've been able to prove, with a fourth operator in Quebec, that Quebeckers can enjoy much better prices and something that is quite important today in the digital world, namely innovation. We would like to introduce competition, and the CRTC did the right thing with the MVNO policy this past July. What is important now is to make sure that this MVNO policy will be made and will be available as soon as possible.

Also, one thing of great importance with regard to competition in the entire industry would be to make sure that the fourth operator, which is available right now in British Columbia, in Alberta, and in Ontario, which is called, as you said, “Freedom”, will not be part of the transaction...but be available for disposal to make sure that competition will remain in Canada in this very strategic market, the wireless industry.

[The Chair, Liberal, Hedy Fry]

Thank you, Mr. Péladeau.

I now go to Tim Louis for the Liberals.

You have six minutes, Tim.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Chair.

I want to thank all the witnesses for being here for this important conversation.

I would like to start with Ms. Edwards, from the Canadian Association of Community Television Users and Stations.

Ms. Edwards, in your opening statements you ran out of time. You had just touched on your ideas for a community access media fund. I just wanted to give you the opportunity to have you share that idea with us.

[Catherine Edwards]

That's really kind of you. We were only invited last night, so we didn't have much time to prepare our comments.

When the Rogers-Shaw proceeding was before the CRTC and open for public comment, we did participate and we simultaneously filed an application for a certified independent production fund, a CRTC-certified fund called the “community access media fund”. The idea, as with NewWest.tv, which Mr. Julian volunteers with, is for small not-for-profits get access to funding. They have been trying to step in and fill the gaps left by the retreat of cable community channels, but it's really difficult to do because we have no access to the ILNF, for example, which was ironically created out of former community TV funding. Not-for-profit community TV stations have never had access to any of the funding that [Inaudible—Editor] except in Quebec. That's what that fund is for.

We suggested that because Shaw in particular has been violation of CRTC policy with respect to community TV stations—not meeting their access in local requirements over the years—that rather than Rogers just taking over those stations and continuing to have them underperform, if instead, money from former Shaw areas, at the least, and perhaps also Rogers areas, were put instead into the community access media fund, we could start to resource not-for-profits to bring back service in areas of the country that cable companies have pulled out of. Like Alex and I both said, we do it for a tenth of the cost of the public and private sector and it's really the only cost-effective option.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Mr. Freedman, from the Community Radio Fund of Canada, my next question is for you.

In my region, we're very fortunate to have community radio. We've got CKWR, CJIQ, and CICW, a station that I volunteered and hosted a show at, so I know its importance. We also are fortunate enough to have CBC locally in Kitchener-Waterloo, and then also some private stations. I know we've had discussions in the past recognizing that community radio is the third pillar of the broadcasting system and can work in conjunction with public and private colleagues.

Can you just explain the importance of having all three?

[Alex Freedman]

Community media are important because they fill a gap in the following. There are things that the CBC does that are exceptional. Our stations couldn't cover the Olympics in the same way they do. There are things that commercial radio does that are very good. They promote very popular music, and they have a for-profit model. Community radio fills that gap, the gap that represents local communities, communities outside of the major urban centres, and there are millions of Canadians who do not live in major urban centres and who do require local news and information.

Let me give you an example. People on Cortes Island, during the middle of the pandemic, were not getting the news they needed; they were getting the news from Vancouver. They needed to know what was happening on Cortes Island, what that local community was doing, what volunteers were needed, what was happening at the local health centre and what local municipal officials were doing. That was the sort of coverage that community radio was able to provide.

I do want to be clear on this. I'm not speaking only about community radio in this context; I'm speaking about community broadcasters writ large, and that includes television stations. These are broadcasters that have boards of directors and staff based in those communities, and they are supported by a network of more 10,000 volunteers, all of whom come from those communities.

Without that on-the-ground knowledge, you just can't get quality coverage, and without quality coverage, the average Canadian is going to turn to Facebook and Google for their news, and we know what happens then.

This system is built on a pillar of three major aspects: community, commercial and public, and unfortunately community has been woefully underserved and, as we see, we're continuing to have a conversation about multi-billion dollar deals in the commercial sector, and we need to make sure that, as that conversation happens, there is recognition for community media.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

That was well said, thank you.

[The Chair, Liberal, Hedy Fry]

You have one minute left, Tim.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you very much, Chair.

Yes, you just explained the importance of local news and local messaging.

Maybe in that final minute, I could ask Mr. Saras from the Ethnic Press to give one-minute example of how the Ethnic Press is more trusted and possibly got messaging out in the pandemic that was more effective in specific languages. You mentioned 103 languages.

