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37th PARLIAMENT, 2nd SESSION

Standing Committee on Canadian Heritage

EVIDENCE

CONTENTS

Tuesday, December 10, 2002

0910

The Chair (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.))

Mrs. Megan Williams (National Director, Canadian Conference of the Arts)

0915

0920

The Chair

Ms. Chantal Larouche (President, Fédération nationale des communications)

0925

0930

0935

0940

The Chair

Mr. Michel Morin (President of the Board and Information Director, TéléCentre Drummondville)

0945

The Chair

Mr. Dean Butler (Director, Media Services; and President, Vancouver Media Directors Council, Glennie Stamnes Strategy)

0950

0955

The Chair

Mr. Paul Boin (Assistant Professor, Communication Studies, As Individual)

1000

1005

1010

The Chair

Mr. Gaëtan Tremblay (Professor, Communications, As Individual)

The Chair

M. Gaëtan Tremblay

1015

1020

The Chair

Mr. Jim Abbott (Kootenay—Columbia, Canadian Alliance)

1025

The Chair

Mrs. Chantal Larouche

The Chair

Mrs. Megan Williams

1030

The Chair

Mr. Paul Boin

The Chair

Ms. Christiane Gagnon (Québec, BQ)

1035

Mr. Gaëtan Tremblay

1040

The Chair

Mr. John Harvard (Charleswood —St. James—Assiniboia, Lib.)

Mr. Dean Butler

Mr. John Harvard

Mr. Michel Morin

Mr. John Harvard

Mr. Dean Butler

Mr. John Harvard

Mr. Dean Butler

Mr. John Harvard

Mr. Dean Butler

1045

Mr. John Harvard

The Chair

Mr. Paul Bonwick (Simcoe—Grey, Lib.)

The Chair

Mr. Pierre Roger (General secretary, «La Fédération nationale des communications»)

The Chair

Ms. Wendy Lill (Dartmouth, NDP)

1050

Mr. Paul Boin

1055

The Chair

Mrs. Megan Williams

The Chair

Ms. Liza Frulla (Verdun—Saint-Henri—Saint-Paul—Pointe Saint-Charles, Lib.)

1100

The Chair

Mr. Michel Morin

The Chair

Mrs. Chantal Larouche

1105

The Chair

Ms. Sarmite Bulte (Parkdale—High Park, Lib.)

The Chair

Mr. Paul Boin

1110

The Chair

Mrs. Chantal Larouche

Mr. Gaëtan Tremblay

1115

The Chair

Mr. Gaëtan Tremblay

The Chair

Mr. Gaëtan Tremblay

The Chair

Ms. Christiane Gagnon

Mr. Michel Morin

The Chair

M. Pierre Roger

1120

The Chair

Mrs. Megan Williams

Mrs. Chantal Larouche

Mrs. Megan Williams

The Chair

Mr. John Harvard

1125

Mr. Paul Boin

Mr. John Harvard

Mr. Paul Boin

Mr. John Harvard

Mr. Paul Boin

The Chair

Mrs. Megan Williams

The Chair

Mr. Dean Butler

The Chair

1130

Mr. Gaëtan Tremblay

The Chair

Mr. Dean Butler

The Chair

Mr. Michel Morin

1135

The Chair

Mrs. Chantal Larouche

The Chair

CANADA

Standing Committee on Canadian Heritage

NUMBER 011

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, December 10, 2002

[Recorded by Electronic Apparatus]

¿ (0910)

[English]

The Chair (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): I call to order this meeting of the Standing Committee on Canadian Heritage.

[Translation]

The Standing Committee on Canadian Heritage is meeting to continue its study of the Canadian broadcasting system.

[English]

We're very pleased to welcome the following witnesses today. The first panel, from 9 to 11, will be on cross-media ownership. From the Canadian Conference of the Arts, we have Ms. Megan Williams, the national director.

[Translation]

We also have, from the Fédération nationale des communications, Ms. Chantal Larouche, President, and Mr. Pierre Roger, General Secretary; from Télécentre Drummondville, Mr. Michel Morin, President of the Board and Information Director.

Good morning.

[English]

From the Glennie Stamnes Strategy, we have Mr. Dean Butler, director of media services. He is also president of the Vancouver Media Directors Council.

And appearing as an individual is Dr. Paul D. Boin, assistant professor of communication studies at the University of Windsor. He is also an investigative journalist with the Real News Network.

We'll open the panel with Ms. Williams.

[Translation]

Mrs. Megan Williams (National Director, Canadian Conference of the Arts): Good morning. My name is Megan Williams and I am the national director of the Canadian Conference of the Arts.

[English]

The CCA is Canada's largest and oldest arts advocacy organization. We were founded in 1945 by the leading artists of the day, to impress upon governments and the general public the importance of the arts and cultural industries in Canadian society. The CCA is an independent, non-partisan, national arts service organization designated under the Income Tax Act.

The committee may recall that we appeared before you in April of this year to comment on your review of the Broadcasting Act. At that time, we emphasized the success of the act in providing a distinctive Canadian broadcasting system, with opportunities for Canadian artists and creators to provide their works to Canadian audiences. Despite the widespread availability of radio and audio-visual products from the world's largest producer of programming to the south, we have developed relevant programming in both radio and television that features a growing number of Canadian creators. Our recording artists, our actors, our directors, and our producers have known both domestic and international success.

In our opinion, a number of crucial supports are pivotal to this success. In an increasingly globalized world, these measures are not only necessary, they must be reinforced: a strong CRTC with a commitment to maintaining significant and realistic levels of Canadian content; a relevant and resolutely Canadian CBC; public and private organizations and partnerships to support and subsidize the production of Canadian cultural products; relevant and updated copyright legislation, as well as legislation to protect the status of the artist; mechanisms to ensure access by independent producers and creators through our broadcasting system; and limits on foreign ownership of our system.

We believe Canadian governments at all levels have lead responsibility for supporting the arts and culture, and for creating conditions for a dynamic, diverse, and sustainable artistic life in Canada. We believe the federal government should play a leadership role in arts and cultural support; adopt a comprehensive policy to govern all federal activities that have an impact on the arts and culture; and work in cooperation with governments at all other levels of jurisdiction.

Federal cultural policy should promote and enhance those aspects of our national life that are distinctly Canadian: the artistic and cultural practices and cultural identities of the two official-language groups, the aboriginal peoples, culturally diverse populations, and geopolitical regions. Freedom of expression is a fundamental value in Canada and should be central to all Canadian cultural policies.

You asked us to speak on two related issues that impact the cultural diversity of our system: cross-media ownership and limits on foreign ownership. It's our pleasure to bring the point of view of artists and creators to this discussion.

In terms of cross-media ownership, the last ten to fifteen years have seen a substantial reduction in the number of broadcasting companies. The CTV network used to be a consortium of many different owners. Now CTV programming is delivered by one company in every community in Canada. Moreover, CTV is also the owner of a large stable of specialty services. In turn, its owner, Bell Globemedia, also owns the Globe and Mail and Sympatico-Lycos.

Alliance Atlantis was once two different production companies with two specialty services each. The amalgamated company is now one of the largest producers and distributors of films and television programming in the world, as well as being a major player in specialty broadcasting.

There's a similar level of integration between broadcasting distribution and programming in other media. Quebecor is not only a major newspaper player, it also owns the largest cable company in Quebec and the most successful television network in the province, TVA. TVA is also involved in television production internationally.

This degree of integration brings benefits to the system, and at the same time poses dangers. Large broadcasters can license programs for all of Canada's markets and for several windows. For example, CHUM City can ensure the broadcast of Canadian science fiction films in most of the country on conventional television, while also providing them on its specialty service Space. Corus Entertainment can make multiple-window purchases of children's programs that otherwise could not obtain adequate funding to go into production, thereby providing viewers with multiple opportunities to see a program, and producers with a sizeable licence fee. At the same time, fewer owners with more properties means a reduction in the number of editorial voices, less competition in the advertising market, and fewer doors for creators to knock on when looking to sell a program.

For example, if a large radio company with a dominant position in Canada in country music radio decided not to take a chance on a new Canadian country artist, there would be real repercussions for that artist's career, particularly if that company was present in several major markets. If a cable company or satellite company with interests in broadcasting decided to package its properties with the most popular services and thereby excluded other services from the most popular packages, there could be economic consequences for those excluded.

When a major broadcaster with conventional and specialty channels, as well as an interest in multimedia, negotiates a licence fee with an independent producer, they are in a better position to dictate the terms of such a deal. In some cases, they require that the Internet or merchandising rights for a program be thrown in as part of the deal. With fewer broadcasters to deal with, the producer is not really in a position to say no to such a deal.

The CCA does not believe the system is in crisis at this point. A large number of companies are still competing across the country. While it is unfortunate that most of the voices are centred in Toronto or Montreal, we do have at least four major newspaper providers, four conventional television companies with national reach, and four major groupings of speciality. Similarly, most Canadians have at least three choices of multi-channel service providers—local cable, Star Choice and ExpressVu—while some also have access to multi-point distribution systems.

The CRTC has rules to ensure that services have fair access to cable and satellite, and rules to ensure that products of third-party program producers are aired by major broadcasters. The Canadian Film and Television Production Association is trying to negotiate an industry-wide solution with major broadcasters to ensure that producers receive fair market value for all of their intellectual property rights. If such safeguards work, there will not be a need for further intervention. However, it is not yet clear whether they will or not.

We do believe any further consolidation has to be looked at closely not only by the Competition Bureau from the point of view of completion, advertising, and market dominance, but also by the CRTC from a cultural perspective. The commission must consider, as it has done in the past, how any transaction provides benefits to our system. It must also look closely at the opportunity for a broadcaster to limit access to the system by third parties.

