Official Languages Committee on May 1st, 2014

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

Thank you for joining us today, Mr. Lacroix.

My question deals with CBC's mandate and today's media reality in which private networks are competing with CBC.

To what extent is CBC still able to make its mark in different niches? Have audience ratings gone up? If not, does CBC feel that it will be difficult to keep going in some niches and to seek more revenue? We know that CBC's revenues are mixed, they come from both the public sector and the private sector. It seems to me that the private sector revenues have started to drop. Why do we have that situation?

[Hubert T. Lacroix]

Your question contains a number of smaller ones. Let me start by telling you about our Canadian listening and viewing audience. In that area, we are doing quite well.

First, BBM has just announced the market shares from its winter surveys. Radio-Canada's are up everywhere. With the Sochi Olympics, we got almost 10 extra points.

I could give you a long list of our quality programs from Unité 9 and Les enfants de la télé to Les Parent and Mémoires vives. I could give you the numbers of people who watch them. That is the result that Radio-Canada has on television.

I could also tell you about the importance of our radio services in the regions. There is little or no advertising, except for Espace musique, and no revenue comes from our radio. I mention that because a part of your question dealt with revenues.

Let me talk about CBC now. CBC also has had significant and very successful flagship programs that have attracted Canadian viewers. The Olympic Games were a great way for us to combine our resources with those of other private broadcasters and to meet the objectives we told Canadians we had: a reasonable offer to win the rights, an intelligent financial model and a return on investment for Canadians.

In that kind of environment, according to the CRTC statistics that have just been published, there is no doubt that advertising revenue is down for all broadcasters. That is the case for us as it is for private broadcasters like CTV, Global and TVA.

We are moving towards digital and specialty channels. That is why, three or four years ago, all broadcasters, both public and private, came before various committees and the CRTC to make the case that a price had to be paid for the signal. I think that everyone is aware of the famous battle over the value of the signal. However, our arguments did not win the day.

All that long story is to get you to understand that, in this environment, advertising revenue is down and that, despite the quality of our offerings, our financial model is under pressure, as it is for all broadcasters.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

We know that CBC/Radio-Canada has lost the rights to broadcast hockey, which affected a lot of people. You have just told us that all media are having a hard time selling advertising. But private networks are able to pay an astronomical amount to get the rights to broadcast hockey. Is there not a contradiction in that?

[Hubert T. Lacroix]

No, there is no contradiction.

You have surely been following what Rogers is going to do. Rogers’ business model is simple; they are going to transform CityTV into a hockey platform; actually, they are going to take all their specialty channels and turn them into hockey channels. So the platforms that, at present, are Sportsnet 1, 2, 3 and 4, and the channel called The Score, are going to be the channels on which Canadians are now going to be able to watch hockey. This is a completely different business model. With the model also vertically integrated, Rogers will be able to sell you the whole thing for your smart phone or for whatever tablet you use. It is completely different from the situation and business model that CBC had.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

How will Radio-Canada set itself apart? It still receives relatively stable funding of about $1.1 billion from the federal government. That gives you good leverage in keeping a high level of quality. Whatever the situation, how are you going to offset the losses in private-sector revenue?

[Hubert T. Lacroix]

When you say losses in private-sector revenue, you probably want to talk about advertising revenue.

The choices that we have explained to you are set in a context of increasing revenue and cutting costs. We are working in an environment in which our base funding has not increased for many years. In fact, the amount has not been indexed to inflation.

In the seven years I have held this position, I have never said that we must have more money. We want multi-year, stable, predictable funding. Given that, we want enough money to fulfill our mandate and provide Canadians with services. That is what I have said repeatedly.

All of a sudden, the funding model, which is several years old, no longer works. A few years ago, CBC/Radio-Canada was able to compete regularly for the sporting events that Canadians are interested in and have them as part of our programming. We will no longer be able to do that because of the revenue, the platforms and the places from which Canadians watch those events. The environment has completely changed and we have to accept that fact. That is my message today.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Is the mandate too ambitious? Would you like to change it?