Thank you.

[Thomas Saras]

We are a society of new immigrants. These people come here, and don't know much of our culture. They try to integrate into the culture, but they turn to their own press because they better understand it for various reasons, and they trust it more.

The problem is that Rogers, two or three years ago, fired about 280 members of the ethnic press who were working at the channels OMNI.1 and OMNI.2. They turned them into commercial channels, then applied a year ago to CRTC, and they received another licence to get a channel for ethnic communities.

This is how these people think and what exactly they do. They think first about profit and only profit, and much less about if they are going to serve the Canadian public and which part of the Canadian public.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, that's my time.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

That's it. I'm sorry, Tim.

We're going to have to go the next person on my list of questioners, who I think is Mr. Champoux of the Bloc Québécois for six minutes.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

Thank you to the witnesses for making the time to meet with the committee today and share their views. Their input is always relevant and informative.

Mr. Péladeau, you talked about the importance of a fourth competitor. You gave the example of what happened in the 2000s. Quebec is a compelling example.

Tell us, if you would, about Globalive's experience in 2008. If memory serves me correctly, it didn't go very well. You talked about it, in fact, when you appeared before the Standing Committee on Industry, Science and Technology in recent months.

Can you compare your experience with Globalive's?

[Pierre Karl Péladeau]

Thank you, Mr. Champoux, for giving me a chance to discuss that.

The first auction that the Department of Industry held further to the new competition policy paved the way for new entrants, defined as new operators, which were able to take advantage of set-asides. The policy was very successful in Quebec, where a fourth competitor emerged. The Atlantic provinces saw something similar with Bragg Communications Inc., which is still operating today.

Unfortunately, that wasn't the case in the rest of Canada, from Ontario to British Columbia. Here's why: the companies that took part in the auctions outside Quebec were largely foreign-owned. Their main focus was money. Battles over ownership ensued, culminating in Shaw's purchase of Wind Mobile, which became Freedom Mobile.

When Shaw first took over Freedom, it opened up a much more competitive environment. People in Alberta, Ontario and British Columbia benefited from more competitive and innovative offerings.

All of that came to an end, unfortunately, with the Shaw–Rogers deal, which will close the door to other operators. There won't be a fourth competitor. Quite the opposite, it will be mergers and acquisitions all around. For years and years, we've seen how this oligopoly works. Prices are lower in Quebec and in the Atlantic provinces, but they're higher everywhere else in Canada. That same thing will happen again.

We are talking about an industry that is crucial to Canadians and to the wireless sector. Given where the economy has taken us, there is no way we can compete globally without a competitive wireless industry.

That is the issue here. That is the issue we are raising with the CRTC, the Department of Industry and Competition Bureau Canada.

[Martin Champoux, Bloc, Drummond, QC]

I won't have many turns, so I'm going to take this opportunity, Mr. Péladeau, to ask you what you think of Bill C‑11. The bill is currently being debated in the House of Commons.

Broadcasters and telecommunications companies are much more vocal this year than they were last year, at least as far as my contact with them goes. I'm curious as to how you feel about it. I don't think the legislation will shy away from regulating the web players or making them contribute. You raised a very compelling point, and you made a good case for a more deregulated environment, which you could and should benefit from. You feel the government should ease the burden on traditional broadcasters.

Give me a few examples of ways the government could lighten your load, to help you become more competitive in this new market.

[Pierre Karl Péladeau]

It's a long list.

[Martin Champoux, Bloc, Drummond, QC]

I'd appreciate it if you could keep your answer to a minute and a half. That's quite the challenge.

[Pierre Karl Péladeau]

Unfortunately, it's a pretty dull list as well, involving decades upon decades of regulations.

This isn't a Canadian phenomenon; it's a North American—perhaps even global—phenomenon. Cable television, so the distribution of signals over cable, is a sector in decline. The Internet is now king. The Internet is the embodiment of deregulation; you don't need a licence to broadcast over the Internet. Big foreign companies, the Netflixes, Disneys and Amazons of the world, understand that and have invaded the space. To this day, cable companies are the only ones contributing financially to the Canada media fund, which supports local production, funding a large part of it.

As people cut the cord and unsubscribe from cable TV—a major phenomenon—the fund's financial resources will dwindle. That will undermine the entire Canadian production ecosystem and, as a result, the entire news sector. Without a strong, reliable and well-funded news sector, democracy is at risk, in my view.