The system for redress must not only be available to those with the resources to hire legal expertise. Structural measures must remain in place and even be strengthened to ensure that convergence meets the promise of more content, in more formats, rather than providing the same material to fewer sources. In an increasingly complex regulatory environment, it's becoming more difficult for smaller players and for public interest groups to participate in a meaningful way in the debate over broadcast issues. The largest companies not only have access to their well-funded industry associations, but also maintain in-house regulatory and governmental relations experts. Smaller players must seek out help on a contractual basis, and many do not have the resources to do so. We believe it is important to find a way to ensure that intervenors on broadcasting matters have access to meaningful funding in the same way that public interest groups can be subsidized to intervene on telecommunications matters.

On the subject of foreign ownership, while some argue that it's not important who makes a program or who broadcasts it as long as it meets the Canadian content requirements, we beg to differ. To paraphrase the popular song, it's the singer, not the song. Canadian creators—both those who are born here and those who choose to make their homes here—contribute their viewpoints, moulded by their unique experiences. The result is our national form of cultural expression. The artistic choices made in the creation of an individual recording, feature film, or radio or television documentary or drama are of course affected by influences from around the world, but they are filtered through the sensibilities of Canadian artists and producers. Similarly, the creation of a program schedule should be based on appealing to Canadian audiences not as an afterthought to an international schedule, but as the primary focus.

At present, the direction to the CRTC on ownership is aimed at ensuring that Canadians hold control of broadcast undertakings. Significant changes to the rules would probably result in control of Canadian broadcasting companies by an international broadcasting conglomerate such as TimeWarner-AOL, Bertelsmann, or radio giant Clear Channel. In an industry in which fewer international companies could control more channels, how long would it be before Canadian program schedules were developed as a function of what the mother station or network in the U.S. or France was programming? How would Canadian creators provide their unique visions and experiences if the programming decisions were made in Los Angeles, Paris, Munich, or New York? How would the regulator be able to ensure compliance with its requirements when the U.S. trade office could be involved in the appeal of any decision a foreign-owned broadcaster didn't like?

¿ (0915)

Canada has taken the lead in promoting an international treaty on cultural diversity that aims to establish a permanent legal framework so that signatory countries might enact cultural policies to protect diversity of expression within their nations and among foreign interests wishing to obtain access to their markets. Not only has the Canadian government organized a network of culture ministers who are actively promoting the treaty on the international stage, it has assisted my organization, the Canadian Conference of the Arts, to launch an international network for cultural diversity that includes NGOs from around the world. As Canada's reputation for promoting diversity grows abroad, it would be ironic were we seen to be loosening the limits of foreign ownership at home.

One of the primary arguments for those who wish to change or even eliminate the limits on foreign ownership is the need to have access to a wider range of capital to finance the cost that the conversion of analog broadcasting to digital will occasion. In fact, there is already a significant opportunity for Canadian broadcasters to access international equity markets. The direction to the CRTC on ownership permits up to 20% foreign ownership of a licensee company and up to 33% of a holding company. Therefore, foreign investors can already hold up to 46.3% of a Canadian broadcasting entity. In fact, very few of our broadcasting companies have made such arrangements. Few, if any, even reach the 20% foreign ownership level, never mind the holding-company 33%. Before contemplating changes to the current levels, those broadcasters wishing for greater access to international equity should explore the possibilities already open to them. They might discover that the current limits are adequate.

In addition, the CRTC must examine whether the specific ownership arrangements in any particular case constitute control of a Canadian licensee by a foreign broadcaster. In fact, this may well be why foreign investors are reluctant to buy into Canadian broadcasting: because they cannot exercise control of the station or network.

The CCA supports the current requirement that control be held by Canadians. This is a key aspect to our current legislative and regulatory system. We encourage you, as members of Parliament, to take a strong position against the weakening of foreign ownership restrictions.

Thank you.

¿ (0920)

The Chair: I would like to mention to witnesses, and also to the members, that our work had been structured into two different panels today, one on cross-media and the other one on foreign ownership, but obviously these questions are always intertwined. This is why I allowed Ms. Williams to speak on both. If all of you want to do the same, please feel very free to do so. We'll then have one set of questions for you afterwards.

Madame Larouche.

[Translation]

Ms. Chantal Larouche (President, Fédération nationale des communications): Thank you, Mr. Chairman.

Good morning, committee members, and thank you for agreeing to hear us today.

As you indicated, Mr. Chairman, I will feel free to deal with both issues: cross-media ownership and foreign ownership.

I want to point out that the Fédération nationale des communications represents about 100 communications industry unions, mainly in francophone Canada, i.e. Quebec, New Brunswick and Ontario. The Federation has 7,000 member artists from radio, television and the cultural industry from the francophone public and private media in Quebec.

For many years, the Federation has involved itself in the issues of concentration of the press and consolidation of the communications industry. I should state right off the bat that the Federation has never been radically opposed to consolidation. Instead, we have tried to evaluate each proposed consolidation on its own merits, with a very clear goal: protecting the public interest and protecting the viability of an industry that in our opinion, is fundamental to a democratic society. But I must say that media ownership has gone through a very swift evolution that is particularly worrisome in recent years.

In Canada, we have regularly compared ourselves to the United States to explain the need for relaxing the broadcasting regulatory system. Yet the rules governing crossmedia ownership in the communications industry are even stricter in the United States than they are here. You probably know that with respect to broadcasting-newspaper crossmedia ownership, broadcasting licences cannot be granted to owners or operators of daily newspapers in the same community, which is not the case here. Broadcasting-cablecasting crossmedia ownership is now allowed. However, the U.S. federal commission that decides whether to grant licences can still deny an operating permit or prevent a transaction involving broadcasting and cablecasting.

The most recent crossmedia ownership transactions authorized by the Canadian Radio-Television and Telecommunications Commission are, in our view, particularly disturbing. In Quebec, there is still no explanation for Quebecor's acquisition of the largest private broadcasting and cablecasting network, Vidéotron.

Up until this transaction was authorized, CRTC decisions had in many ways confirmed that transactions allowing crossmedia ownership in a single market were exceptional in nature. When it authorized the transfer of ownership of Télévision Quatre Saisons to Quebecor, the CRTC agreed to make an exception to its practice. I should mention that Télévision Quatre Saisons was in a position that might have led to its shutting down and thus to the loss of conventional broadcasting services for the francophone audience of Quebec. The FNC in fact intervened before the CRTC at that hearing. We were extremely concerned about this kind of transaction, but at the same time, we recognized the need to find a way to ensure the future and viability of Télévision Quatre Saisons by establishing very strict guidelines, particularly with respect to editorial independence. However, most of the interveners before the CRTC at that time felt it was clear that this was an exceptional transaction that deserved to be authorized, but not without guidelines and formal rules. I do not think they expected the CRTC to expand the rule to all crossmedia ownership transactions that would come before it. So what was supposed to be an exception has now apparently become the rule.

In December 2000, the CRTC authorized the transfer of effective control of CTV to BCE. One year later, in November 2001, Bell, which also has interests in The Globe and Mail newspaper, became, with COGEGO, the owner of TQS. In its decision, the CRTC noted in response to the concerns raised that the applicant stated that the management of TQS would remain completely independent from Bell Globemedia's English language broadcasting undertakings like CFCF-TV/CTV and from The Globe and Mail newspaper.

¿ (0925)

So in 2001, Quebecor became the owner of Vidéotron cable company and TVA. In February 2003, the CRTC should rule on the acquisition by TVA, which is owned by Quebecor jointly with Radio-Nord, of stations belonging to Astral Medial, including CKAC Montreal, the biggest station of the private news radio network.

These crossmedia ownership transactions threaten democracy, the public right to information and the diversity of voices. These transactions also all too often lead to the centralization of operations in the major centres, which we in Quebec call the “montrealisation” of the airwaves, and deprive regional and local audiences of original content.

Quebecor is, of course, the most striking example of this. The acquisition of TVA made it the largest media group in Quebec, a formidable empire that controls, in Quebec, over 40% of conventional television revenue, almost 40% of daily newspaper circulation, 45% of the francophone market and 4% of specialty television revenue. In addition, Quebecor now controls 79% of cable revenue. With its various portals, Quebecor is now one of the key Canadian Internet players.

We are certainly not claiming that the situation is radically different in Canada. CanWest Global Communications leads the conventional television industry, with a market share of 30%, followed by Bell Globemedia with 23% of the Canadian market. As for English language newspapers, CanWest Global is in first place, with a market share of about 37%, followed by Torstar with 17%. However, in Quebec, two empires control 97% of the circulation of Quebec daily newspapers: Gesca and Quebecor. We are going to focus more on the effects of Quebecor. Obviously, this is a more frequent subject of intervention, because it is after all the most sprawling empire.

It is virtually impossible today, in Quebec, in the course of a normal day, not to consume a Quebecor product. Quebecor has a lot of power. It has multiple means to hug advertising revenue, which may threaten the viability of other media. Think of the Montreal newspaper Le Devoir. Quebecor can offer varied advertising concept options. It can also advertise its own subsidiaries in its media, thereby depriving other media of revenue they would previously have generated from Quebecor subsidiaries. It has a number of platforms for various artists and guests, which may deprive other media of content necessary for diversity, since the agreements with the artists and guests are exclusive.

Despite a multitude of guidelines, there is some slippage in the area of information content. The public now has a greater risk of not being informed of certain news events that cast the owner in a bad light, whereas before, newspaper readers who were deprived of information had a greater chance of getting that information on television. Journalistic analysis is also confined to this lone press group, which allowed TVA to replace its commentator, who was formerly with La Presse, with, of course, Quebecor's Journal de Montréal.