[Hubert T. Lacroix]

Clearly, that is the government’s decision. The government decides what it wants to do with its public broadcaster. We are doing what the Broadcasting Act requires, doing what we can with the means of funding currently available to us.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Lacroix.

[The Chair, Conservative, Michael Chong]

Ms. St-Denis, you have the floor.

[Lise St-Denis, Liberal, Saint-Maurice—Champlain, QC]

Mr. Lacroix, you have talked about your mandate to inform, enlighten and entertain, and also about the drop in your revenues. It is all true, we understand, we have all the documents. The fact remains that choices have to be made.

Here is my first question for you. Do you not feel that, given your commercial choices, which often mimic those of private enterprise and its flood of deathly boring entertainment at prime time—I am one of those looking for information—CBC is somewhat moving away from its original mandate?

Should you not be using other productions instead? For example, on French Radio-Canada, we never get to see programs produced in other provinces. This week, I heard a report on Radio-Canada about transportation problems in Toronto. I think that was the first time. I was happy because I told myself that it was not just Montreal that has problems; Toronto has even more. But that was the first I had heard of them.

Sometimes, programs in French are shown in other provinces around noon or 2:00 p.m. when no one is watching television. But never in prime time.

So perhaps our disagreement lies with the choices, especially for OLMCs, for minority groups. They are poorly served, by radio or otherwise. Are there other choices you could make?

Let me continue with my questions and then you can answer them together.

Choices are also made as the result of a vision. When Ron MacLean talked about French-speaking referees, Radio-Canada did not react. Does that not reveal a kind of vision that goes with some of the choices that Radio-Canada makes?

[Hubert T. Lacroix]

Ms. St-Denis, I'm going to ask Patricia to give you an idea of the contribution the regions have made to the network, particularly as regards information, and the way we increasingly reflect the regions in our information. In fact, we are aware of that aspect of our mandate.

However, with all due respect, I was stung by your comments on our programming. When you say that our variety programs are mortally boring, obviously, I cannot accept a comment like that. Our televisual performance has never been better. The figures I am providing apply to our sweeping dramas, our public affairs programs during peak hours—we are the only broadcaster to do that on a large and targeted scale—our information programs and our variety programs. When we consider all of that I think that the people who watch CBC-Radio-Canada will tell you very clearly that we discharge our mandate very well. If we judge by our ratings and the relevance we have in their eyes, it's spectacular. It has never been as high. Let's keep that in mind.

I will now go back to information and the importance we give to official language minority communities as well as our mandate to represent them. I'm going to ask Patricia to complete my reply.

[Patricia Pleszczynska, Executive Director, Regional Services and ICI Radio-Canada Première, Canadian Broadcasting Corporation]

Thank you, Hubert.

Indeed, it's about choices, as you mentioned. For some time now we have been hearing minority francophone communities tell us that they need to be represented in a more regular, more sustained way on our airwaves.

Over the past year we have put in place a three-point strategy.

The first point was a structural strategy that consisted in separating the Greater Montreal branch from the national branch. That may seem trivial, but in fact it is not. It really allows us to ensure that we align the priorities of programs for Montreal audiences, Montreal being up to a certain point a region like any other, even though it constitutes the biggest francophone region of the country, and the priorities of national programs whose mandate is indeed to reflect the whole of the country. That separation of the two branches had direct repercussions on the programs. For instance, this made it possible to create a radio program like L'heure du monde and give a new mandate to Culture club, a cultural program on the radio. Those are all things all of our regional stations can do to strengthen the links with their community.

