Finance Committee on Nov. 1st, 2010

[Daniel Paillé, Bloc, Hochelaga, QC]

Thank you.

I would like to thank you for appearing before the committee. As a parliamentarian, I know this is generally not done, but I am going to do it anyway. I would like to apologize to the first two groups. Indeed, when 80% of the government members are absent, it gives the impression that we do not take our work seriously. I felt somewhat uncomfortable listening to the Canadian Council of Christian Charities and the Association des producteurs de films et de télévision du Québec giving evidence before so many empty Conservative seats.

At a press conference today, the Conférence internationale des arts de la scène, or CINARS, spoke out against the impact of the draconian cuts made to the funding of international tours in particular. The $4.5 million cuts made two years ago have had rather powerful residual effects on culture. These people were not just told to stop travelling. An entire industry has been destroyed. Furthermore, we see that, after a year or two, if Quebec artists are able to obtain international contracts, they are asked if they will have the means to get there. We never know if things are permanent or not. On the other hand, we are dealing with foreign competitors who come here and who undoubtedly have the support of their governments.

The appearance of representatives of the Association des producteurs de films et de télévision du Québec allows us to take stock of the situation.

You say in your document that stability is needed considering the diversity of competition and the fragility of the industry. It seems that you have no stability at present. You mentioned improving the Canada Media Fund and support for international co-production, as well as “...funding for research and development in the audiovisual industry, which now has to produce on all platforms...”.

I wonder if you could talk about this in greater detail, because I am having a hard time understanding what your expectations are.

[Brigitte Doucet]

The exact expectations have not been quantified. Our industry, that is, the audiovisual industry, has no programs specifically for research and development. At this time, producers need to test business models for all digital media. It is a question of testing various ways to work, because at present, producers cannot produce solely for television; the conception of a product must allow them not only to distribute it on other platforms, but also to ensure that they complement one another. Thus, there are parts within each platform, and in order to be successful... Actually, I do not believe that anyone already has all of the necessary expertise at this time. Some people have some of the expertise, and we are trying to get everyone to share them, but I think there have been many new developments. When I say research, I mean testing new business models and new ways of conceiving products. I do not know if that answers your question.

[Daniel Paillé, Bloc, Hochelaga, QC]

So you want money to be invested specifically for that, just as you would like $15 million for film and $5 million for—

[Brigitte Doucet]

In research and development, tax credit programs do exist for labour and there are some specifically for information technology. We believe it is the same kind of principle. These people need to do research and development to become more knowledgeable and perfect their fields. We would like to see our field integrated into an existing tax credit program, or a new program created to meet the needs of the audiovisual industry.

[Daniel Paillé, Bloc, Hochelaga, QC]

Regarding the funding of co-production, you say you would like $30 million “without further delay”. So there is some urgency to this. Why did you specify “without further delay”? You do not want to wait for the rest of it, either, but you seem to focus more on this.

[Claire Samson]

Because when it comes to co-production, the industry has already been waiting too long. Canada is losing very important, very beneficial international contacts. Indeed, our producers are no longer appreciated as partners with foreign producers, since our system is too bureaucratic and because of the lack of funding.

Let me give an example. The various member countries in the European Economic Community have reached co-production agreements that include excellent tax incentives, with which Canada simply cannot compete. Yet co-production is very important for Canadian producers, because it takes Canadian productions around the globe. Furthermore, from a purely economic standpoint, this brings new money into Canada, money that we would not bring in any other way. This represents a considerable financial and economic advantage and is extremely beneficial on a cultural level.

[Daniel Paillé, Bloc, Hochelaga, QC]

I have about a minute left. I would like to ask you a question about the Canada Media Fund. You want distributors—for instance, Vidéotron, Cogeco, Telus, Bell and Rogers—to become involved, and that is where you would like to get new funds.

[Claire Samson]

Vidéotron and Cogeco are already involved, for their cable television services.

[Daniel Paillé, Bloc, Hochelaga, QC]

Okay.

[Claire Samson]

They contribute from their cable TV revenues.

We have always asked ourselves this. Now, at the government's request, all content produced with the Canadian Television Fund must be distributed on all platforms. Of course, many of these cable providers are also Internet services providers—Vidéotron, Bell, and so on.

[Daniel Paillé, Bloc, Hochelaga, QC]

I was hoping you would clarify that.

[Claire Samson]

So why do they not contribute to the Canada Media Fund, to increase its revenues? After all, they benefit fully from the content they broadcast.

[Daniel Paillé, Bloc, Hochelaga, QC]

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Généreux, go ahead please.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

Ladies, I was present during your presentations and your comments. My first questions are for you.

Ms. Douma, what could possibly justify raising the federal tax credit from 29% to 42%? Why not set it at 32%, 35% or 38%? Why should it jump from 29% to 42%?

[Teresa Douma]

The increase to 42% is a substantive increase; there is no mathematical basis for it. There is a parallel with the provincial increase in Alberta. There was a substantive increase there, roughly the same amount, which had a significant increase in giving, statistically.

There's no other basis than just wanting a substantive increase to increase the amount of resources available for charities.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Can you estimate what such a possible tax credit increase, from 29% to 42%, would mean for the government, in terms of money, taking into account all the donations that have been made to all of your members in the last year? Can you calculate that?

[Teresa Douma]

I don't have the figures precisely for our own members. I understand it's been estimated by the Department of Finance that this would cost approximately $900 million.

If, as Cardus will propose, this was implemented only for donations over $450, the cost would be reduced to under $500 million.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Okay.

Would it be possible to provide us with those figures? Could you please ask your organization to forward them to us, through the proper channels?

[Teresa Douma]

Yes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Ms. Samson and Ms. Doucet, the world of television and information technology has evolved considerably and very rapidly over the past few years.

Just 10 years ago, we seemed to be a little behind, but I think we have caught up relatively quickly, especially in Quebec. Not to flatter my Bloc Québécois colleagues, but the Parti Québécois established some extremely ambitious measures in the early 2000s, particularly regarding tax credits for information technology. As a result, Quebec has become an extremely dynamic province in the area of research and development.

Of course, there is a lot of talk about videos, especially in the metropolitan areas of Montreal and Quebec City. Did that not affect you? I have been seeing more and more Canadian and Quebec content, in particular, and for some time now.

[Claire Samson]

I think Quebec productions continue to enjoy a lot of attention from Quebec audiences. Unfortunately, its success has never been equalled in the rest of Canada. That is still true.

Yes, the Quebec government has demonstrated a great deal of economic leadership over the years concerning cultural productions in Quebec, and this has proven fruitful, I must say.

Of course, Quebec's international market potential is limited. Few regions are interested in our productions. More and more, we seem to be selling program formats, but very rarely integrated contents.

Quebec is doing relatively well, for the time being, thanks to industrial strategies that are proving fruitful. That is why we are asking the federal government to show some leadership and to extend the tax credit to production costs related to other platforms that we also now have to use, in accordance with Canada Media Fund guidelines.

[Brigitte Doucet]

I would simply like to make one small clarification, if I may.

Yes, there is a tax credit in Quebec, but only in multimedia. It requires interactivity and multimedia producers who produce games and who produce something big like that. As for audiovisual, I assume you are perhaps referring to linear videos, that is, web series, which have become very common on the Internet.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In terms of content, in Quebec, I think that—

[Brigitte Doucet]

There are some.