In fact, the media are becoming marketing companies that sell their products or those they sponsor. Literary, musical and film works sold, for example, in Archambault stores, a subsidiary of Quebecor, have readier access to media than works that have not found a taker in Quebecor stores. People who work in the industry, especially non-unionized employees, have become much more vulnerable with the existence of such a powerful and pervasive group. If I lose my job at the Journal de Montréal, it is hard to find another job at TVA, for example.

Finally, even though Quebecor has a lot of power in Quebec, it does still have some difficulties. Its debt level is extremely high, which in our view threatens the future of the empire's subsidiaries, which are the jewels of the communications industry. Convergence has not yet stood the test, and although Quebecor currently seems to be holding its own, we remain concerned about the consequences of the creation of such an empire.

In conclusion, I would say that crossmedia ownership cannot, in our view, be encouraged, especially when it comes to broadcasting-newspapers takeovers, because that accentuates the concentration of content and pressure on the public right to diversified and independent information.

¿ (0930)

It also reduces local and regional audiences' access to original shows and original news and content.

In our view, the CRTC should not hold hearings and make decisions on cross media ownership transactions until your committee has produced its report and recommendations. There should be no decision and no hearing on Québécor and Radio-Nord's application to acquire the Astral Media radio station until your committee has issued its recommendations to Heritage Canada; the stakes are too high.

We also feel that in order to protect national media ownership, Canada should avoid the creation of empires that may have to be dismantled or sold abroad if difficulties arise. This leads me to discuss foreign ownership.

We raised this issue as soon as the debate began in Quebec on concentration of the press, as well as before the CRTC. Concentration currently raises a number of questions, including cross media ownership, since, as I was saying before, empires are being built that will be difficult to keep within Canada, especially since international trade is currently under negotiation or discussion. There is a significant trend that threatens to sweep up cultural and communications issues and bring them into these international trade agreements. That is what we fear, and we hope the government of Canada will be extremely conscious in that regard, to avoid the inclusion of culture and communications in international trade agreements.

In our opinion, once the issue of communications and culture is included in international trade agreements, the CRTC will find it hard to maintain the existing rules to protect national media ownership, among other things.

We also feel that organizations such as Telefilm Canada would have a very hard time maintaining the existing rules and their financial support for Canadian television production companies. There is a real danger of being accused of setting up mechanisms that contribute to unfair competition among countries.

We believe that Quebec and Canadian ownership of press groups could be jeopardized in the medium term by media concentration. Who, in Canada, could afford to buy a giant like Québécor, given its huge size? Possibly American companies like AOL Time Warner or European groups like Vivendi could.

It is hard to accurately assess the impact of relaxing the foreign ownership restrictions. Initially, it seems appropriate to distinguish between ownership of companies that carry content and those that produce it. However, the furious battle that is currently being waged between the owners of cable and satellite broadcasting companies allow us to imagine the worst, where foreign conglomerates would be allowed to own such businesses in Canada.

Already, the CRTC rules on television service assembly are making trouble for signal carriers. It is true that these misunderstandings are due to the fact that the companies involved also have interests in television stations and networks.

However, an American or European company with interests in television or film content production could, if it controlled a cable or satellite broadcasting company, have some influence on the programming choices of partners who also have broadcasting interests.

With respect to media control by foreign interests, we fear a standardization of content in North America. Policy makers will therefore have to exercise the utmost caution, because our media are already heavily influenced by American culture. We should do everything possible to avoid complete cultural assimilation.

We can certainly hope that buyers of Canadian media would have a financial interest in protecting content diversity. That is something that supporters of foreign ownership of the media and of content carriers often bring up.

¿ (0935)

That is what we hope will happen, but we are led to believe that the search for profitability and economies of scale will see some foreign owners to erase the line separating American culture from our own.

If Canadian and Quebec media owners went ahead and standardized the media content they have bought, it would be surprising if foreign owners did not follow suit. If governments and local populations have to keep up the pressure on certain media owners take into account local interests, it would be surprising if the same would not have to be done with foreign owners. Otherwise, things might be a lot worse than they are now.

Therefore, in our opinion, Canada should not move too quickly to relax its foreign ownership restrictions. Canadian telecommunications and broadcasting rules aim to guarantee the public access to free, diversified and quality information.

In this era of trade liberalization, the role and mission of the media should be different from other businesses, since they play a key role in protecting our cultural identity, fundamental rights and democracy.

Canada should not adopt a mercantile approach with regard to foreign media ownership. The media are a pillar of our society's cultural development and governments have the duty and the obligation to protect this mission. Thank you.

¿ (0940)

The Chair: Mr. Morin.

Mr. Michel Morin (President of the Board and Information Director, TéléCentre Drummondville): Thank you very much, Mr. Chairman. Good morning, members of the committee.

Mme Larouche has just provided an extraordinary introduction for my presentation. She presented an overview of the situation. My observations are based on first-hand experience, since I spent about 20 years as a radio host and reporter and as a television reporter in what I would call tertiary markets, that is, areas without a direct television feed from Montreal. So I'm going to present you with a much more regional point of the effects of cross ownership. This will partly answer some questions raised by the committee and will no doubt also lead to new ideas.

It has become clear that, over the last ten years or so, print and electronic media companies are in a race to see who can become the biggest. The race clearly has a single objective, which is to increase shareholder value. When a television or radio market has become saturated and profits are stagnating, there is no other choice but to expand into other types of media.

You also hear that corporations must grow to survive in a globalized market. But it seems that the bigger you get, the less you care about social responsibility. Everyone knows what happened in the United States to certain corporations which were listed on the stock market.

The effects of cross-ownership in regional markets are not as obvious. Local media are basically at the mercy of the group they belong to. If things are not going well, there will be negative repercussions, but the opposite is not true. If things are going well, there are no positive repercussions. If it's a tough market, reporters and hosts stand to lose their jobs, but if profits are generated, that doesn't mean the local folks will benefit. The laid-off hosts or reporters won't be hired again. It's a one-way street which only leads to cutbacks.

It also means there's a loss of power on the part of local and regional managers. In other words, local information is on the hands of the bosses working out of Montreal, Toronto or elsewhere. You could say that regional information is an occupied territory. Regional media outlets are the victims of endless reorganizations. These reorganizations are necessary to improve the performance of the stock market, which leads me to say that the big race the media conglomerates are involved in leads them further and further away from the public and its interests, particularly regional ones.

I have a hard time understanding why reporters' and hosts' jobs are always cut in developing regions, when the need for increased coverage is growing, when certain issues require more thorough journalistic reporting and when economic development organizations are located in the regions. Whereas there are more and more regional development funds to help create economic, social and cultural activities, many of these regions are seeing their newsrooms fall to pieces. On the one hand, measures are taken to promote regional development and autonomy and on the other, someone, somewhere is cutting back on news services. It's clear that a developing region needs information. It's a key component. I therefore ask myself: who is losing out in a developing region which only has a single radio reporter? I'm not the only one who sees what is happening.

A few days ago, during the congress of the Fédération professionnelle des journalistes, the poor quality of regional information was discussed in a workshop. Among other things, people talked about the decrease in the number of media windows, which is happening in the case of weeklies which abide by the 80-20 rule: 80% of advertising versus 10% of information. Some journalists working for weekly magazines said they spent a lot of time producing documentary advertising, rather than covering breaking news or doing research. So reporters are busy producing documentary advertising.

¿ (0945)

As for changes taking place in radio, well, entertainment trumps information. If a morning radio show is to be successful, the lone radio reporter must also be extremely funny. The result is not always good, because once in a while you will hear a reporter swear in order to be funny on the morning show and use language which is not appropriate for his profession. Furthermore, some radio hosts have to take on the role of reporter when the actual reporter is on holiday. So sometimes the host is all over the radio map in a given week. One evening, you will find him covering a municipal council meeting and on the weekend you will find him reporting from a furniture store. The results are atrocious, something we are familiar with in the regions. Sometimes advertising reps even get involved with the newsroom. It happens all the time. These same reps will cover a press conference because the only available radio reporter is covering another one. There is something wrong with this picture.

In conclusion, I would argue that the virtues of cross-ownership have yet to be proven. In fact, these virtues only serve the interests of local investors, particularly in developing tertiary markets which have pressing needs. I do not know how you are going to come up with legislation to limit media convergence. However, I do think we have laws and organizations which are effective in certain circumstances.

In my view, the federal government and the CRTC should give smaller players the chance to enter the field, since financial considerations are the main priority of corporations. Let me give you the example of TéléCentre. We are a television work cooperative which has signed a partnership agreement with COGECO Câble in Drummondville to co-produce information programs. Of course, we rely on sponsors since we cannot advertise. But we need money and there is no way I want to raise money by organizing bingos. I want the right to advertise.

Why is it that if I decide to open a restaurant tomorrow, I will be able to do so just by filling out the paperwork? And why is it that in 2002, if I want to create a news organization, all kinds of obstacles are put in my way? My organization cannot even advertise and I am told: "Yes, but Sherbrooke would not agree, Astral would not agree, Corus Entertainment would not agree". Why is it their business, since they only have antennae in Drummondville? They import programs from Montreal and the United States, but there are also things happening in our own backyard. We are a growing town.

Take the agro-food sector, for instance. In the last few years, people have enjoyed a local refined liquor which was created by a local producer. We enjoy the delicious cheese produced by someone who lives a few blocks away. Is regional information not also something which is locally produced and which should be better promoted and protected?