The second point of our strategy was a new approach, a new positioning for our news and information. We have to reflect our country. I will give you an example. You say you heard some news from Toronto. In fact, we provide frequent news bulletins from all of the regions of the country. The number of regions we cover has increased over the past year, precisely because of the addition of two national reporters, one in Alberta and the other in Acadia. Their role is to contribute directly to the Téléjournal that is on at 10 o'clock. We have had on-the-ground RDI teams for several years now. The contribution from the regions to RDI is constant I would say, regular, and represents about 33% of our programming. Moreover, some citizens had told us that they had issues with the 10 o'clock Téléjournal. Thanks to the addition of those reporters we have been able to increase our representation of the regions.

At the last CRTC hearings some communities asked the CRTC if we could impose a certain quota on Radio-Canada for the Téléjournal. The CRTC deemed that this was not a good idea, editorially speaking, and we support that. In fact, we can't regulate the number of news items. Be that as it may, I would tell you that with the addition of those two journalists, our representation of the regions on the Téléjournal has now gone up to 14%.

The third point of our strategy is really our capacity to create, in compliance with that philosophy of reporting on the whole country, contact points among all of the citizens, to tell stories about the country, but from the perspective of a specific region. Let's take, for instance, the withdrawal of Canadian soldiers from Afghanistan. If that had happened two years ago, we would probably have been reporting from Valcartier since it is close, we go there regularly and there is a good team of journalists in Quebec who cover Valcartier on a regular basis. However, we chose to do a news report with Sylvain Bascaron, our new reporter in Alberta, from Edmonton. Our new philosophy allows us to tell viewers about the country and tell stories that concern all Canadians, but from different locations in the country.

[The Chair, Conservative, Michael Chong]

Thank you.

Ms. Bateman, you have the floor.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Thank you, Mr. Chair.

Monsieur Lacroix, I'd like to ask lots of questions.

You have a big operation, with 8,000 employees, and you have some new tools that are available to you, such as Facebook, Twitter.

I'm curious on how CBC goes about their utilization. Is it another layer? Do you need more people to manage that, or is it a tool that makes you more efficient and effective and you can use as almost market research?

[Hubert T. Lacroix]

They are completely embedded into the media lines, not another layer. We are asking our staff, nos artisans, our CBCers, to work with these tools because that's what allows us to do more.

As you saw from Sochi, one Canadian out of three didn't go to a television to watch the Olympic Games; they watched it on our app. It was downloaded 2.5 million times. That's the kind of stuff that we do.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

That leads me to my next question, actually. I was very gratified to hear your response to that one.

Young people no longer buy a television. I don't have a television where I live here. How do you reach them? How are you reaching those people?

[Hubert T. Lacroix]

We reach them by providing podcasts, by involving them in social media, by sending them to our catch-up TV sites, by Tou.tv, for example, where you don't have to actually be in front of your television set on Tuesday nights at 9:00 to watch Les enfants de la télé, you'll watch it directly on Tou.tv. That's the way we do this.

I think that when you look at what CBC Radio-Canada has done there, we kind of lead the show. People are very proud of what we do. We raise the bar for everybody else. As you saw from Strategy 2015, one of the three pillars is to be a leader in digital, and we are going to protect a certain amount of investment in our budgets to actually go there, because in the tendencies of the world, that's where we're going.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Okay. Given that you're talking about the budget, and that's of great interest to me, I see that Les Parent is on, I think, Netflix—

[Hubert T. Lacroix]

Absolutely.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

How do you get revenue? First of all, can you tell us how much of your original programming is on these non-traditional platforms and what kinds of revenue they bring in?

Once a chartered accountant, always wanting to find out—

[Hubert T. Lacroix]

I'm happy that you're into numbers because, you know what, I'm into numbers too, particularly in the environment we are in.

We have partnerships and commercial agreements with Netflix. For example, some of our programming that was not used and, frankly, that was living on shelves after its showing on our traditional networks, we packaged and sold to Netflix, and we continue envisaging other agreements of that kind.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Then there is a revenue stream that is non-traditional?

[Hubert T. Lacroix]

Absolutely. It's not important. It's not significant at all, but we are extremely aware—

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

But it's incremental to what the revenue source was?