There has been a revolution in the area of locally produced goods, which does mean that Kraft will close its stores in Quebec just because we are eating more locally produced cheese. Local and regional news should be produced locally, in a regional context and with final decision at the local level. Free enterprise must serve the needs of regional free expression.

Mr. Chairman, I will now briefly speak to foreign ownership. It will not be very long.

There is no single miracle law which would apply across the planet. The federal government must watch out for foreign ownership of our companies. Mme Larouche put it well when she said that we already have enough problems with regard to domestic companies, which are more or less stifling the regions.

We have not seen any miracles yet from AOL Time Warner or from Vivendi Universel, whereas back home, BCE and Quebecor still have a lot to prove.

Thank you.

The Chair: Thank you very much, Mr. Morin. Your evidence is very important because it is the first we have heard on the impact of this on the regions and on local broadcasting. Thank you very much.

Mr. Butler.

[English]

Mr. Dean Butler (Director, Media Services; and President, Vancouver Media Directors Council, Glennie Stamnes Strategy): Thank you.

I also speak more from a regional concern than a national concern. My interests are primarily British Columbia-oriented, and the examples that I'll be bringing to you are relevant to British Columbia.

I believe concentration of ownership and the economic consequences of media ownership are inseparable. They're entwined. Because of the concentration of ownership in British Columbia, what we're dealing with is the fact that we have one company owning virtually all of the newspaper assets in British Columbia, except for some small-market weekly papers. All of the daily newspapers are owned by one company. As well, one of the dominant television stations is owned by the same company that owns the newspaper assets.

To give you a little history in terms of what has happened with television in British Columbia, due to proliferation of cable signals and alternative TV channels, conventional channels are now 30% less effective in delivering local advertising audiences than they were even ten years ago. This rapid proliferation of channels means less access to audiences in the regional market. It's not the same as what you might experience in Ontario, where, from an advertising perspective, you can buy nationally oriented cable signals that are sold to be efficient and effective for Ontario. In British Columbia, you don't have that same option.

In the last ten years, with the 30% of the audience that they've gained, the cable companies have essentially removed that audience from access in the British Columbia market, from an advertising point of view. As far as marketing is concerned, that has shifted the supply curve of audience to the left. It has drastically increased the price of buying advertising through television in British Columbia, to the point at which many retailers now no longer have access to buying television advertising in their own market. Television is being sold primarily on a national basis and to national advertisers only. Those large retailers certainly do enjoy the economic benefit of the ability to buy television in the market. They have the money to do so.

For those that are economically challenged as far as size is concerned, however, there is an extreme disadvantage. Even those in certain categories—regional companies and restaurant chains that are regionally oriented—are at an economic disadvantage relative to national chains. National chains can buy television advertising in British Columbia, whereas regional chains find it very difficult. Within our own country, then, there is an imbalance in terms of competitive ability for regional to work against national.

This problem is exacerbated in terms of regional markets like Kelowna, Prince George, or Kamloops, all of which have local television stations. Recent decisions from the CRTC relative to decisions 457, 458, and 459, provided more advantage to national advertisers. Prior to these decisions, there was an unwritten rule in the local economy that air time would be available for regional broadcasters to buy. With decisions 457, 458, and 459, those restrictions are gone. It is to the advantage of the TV stations to sell all of their advertising on a national basis and to leave nothing for the regional advertisers. In effect, we are being blocked out of television in terms of access.

How does that work in terms of concentration of ownership? When looking at small-market British Columbia in order to access Prince George, Kamloops, or Kelowna, a combination of television and newspaper was very effective in the past in terms of providing advertising reach into those markets. With what's happening now, even if we just bought for television for Prince George, Kamloops, and Kelowna, that advertising time that we've already bought can be sold to national interests. While we might think we've bought advertising in those markets, it essentially can be sold out from underneath us and we can't deliver advertising to a local market to meet the objectives that our clients require. As a result, television can't reasonably be considered in terms of advertising in Prince George, Kamloops, or Kelowna, because you don't know if you're going to get the air time that you bought.

If you can't get television, your next opportunity to provide reach is the newspaper. Well, the company that owns the newspaper is the same company that has a huge control over what's going on in television. It is in the interests of one particular company to sell all of its inventory to national bases, because that means it is forcing regional companies to use the newspapers to provide reach into local markets, instead of television. It also owns the newspapers, so the aspects that we're facing are huge increases in costs to provide television in our local markets, and we are limiting our access to that due to fragmentation and those aspects at the same time.

¿ (0950)

We are now faced with a company that owns all of the newspaper assets. In the last few years, we have also seen large rate increases on behalf of those newspapers. From an economic perspective, it is becoming very difficult to operate on a regional basis in the face of that kind of competition. It definitely favours national perspectives and national interests, and it goes against supporting any sort of regional economy.

I don't believe regional TV stations can operate in that environment, and I believe the local television stations—stations like CKPG Prince George, a CBC affiliate—will eventually find themselves being repeaters only, because they will not be able to sell advertising on a local basis. From an economic perspective, then, the local markets have really lost the advantage of having a television station in their own market. That television station has been usurped by national interests.

Within all of that, having that concentration of ownership and that cross-media ownership is damaging from an advertising perspective. I wholly welcome competition in advertising. It provides balance. It provides efficiency. It provides competitiveness to keep costs reasonable. Everybody understands that costs will increase, and 2% to 3% a year is reasonable. But 10% or 15% is not. From a television perspective, just to buy the Vancouver market.... I personally bought television advertising in Vancouver ten years ago at a cost of $100 a point for 200 points. That's $20,000 a week. To buy that same TV today, it's going to cost $500 a point. It has increased ten times over, so it would be $200,000 for that same air time. It has gone up ten times in ten years.

In terms of me trying to work on behalf of a small, regional advertiser, essentially those assets that I was able to buy have been sold nationally, and nationally they have the advantage of using cable signals to balance against the cost of conventional TV. They can use cable television to balance the efficiencies. We don't have that opportunity in British Columbia because we are not able to buy cable signals to be effective or efficient for British Columbia. We could buy them, but 60% of the audience for cable stations is in Ontario. Those cable stations are priced and sold for Ontario, not for Canada in general. We're therefore at an economic disadvantage against central Canada as well.

In our own industry, we are facing huge consolidation of ownership among advertising agencies. There might be four or five major agencies in Canada that are now essentially controlled out of New York. I have been told point blank that I cannot fight New York. Our industry is being decimated by concentration of ownership not only within the media and across media, but within advertising itself. Anything we can do to create greater competition, then, is a better thing for our country and especially for our region in British Columbia, which we're in danger of losing control of from an advertising perspective.

Thank you.

¿ (0955)

The Chair: Thank you very much, Mr. Butler. You have reinforced many of the points made by Mr. Morin.

Mr. Boin, the floor is yours.

Mr. Paul Boin (Assistant Professor, Communication Studies, As Individual): As my co-presenters have touched on a lot of the points, I'm not going to spend time repeating them. I'll just be adding some new points and perhaps reiterating others.

Mr. Chair, members of this special heritage committee, I thank you for the invitation and the opportunity to discuss these issues of critical importance that this committee and the Government of Canada have chosen to review—namely, considering the state and future of the Canadian broadcasting and media system. I would also submit that the state of our society and democracy is also at stake in matters relating to our media and communications system.

The first point that I'd like to address is the notion of why this review is taking place in the first place. There are cynics out there who assume that this review is happening for the wrong reasons, in the sense that it's government succumbing to an intense industry lobby that is unhappy with certain regulations and restrictions. I tend to not believe that, and I hope this is a remarkable opportunity to shape our democratic media system for the 21st century.

In that regard, however, this word, this buzzword, this term “convergence”, is used as a catch-all phrase to justify and to point to the irrelevance of legislation or even regulatory bodies. In this sense, in an interview last year in Broadcaster magazine, David Colville, who was then acting chair of the CRTC, alluded to the fact that the Broadcasting Act of 1991, far from being irrelevant, is in his opinion technology-neutral. Colville went on to say the Broadcasting Act

is still relevant. The government made a very deliberate and particular attempt in 1991, and well before then, to make the Broadcasting Act technologically neutral and largely focus on what the real issue is and that's programming and content, and not the particular technology that's used to deliver it.

I think that principle still holds true today.

There are certain provisions in the act, such as the one that states our media companies must be Canadian-owned and -controlled. There are Canadian content requirements that are problematic to the industry. The industry sees those as just barriers to making more money. Again, I think this is a tremendous opportunity to correct some of the ills that have been stated by my co-presenters today, and to move forward to creating a healthy, democratic media system and democracy.

There are also double standards and regulatory voids that need to be addressed. For example, if we are to believe that the Internet changes everything, as General Electric's Jack Welch has stated, then why is it that private, for-profit corporations are expected, according to our press, to reinvent themselves and survive in this perpetually changing new reality, while public institutions that exist to safeguard the public interest are said to have outlived their mandate and therefore should be disbanded or weakened? I believe this is the type of logic that is put upon us.

An example of a type of regulatory vacuum presently in existence was alluded to earlier, and that's the situation that occurs when a TV company or radio company wants to buy a newspaper in the same area. Right now, the Competition Bureau says it's not concerned with editorial diversity, only advertising space diversity or opportunities to advertise. The CRTC, on the other hand, says its mandate is just broadcasting and that it can't focus on the print media.

À (1000)

Again, this is a regulatory vacuum that must be filled proactively by our legislators. It was done in not the most democratic way by an order in council by the Trudeau government, and that order was then overturned by a Mulroney decision. I think this needs to be put on the legislative agenda, be given the light of day, and be proactively addressed, in order for us to deal with this issue. Again, we're talking about cross-media ownership and all of these types of issues. Media companies are multimedia companies, so that's a void that needs to be corrected.

The other thing to remember is that, in this age of corporate-led globalization, you hear about the need for deregulation, but deregulation is often just a code word for re-regulation. Instead of choices being regulated by publicly accountable officials and institutions, our choices as citizens are regulated by corporations that are unaccountable to the public interest. They might claim they're accountable to consumer interests, but they're not accountable to citizen interests.

Recent CRTC decisions, in my view and as expressed by others, have served to undermine the Canadian media and broadcasting system and the diversity of ideas possible in our media landscape. I tend to think the CRTC seems to be suffering from what I call STL disorder, or selective and temporary logic disorder. For example, when Global Television was in the process of acquiring broadcasting outlets from Witt Communications, they said Canada was a mature country and that Canadians deserved more editorial diversity. By that, they meant Canadians deserved three national broadcasters, not just two, the CBC and CTV.

The argument was, yes, approve this merger because Canadians will be better served with greater editorial diversity. The CRTC went along with that, but shortly thereafter, in approving the BCE takeover of CTV and the CanWest takeover of Hollinger, and also more recently by allowing cable companies to own majority stakes in specialty television channels, that argument, the editorial diversity principle, was cast aside for this new—and remarkably so—argument called “bigger is better”.

In her parting decision, former chairperson Françoise Bertrand stated that we need bigger media companies in order to compete on the international scene. I've looked through the Broadcasting Act. There are principles in it that talk about the need for a diversity of voices, providing Canadian programs, and distributing them to Canadians. Nowhere in the Broadcasting Act—which the CRTC is mandated to protect and deliberate over—is it said that the CRTC should be concerned with the global aspirations of Canadian-based media companies. In many ways the global aspirations of Canadian-based media companies serve to come back to harm what's available in the Canadian marketplace. Shows such as CSI are popular, but they're watered down of any kind of Canadian content that might not be easily understood in the universal marketplace of cultural content.

Regarding cross-media ownership and the deleterious effects on content, again, in terms of drama or entertainment-type programming, it has that effect of a homogenization of content. In terms of news and public affairs programming, however, the consequences are more severe. We're talking about protecting our culture and protecting cultural sovereignty, but we also need to think we're protecting our democracy and trying to improve our democracy. By that, in terms of news and public affairs programming, when you have a concentration of ownership and cross-media ownership, it leads to a type of drive-by journalism. With fewer reporters having to cover more stories, you have a situation in which reporters are forced to just chase around press conferences or regurgitate press releases. And those press releases aren't just on paper these days. They're broadcast-ready, audio-video interviews and analyses that appear on our newscasts.

À (1005)

Another point about the deleterious effects of cross-media ownership and further concentration and consolidation is that they lead to shameless cross-promotion. Different stories—perhaps an entertainment story—might filter into a newscast, and it might have to do with a program that's going to air on one of the affiliated networks or magazine stories.

Another deleterious effect is the screening out of real news stories. As these companies become larger and their connections to other industries do so as well through advertising and possibly board-of-director memberships, it leads to the screening out of legitimate, real news stories. Article 4.18 of the CanWest Global–Southam newspaper partnership deal says the partnership needs to be made aware of any stories that might be potentially embarrassing to CanWest Global or any of its affiliates. Again, if you allow for further and further consolidation, that eliminates a greater and greater number of real news stories that need to be told.

The other part is that, in terms of following the rationalization in the central operating principle of a mainstream media corporation—like any corporation—the goal is to maximize profit. There's a rationalization of resources and using cross-purposing content, so there's a reduction in editorial diversity, an increase in wire service, etc.

Moving on to the foreign ownership restrictions potentially being considered for removal or limits, first of all, if you take it over 50%, as has been requested by some of the media presentations in the last two weeks, what's the difference? Once you're beyond 50%, you control that entity. As mentioned, the many foreign, large, mega media companies based in the U.S. or elsewhere aren't as interested in the Canadian marketplace, because they're really interested in control and rationalization. If this were to happen...for example, the new chairman of the Federal Communications Commissionin the U.S., Michael Powell, has expressed a disregard for the public interest and even questions whether it exists as a concept itself. The Americans are presently reviewing all their cross-media ownership regulations as well. If we open up our borders, we'll just get that type of ethic filtering through to the Canadian environment.

I know time is pressing, so the last thing I'll mention is that we need to really consider international trade issues and negotiations. Whatever the efforts, however well-meaning they are and however painstakingly they are done in this review, they can be swept aside through some of these agreements, such as the General Agreement on Trade in Services or the free trade agreement of the Americas. The “national treatment” phrase would mean that if culture was opened up in these agreements, the CBC would not be able to receive further funding. Canadian television funds would be eliminated. And the other phrase used in these types of agreements, “performance requirements”, would mean we would be powerless to say to AOL Time Warner that it needs this much Canadian content and that it is not abiding by our licensing requirements.

The last thing is that if we are going to try to improve our media and communication system, and hence our democracy, the best way is to provide for a diversity of voices. The only real way to do that is to ensure that there is a diversity of owners.

Thank you .

À (1010)

The Chair Thank you very much, Mr. Boin.

[Translation]

Mr. Tremblay, you have the floor.

Mr. Gaëtan Tremblay (Professor, Communications, As Individual): Mr. Chairman, ladies and gentlemen MPs, I would first like to apologize for being late; I thought I was to appear at 11 o'clock, and I prepared mainly for the issue of foreign ownership.

I had the pleasure of conducting a study last year on an evaluation of the rules—

The Chair: Mr. Tremblay, just so everyone knows who you are, I would like to point out that you are a professor of communications at the Université du Québec à Montréal.

Thank you.

[English]

M. Gaëtan Tremblay: Merci, monsieur le président.

J'ai donc eu le plaisir de faire, avec des collègues de l'Université d'Ottawa, Eric George, et de York University, Fred Fletcher, une étude sur l'évaluation des règles de propriété étrangère par les différents acteurs de l'industrie et les différentes associations concernées. Nous avons donc, au cours de l'année dernière, conduit à peu près 25 entrevues, autant à Montréal qu'à Toronto, auprès de représentants des grands joueurs de l'industrie, mais aussi des associations, des syndicats et de quelques personnalités indépendantes, mais qui jouissaient d'une longue expérience et d'un prestige dans le domaine des communications.

J'ai essayé de me conformer aux conseils qui m'ont été donnés et j'ai donc préparé une très courte présentation que je vais vous lire. Je profiterai de la période de questions pour vous donner d'éventuelles précisions et compléments d'information sur cette étude, dont je me ferai d'ailleurs un plaisir d'envoyer au comité le rapport synthèse, qui fait une cinquantaine de pages.

Il est très difficile de tirer des conclusions précises au terme de notre étude. Comme vous l'avez sans doute vous-mêmes constaté lors de vos audiences, les opinions sont très partagées et les consensus, rares. En simplifiant, on peut polariser les points de vue en deux camps: celui des personnes favorables à un assouplissement, voire à une élimination des règles de propriété étrangère, et celui des opposants.

Entre ces deux pôles, on retrouve toute une gamme de nuances, mais les unes et les autres finissent toujours par pencher d'un côté ou de l'autre. Chacun avance des arguments crédibles, appuyés parfois d'exemples concrets mais souvent non démontrés, non appuyés sur des études sérieuses et rigoureuses. On leur accordera plus ou moins de poids selon que l'on est plus ou moins favorable a priori au libre marché, à la concurrence, à la mondialisation, à l'encadrement législatif et règlementaire, à l'intervention active des pouvoirs publics.

Les tenants du premier camp souhaitent une déréglementation pour faciliter l'accès aux capitaux, lequel serait insuffisant sur le seul marché canadien pour assurer la croissance et l'innovation. De même, ils attendent de l'assouplissement des règles canadiennes qu'il leur ouvre en retour l'accès aux marché étrangers. Selon eux, la propriété peut être dissociée de la création et de la production de contenus. On pourrait libéraliser la première tout en réglementant la seconde. Moyennant un encadrement clair du CRTC, ils ne redoutent aucun impact négatif sur l'emploi et les contenus canadiens.

Les opposants, à l'inverse, ne croient ni à la pénurie des capitaux sur le marché canadien ni à la séparation de la propriété de la production des contenus. Selon eux, la politique culturelle canadienne forme un système, à tel point que la remise en cause d'un seul élément, le contrôle de la propriété par les intérêts nationaux, risque de la mettre en péril dans sa totalité. Dans cette perspective, la propriété étrangère se traduira inévitablement par des pertes d'emplois, une diminution des programmes canadiens et une perte d'expertise culturelle.

À partir d'un constat de points de vue aussi contrastés, que peut-on proposer pour la suite des choses?

Premièrement, nous pensons qu'il faut se garder de toute précipitation. L'urgence qui semblait émaner du vent de mégafusions au début du XXI^e siècle a considérablement diminué, au point qu'on peut même se demander, au vu des difficultés rencontrées par AOL Time Warner, Vivendi-Seagram, Quebecor Media, BCE et autres aventuriers de la convergence, si le vent n'est pas en train de tourner. Nous pensons qu'il ne faut pas prendre de décisions précipitées parce qu'il n'y a pas d'urgence, pas de consensus, pas de données convaincantes sur l'absence d'impact de la propriété sur les contenus, et que la politique canadienne culturelle en vigueur depuis quelques décennies présente, comme presque tous les acteurs interrogés en ont convenu, un bilan plutôt positif.

Deux grandes questions doivent être résolues, selon nous, avant de procéder à une révision des règles concernant la propriété étrangère dans le domaine des télécommunications et des médias: premièrement, la distinction entre opérateur de réseau et offreur de contenus; deuxièmement, les liens entre la propriété et la création-production de contenus.

À (1015)

En ce qui concerne cette dernière question, soit l'existence et la nature d'une éventuelle interdépendance entre la propriété et la création-production de contenus, il y a encore trop d'inconnus pour prendre une décision éclairée. La prudence s'impose donc pour soupeser ce que l'on risque de perdre par rapport à ce que l'on espère gagner par un changement des règles. Nous avons, dans un plateau de la balance, un hypothétique élargissement de l'action en capitaux et l'accroissement de la valeur des actions de quelques entreprises, et dans l'autre, la stimulation de la création et de la production des contenus culturels par des artistes et des travailleurs canadiens.

Il n'a certes pas été démontré que l'assouplissement des règles de propriété étrangère aurait des conséquences majeures et désastreuses sur la propriété et la diffusion de contenus canadiens, mais il n'a pas été démontré non plus qu'il n'y aurait pas d'impact ou que cet impact serait négligeable.

Cette relation entre la propriété et la création-production de contenus est mal connue. Elle est pourtant au coeur du débat et doit faire l'objet d'études plus approfondies. Les experts étrangers que nous avons sollicités, de Grande-Bretagne, d'Australie, du Mexique et de France, n'ont pas non plus fait état de données fiables et concluantes sur la question.

Nous proposons donc que quelques analyses de cas longitudinales soient effectuées sur une période historique suffisamment longue et prenant en considération l'ensemble des facteurs pertinents, pour mieux documenter les rapports entre la propriété et la création-production de contenus.

Par ailleurs, au moment où le Canada, de concert avec d'autres pays, tente de convaincre la communauté internationale du caractère particulier du secteur des industries culturelles et de la nécessité d'adopter un instrument juridique de portée internationale pour préserver et promouvoir la diversité culturelle et encadrer les échanges culturels par des règles spécifiques, il nous semblerait pour le moins curieux que son Parlement adopte des mesures qui risquent de fragiliser à des seules fins économiques sa propre politique culturelle.

La seconde question, que j'ai énoncée en premier, soit la distinction entre opérateurs de réseau et offreurs de contenu, même si elle n'a pas rallié toutes les personnes que nous avons rencontrées, nous semble plus claire parce qu'elle a longtemps été appliquée avec succès par les régulateurs nord-américains. Malgré les progrès technologiques, ceux de la numérisation en particulier, qui ont rendu plus floues les frontières entre contenant et contenu et ont été à l'origine de la mise au rancart un peu rapide de la distinction entre broadcasters et common carriers, nombreux sont ceux qui croient qu'elle devrait encore servir de critère de base pour la réglementation. Dans cette perspective, les règles de propriété étrangère pour les offreurs de contenu resteraient inchangées, soit à 20 p. 100, du moins tant que les liens entre propriété et création-production n'auraient pas été clarifiés, mais elles pourraient être assouplies pour les opérateurs de réseaux. Les entreprises devraient cependant choisir.

Comme d'autres, nous ne croyons guère à l'autonomie de gestion de filiales appartenant à un même groupe, malgré l'adoption de codes proclamant l'étanchéité entre les uns et les autres. Les groupes qui opteraient pour une stratégie de convergence devraient se conformer aux règles les plus strictes. Les opérateurs de câble, de téléphone et de satellite qui se spécialiseraient au contraire dans la seule gestion de réseaux pourraient accéder aux capitaux étrangers avec plus de latitude.

Cette ouverture pourrait-elle aller jusqu'à 100 p. 100 des actions avec droit de vote? Pourquoi pas, dans la mesure où l'État prendrait des mesures pour garantir la sécurité du pays, comme chez nos voisins du Sud.

Merci.

À (1020)

[Translation]

The Chair: Thank you very much, Mr. Tremblay.

Before proceeding to question period,

[English]

I'd like to reassure you, Mr. Boin, that this is very far from an industry lobby. I think you are going to find the members here are a collection of free spirits and independent minds. They're not going to be swayed by one group or another, I can assure you.

Just to clarify, we'll have two questions from the official opposition, two questions from the government side, go back to Mrs. Lill, and then have one other question from the government side. The rounds after that are on done an open basis, with the rotation going according to when members put their names in.

Mr. Abbott.

Mr. Jim Abbott (Kootenay—Columbia, Canadian Alliance): Thank you very much.

I must say that after five or six sessions like this, it was really refreshing to hear from you, Mr. Butler. You have introduced a totally different element to our considerations, and I think we have to take your representation very seriously.

You will have noted that the rest of the presenters are somewhat homogeneous in dealing with the whole issue of culture and the influence on culture with respect to Canadian ownership and cross-media ownership. This has been a homogeneous discussion going back and forth, so as I say, I think we have to take very seriously the element that you've introduced to us today and give serious consideration to it.

On the basis of the presentations today and the ones we've heard previously, I was just going to say that I am prepared to announce my recommendations to our platform committee for the next election. If elected, we will give a five-year tax holiday to all newsmaking entities and increase CBC funding from $800 million to $2 billion. It seems to me that if we do that and if we follow along with the general thought process that we have heard over the last five or six sessions and again today, I would expect that by making those announcements, this would influence the newsmaking people—the editors, the people who make the decisions about what appears on our screens and in our newspapers. It would influence them to such an extent that they would give the Canadian Alliance the coverage it deserves.

This is to say that the representations we have had heard today and over the last five or six days—and I do intend to be argumentative, but with the greatest respect—seem to say Canadians don't have minds of their own; that Canadians wouldn't rise up and rebel; that Canadians can't distinguish what the Aspers are doing; that Canadians can't distinguish what BCE is doing; that Canadians can't distinguish what all the news media are doing. Of course they can.

With the greatest respect, I suggest that particularly in the area of foreign ownership, if it is desirable—and that's a discussion for another day—to have some kind of rules and regulations with respect to Canadian content, that's really quite irrelevant to the person who actually owns the entity. The entity that owns the ability to be able to broadcast, whether it's entertainment or news, is broadcasting to a Canadian audience. The assumption is that somehow, if a British oligopoly or monopoly comes in and buys CanWest-Global or BCE's interest in CTV or whatever the case may be, or if an American interest does so, we're suddenly going to be seeing Coronation Street and Emmerdale as prime-time shows. I would suggest, with respect, that this isn't going to happen.

The entities have to broadcast news that is reasonable and balanced in the minds of intelligent Canadian viewers and people who are watching what is going on. Furthermore, in the area of entertainment, they have to broadcast a mix that is going to maximize their profits. They are not simply going to be inserting what they choose to insert.

I leave it open for the panel to come back at me.

À (1025)

The Chair: Who wants to come back at Mr. Abbott?

Madame Larouche, followed by Ms. Williams.

[Translation]

Mrs. Chantal Larouche: We certainly don't intent to suggest that the Canadian public is incapable of judging the quality of the content it is offered. However, all of the studies that have been done, especially with respect to news, by the Fédération professionnelle des journalistes du Québec or by the Fédération nationale des communications, in 1991, lead us to conclude that the public, in general, is satisfied with the media.

However, when you dig deeper, when you ask the media how they go about making their editorial or press coverage decisions, or when you ask them questions directly related to the expertise of people working in the media and who know they could do more and better to further protect their interests, even just their news interests, you find out that there are people—it is not that they are ignorant—who aren't savvy to the media evolution. They are unable to truly appreciate what the media could offer them and to evaluate the extent to which it could be better.

Those who work in the media, however, know full well that there have been huge transformations that have reduced the workforce assigned both to news coverage and analysis, as well as regional program production.

In the big cities to, there is a tendency to centralize and to want to use a product made for one subsidiary at a later stage by another subsidiary; it is what is called “value-added”. The media have developed these practices, and the end result is a reduction in the quantity of content available to the public.

[English]

The Chair: Ms. Williams.

Mrs. Megan Williams: I just want to add to what's being said here. I don't think anyone suggested that Canadians can't distinguish between the different types of programming they are seeing and where it is coming from. But I think it's pretty clear that large broadcasters don't make their choices about their programming based on what people want to see. Rather, they do so based on what they can afford to put on, what's available cheaply, and so on.

Many of these large, converged broadcasters bought their properties at the height of the market back at the beginning of this century, and they have discovered that they have cashflow problems. They're therefore looking around for cheap broadcasts to show, so we're not necessarily seeing what we want to see as Canadians, but what's cheap and readily available to us. I think viewers are well aware of that phenomenon as they flip through the fifty channels and find that nothing's on.

À (1030)

The Chair: Mr. Boin.

Mr. Paul Boin: In regard to ownership affecting content or in regard to allowing different types of owners and foreign owners to come in, and in regard to how that might affect content, there's a general trajectory because the central operating principle is to maximize profit, to produce content cheaply and get a large audience. What happens is that people aren't aware of what they're missing. For example, last week, there was a court decision in which the media were fighting tooth and nail to get access to the courtroom for the Willy Pickton trial. That's an issue that's sensational and will sell a lot of newspapers, not unlike the Bernardo–Homulka affair.

But another issue that's more critically important isn't getting the same type of media buy-in. An action has been brought before the courts right now by the Sierra Legal Defence Fund, which says NAFTA's chapter 11 and its secret tribunal proceedings go against the Canadian Charter of Rights and Freedoms because media, and hence the public, aren't allowed access to decisions that are being made and which affect health policy, environmental policy, and everything else. The Sierra Legal Defence Fund has tried to get the Canadian Newspaper Association on board to support them in this endeavour, but the CNA is not interested.

Again, we don't know what we're missing, and the more consolidation of ownership that we allow.... And if we allow foreign ownership, then our Canadian sensibility perspectives will be jeopardized and issues that are vital to the public interest will be undermined.

[Translation]

The Chair: Ms. Gagnon.

Ms. Christiane Gagnon (Québec, BQ): Mr. Tremblay, your presentation was quite a shock, this morning.

According to what was said, the U.S. has some protection. According to your evaluation, we would be going even further than the U.S. if ever we were to raise the limits on foreign ownership. At that point, Canada would almost be a precursor as far as lifting those barriers is concerned. What we perceive and what the witnesses had addressed is the whole matter of contamination in the choice of content, the exclusion of certain works and cultural protection. We are trying to find an instrument that could protect cultural viability, especially in Canada, together with linguistic duality.

I get shivers just thinking that the barriers to foreign ownership might be raised in Canada while other countries are far more protectionist. Don't you think we would be going a bit far? We haven't cleaned up our own backyard and it has its share of irritants. You say that we don't have the tools we need to evaluate all that, but at the same time the journalists are talking about that sort of contamination in the different media when they are purchased by a single owner. It is a concern for freedom of expression and freedom of the press. There isn't just control over the content, but there is also the matter of freedom of the press. When you have a single owner with newspapers, TV stations and cable distribution... That is when the people who want to question a certain way of doing don't have very many doors they can go knock on.

When you are very big, you are very powerful and you can make gains with other businesses. Don't you think that adopting such a business model in the media arena is dangerous? Aren't there indications showing that we should be very careful with all that? Who might the major shareholders be and what would the quality of the investor be?

In Le Monde diplomatique I was reading that some people had major interests and were owners of armaments industries and certain cultural industries like satellites and the Internet. I think we have to be wary of that kind of investor who might come to Canada and take over a form of control that can be dangerous for the quality of life of our people.

À (1035)

Mr. Gaëtan Tremblay: First, two comments. First as concerns the freedom of choice of Canadian consumers, I don't think the question is to offer them no choice at all or offer them everything. In my opinion, whatever the system, consumers will decide what they want to watch but they don't decide what's on the market. So the question is whether the system will be able to offer them the greatest possible diversity so that they can make choices.

Some say that this greater diversity would be generated through the market; others doubt that the market will automatically produce that diversity and talk about past experience showing that when there are no guidelines, entrepreneurs all tend to offer the same thing. So, in their opinion, it's not through a multiplication of channels that you'll necessarily obtain diversity.

In my opinion, wondering whether or not we should trust Canadians as to what they choose to listen to is a misleading question. For example, in a bookstore you don't question the choice of consumers. The important thing is to be able to offer a diversity of interesting books and make sure that there are as many books as you can possibly get into the bookstore. It actually seems to me that the same line of reasoning would apply to cinema and television.

One also wonders, Madam Member, whether Canada wouldn't actually go faster than everyone else in the area of liberalization if ever it were decided to raise restrictions concerning foreign ownership. At the present time, it is clear that all around the world there's a lot of talk about reviewing foreign ownership rules, especially in developed countries. However, few countries and that more specifically includes our neighbours to the South, have taken any concrete steps to totally liberalizing those rules. Europe has adopted more flexible rules, but they only apply to members of the European Union.

As I said this morning, the data we have don't allow us to cry out high and clear that we would be courting disaster if foreigners offered their products on the Canadian market. In fact, they're already doing that and it seems to me there's not too much worry being expressed.

This morning I came out in favour of exercising some prudence concerning allegations according to which there is no link between the property itself and the content being offered. In a democracy such as ours, in my opinion, we can make the proper distinctions when, as is frequently the case, indignant noises are being made about an owner telling an editorialist what the content of the editorial should be. Events have shown us that we are not free from that kind of thing, but one must admit that it's relatively infrequent.

You can have more general parallel influences, for example, when the owners interfere even if it's only to determine the kind of content that will be offered. Let's take the example of Mr. Crevier from La Presse. It would not be true to say that La Presse has undergone no change at all since Mr. Crevier took over the reigns. I for one think that it's an improvement. So here we have a manager representing the owner making certain decisions about the contents.

Now, if you can have no influence over the content, even if only to increase possible profits and attract more shareholders, why would you even look at those businesses or even try to do business through them?

That said, Ms. Gagnon, I certainly wouldn't question the fact that media in private hands do follow a commercial logic. In my opinion, it's quite in the order of things that investors try to make a profit from their investment and make a reasonable profit at that. That is a quite praise-worthy initiative that creates jobs.

The question is whether it's enough to ensure that objectives are attained which are not of an economic, cultural and educational order. To that I answer that we should be prudent and give it a lot of thought before throwing out a policy that, to date, has served us relatively well.

À (1040)

[English]

The Chair: Mr. Harvard, followed by Mr. Bonwick.

Mr. John Harvard (Charleswood —St. James—Assiniboia, Lib.): Thank you, Mr. Chairman.

Mr. Butler, I also found your comments to be interesting and somewhat revelatory, and I'm wondering whether or not I can, through a question, make a connection between you and Mr. Morin.

Mr. Morin was talking about this rather impoverished editorial service in the rural areas of Quebec, and I suspect it's not a hell of a lot different in southern Ontario or western Canada. Perhaps I can ask either of you or both of you whether or not there is a direct connection when local advertisers or regional advertisers—as you are suggesting, Mr. Butler—are shut out from television. You didn't mention radio. Is that related to what Mr. Morin was talking about, that being poor editorial service, poor news service? I'm just wondering.

Who wants to answer that?

Mr. Dean Butler: From my perspective, I really don't think so. Editorial obviously comes from the ability to invest in the paper. Maybe there is an economic connection, but with the way in which the television rules are structured, it would seem that the economic connection is benefiting regional newspapers, to the benefit of CanWest in that respect. But from an editorial point of view, I really wouldn't be able to speak.

Mr. John Harvard: Mr. Morin, you were more or less referring to local radio and television, weren't you?

[Translation]

Mr. Michel Morin: Yes, local TV and local radio. We are going through it because we are in a tertiary market. For the major TV networks, we are served by a secondary market. Recently, somebody decided to eliminate the positions of two directors at a TV station because they wanted to make more room for national publicity. What allowed that network to come to our neck of the woods for a bit of coverage when everything is going extremely well or when everything is going extremely wrong was the fact that the advertisers could advertise over that network in Sherbrooke. However, when the two advertising producer positions were abolished and the door opened to national advertising, then nobody has to come over and see us to ensure any kind of coverage.

So there is a direct link between the two that means that fewer of our regional advertisers can have access to a broader regional market.

[English]

Mr. John Harvard: Mr. Butler, are you suggesting that we should consider some kind of a regulation that would leave room for some regional or local advertising on television or radio?

Mr. Dean Butler: Regulation is always a slippery slope.

Mr. John Harvard: But if the marketplace is not doing it for you, what alternative do we have?

Mr. Dean Butler: In certain respects, up until the CRTC's decisions 457, 458, and 459, there was a provision for regional advertising on television. Those decisions effectively removed that.

Mr. John Harvard: Does anyone know why they were removed, or was it just a way of enhancing one's revenues?

Mr. Dean Butler: The decisions with respect to the CRTC were quite complicated. I'm really only speaking about the effect of the decisions.

There was a gentlemen's agreement within the TV stations to reserve a portion of their inventory for regional-only advertisers. Some advertisers could buy all of British Columbia or, if they wished, they could buy individual markets, but certain advertisers were restricted from that ability. Decisions 457, 458, and 459 attempted to level that playing field and not provide that kind of interest.

Personally, I thought it was a system that worked very well. If it's not working now, then you either go back and look at it or you move in the other direction and remove regulation altogether. That would require the ability to get regional access to cable signals to level the playing field in terms of cost and access to audiences that we're being removed from.

It's a complicated question. I would support reserving inventory for regional interests in the short term. But in the long term, I think the real answer is deregulation of it altogether, so that there is no restriction on who could buy what, when, and where. If you wanted to buy it for British Columbia, you could. If you wanted to buy it for maybe Joe Market, you could. But once you've done that, you shouldn't be pre-empted by anybody else. Obviously, that doesn't work in the case of the broadcasters, because they want complete control of their inventory.

À (1045)

Mr. John Harvard: Can I just ask one more question? How much time do I have?

The Chair: We'll come back to you.

Mr. Bonwick.

Mr. Paul Bonwick (Simcoe—Grey, Lib.): First of all, I would start with a statement made by Mr. Tremblay. In his remarks, he set out a tone that you're either on one side or the other.

I tried to write down your quote. It was that you're either in favour of a free market and globalization or you're in favour of regulation and legislation for protection. I disagree with that statement to a certain extent, because I do consider myself to be a proponent of free-market access for our country. In most sectors, I think our people can compete with any in the world, but I'm talking about cars, I'm talking about glasses, and I'm talking about computers. I'm not talking about culture. Therein lies perhaps where Mr. Abbott and I are diametrically opposed with respect to....

Some would suggest that our broadcast system, which is both the carrier and creator of much of what we are—much of our Canadian culture, our stories—should be treated like other industries, whether we're talking about logging, manufacturing of cars, wheat, or whatever the case may be. In turn, you create a structure that would be similar and eliminate a lot of the subsidies as well. I would argue that fact.

I'm reminded, Mr. Chair, that about a year and a half ago, we had a presenter who talked about one of Winston Churchill's famous quotes. In 1939, when he presented his war measures budget, he cut 80% to 90% from many departments and eliminated the funding for some departments, but he didn't touch culture or heritage by a penny. When he was asked by one of the members in the House of Commons why he didn't cut heritage when he did it to everything else, he responded along the lines of, “If not for our identity, if not for our culture, why else do we fight?” I think there's a statement there that governments need to provide support for culture and heritage, and that's why the industry committee is not dealing with this topic but the heritage committee is.

I'm wondering if anyone on the panel has access to or is familiar with any survey that has been done in the country, measuring the level of satisfaction that Canadians presently have with our broadcasting system. I noticed that the professor, for example, had mentioned about his study over the period of a year. Do you have any information to share with us about the level of satisfaction or confidence Canadians have with our broadcast system?

[Translation]

The Chair: Mr. Roger.

Mr. Pierre Roger (General secretary, «La Fédération nationale des communications»): To answer the member's question, I would like to refer to the CRTC's annual report that you probably have already seen and which gives us a picture of the situation as it exists since the last changes made to the legislation on broadcasting.

It has to do with sectors like radio, television and the Internet about which data are published once a year. There is a lot of information about, amongst other things, the ratings and financial state of the industry. Through this report, we can also see how widespread television is and radio and how Canadians listen to radio and watch TV and in what proportion they watch either their national television station or private stations. I think this is the best tool we have right now.

[English]

The Chair: Does anybody else want to comment? No?

Ms. Lill.

Ms. Wendy Lill (Dartmouth, NDP): Thank you.

I apologize for being late. I didn't hear everybody's comments, but I will read the transcripts and enjoy them immensely, I'm sure. I did hear Mr. Boin, and I want to pick up on a couple of things he said.

As a committee, we have heard a great deal across the country on the concerns about cross-media ownership, and we've heard about the impact it has had on local programming and about the disappearance of local stations because of it. We've heard a great deal about the impacts that the deep cuts on the CBC have had on local programming and the creation of Canadian programming.

You made the point that nowhere in the Broadcasting Act is it stated that bigger is better in order to compete on the international scene, nor is there anything in the Broadcasting Act saying the benefit of cross-media ownership is advancing the public interest. We know that.

I'm concerned when we seem to be focusing more and more on the CRTC, the regulator, as the problem. I have to say we have to be careful there, because there are many parts to the problem if we see cross-media ownership as a problem. As you know, there have been some very heavy-duty commissions, like the Kent royal commission and the Davey commission. There have been many calls for media concentration legislation to happen, but it hasn't. The government, the people who are supposedly in charge of legislation, have not brought that about.

On the decision by the CRTC to give the seven-year licences to BCE and CanWest Global, there was an appeal process, and I actually went to the Privy Council and asked for cabinet to overturn that decision. They have the ability to do that, but they chose not to. The cabinet chose not to change the direction of media concentration in this country.

I think these are important things to keep in mind. We have the oversight from our government, which has not been taking the reins, has not been showing leadership on media concentration. I'd like comments on that. It would be useful to get on record how you feel about that. Why is it that you do not believe the recommendations from the Kent commission have been implemented, given the environment that we're now in? How can we turn this around?

À (1050)

Mr. Paul Boin: In many respects, the media in modern society have become the public sphere. It's not the town hall meeting or talking with your neighbours about issues to get things flowing and cause them to become a political agenda. The mainstream media have a tremendous influence in shaping what's in the hearts and minds of a democratic polity. In that sense, when it comes to media concentration issues, they're remiss in their coverage.

The media are often criticized in terms of coverage of certain events. I would submit that they're the worst at covering issues such as this review. We've heard much about the Romanow report and the Walkerton Inquiry not just in the news section, where the media cover it as a consumer industry issue, but on the front page of the news section, where it's covered as an issue vital for democracy and citizens. However, it hasn't translated into political will and into political action, and that's a big part of the problem. The media do not cover it as such.

Even last week and the week before, we saw the media reporting on the need to remove foreign ownership restrictions, but when Friends of Canadian Broadcasting or other panellists such as the panellists today present their views, they're not even in the business section. That's a problem.

In terms of a potential solution, there needs to be a new initiative to allow for new players in the media, players with different operating principles. Again, as for-profit media corporations, their primary focus is to maximize profit. At the CBC, the primary focus is to serve citizens. Non-profit entities would be a nice addition to the democratic public sphere. If we can, we should somehow nurture non-profit media organizations that would add to and perhaps level out the playing field of the marketplace or the sphere of ideas. We should also be protecting and nurturing smaller independent media, smaller players. Their focus might still be to make a profit, but it's not profit maximization like it is for these big mega media corporations. So those are some potential things that could be addressed.

À (1055)

The Chair: Ms. Williams

Mrs. Megan Williams: Thank you.

I want to commend Mr. Tremblay for his approach: doing a very careful analysis of what is going on, moving slowly forward, and making sure things aren't crashing around us as this convergence goes ahead. I think we need to pull lessons from other areas, as well as from broadcasting.

I really commend this committee for the work that it has done in studying convergence in not only broadcasting, but publishing, and for its incentive in going around the country to listen to people in different parts of the country last year, during the broadcasting hearings. I think it's very important for people to listen to the voices that are coming from all over this huge country.

For me, in trying to unravel the complexity of the convergence in broadcasting, I like to look at maybe a simpler scenario that is unravelling in the publishing industry. Either Mr. Tremblay or Mr. Boin referred to the way in which the media companies are bulking up in order to make themselves more attractive to foreign purchasers. What we are seeing in the book-selling industry in Canada is an impending crash of Chapters-Indigo. When that comes, it will engender a desire for us to loosen the foreign ownership regulations, so that Barnes & Noble or Borders can buy Chapters-Indigo and save the bookselling industry in Canada, and hence the publishers and writers. It's important to look at all these things as part of this big puzzle that is going on.

As for your question about how we can engender political will across parties and amongst all MPs, that's a question for which I don't have an answer. I encourage you to keep listening and to keep promoting the contributions of NGOs and individuals like ourselves to this process, and to make sure they all have the means to participate.

The Chair: We'll complete this round of questions with Madame Frulla.

[Translation]

Ms. Liza Frulla (Verdun—Saint-Henri—Saint-Paul—Pointe Saint-Charles, Lib.): Thank you very much for your presentation. I am sorry that Mr. Abbott left because he is probably the one we have to convince while most members are extremely favourable to what you are saying.

I for one have no questions on the content because during the last 10 years I was questioning myself about everything you are saying publicly. I have the same concerns because I went through what you have gone through and I have come to the same conclusions which, in terms of information amongst other things are distressing especially on a regional basis. I remember when Radio-Canada shut down its regional stations in 1990 and I also remember Radio-Québec doing the same. The result is that we now have extremely efficient community radio, was hard to achieve, or again, as you were saying, Mr. Morin, with regional coverage that is a real shame because people are informed about what is happening in our major cities but have almost no idea of what is going on in their own community.

I would like to get back to the role of the CRTC. Do you believe the CRTC has abandoned its role in the area of cultural diversity? When I was with Telemedia, radios had a licence but it depended on their format. Things went very quickly during these last 10 years. When I was director general at CKAC, we were talking about the network, the profitability of the network, but nothing was being said about conversions. During these last 10 years, everything has opened up at a really crazy pace. I also remember that at the time, the CRTC gave out licences based on content. Now, we have radio stations all broadcasting just about the same things, it all comes down to the same. On the television side, you have all kinds of channels but except for a few exceptions they are all showing the same stuff.

To get back to my question, has the CRTC abandoned its role, in your opinion, in the area of cultural diversity to throw a longer look on this fear that our industry might be lacking in competitivity? In other words, is it coming down more in favour of the industry rather than concentrating on one of its terms of reference, which is to protect Canadian cultural sovereignty? That is one thing.

The second thing is that we have advanced pretty far, especially in Quebec. I will talk about Quebec because I know it well. Ownership is 98% in the hands of Quebecor or Gesca. I find Quebecor more worrying still because it is totally integrated. What with the acquisition of Télémédia radio, it dominates the market from A to Z. That is where we are at now. That is the situation. Could you tell us if you have thought about what might be a solution to the problem or at least some elements of a solution?

Á (1100)

The Chair: Mr. Morin.

Mr. Michel Morin: I think the CRTC is perhaps lacking a more regional view of the whole thing. As I was saying before, tomorrow morning I can go open a restaurant, fill out my papers, make sure I conform to the requirements and I will not have any problems. But because I am opening a workers' coop and we are dealing with information, I cannot go and get any funding. I have to go and get my funding through sponsorship and for that, I have to hop on to the same playing field as non profit organizations like the Maison des femmes and all those organizations that have to organize activities to get funding whereas what I am doing is dealing in information.

It is not enough to say that because we are operating on a regional basis, that we have two radio stations and two weeklies and that Sherbrooke comes down to cover us that we are properly covered. That is not enough; you have to see what is going on.

As for the two radio stations, you have a war going on between Astral and Corus Entertainment out in Drummondville and who share the 18 to 34 year-old market. There is a whole other community which is the 40 and over. Where do they get their information, especially since one of the stations is actually a student radio station? That is where things do not work out.

As for us, we show up with a project that answers the population's needs. We are going into other spheres because we are also going through the "man bites dog" cult. When there is only one reporter for each radio station, our first reference is the Journal de Montréal and the second one is the local Quebec provincial police officer.

We are showing up as a smaller player and that leads us to what Mr. Boin was saying before. On a regional basis, we have to take back our place with local owners, with people who are going to tell us what they are doing: they are doing television and they are informing people. And I am totally ignoring the cold dome system that totally disconnects, to a certain extent, the people on a regional basis. Down home, people used to listen to us. Now, they are getting Newfoundland news bulletins. That goes for the first part of your question.

Maybe I will be able to answer Ms. Lill's question at the same time, the one about regulations. I do not think we should add even more regulations to a market that is already extremely regulated, but it might be relevant to lighten the burden to allow smaller regional players to get in to the market. That is where you will have regulations taking in.

For example, in the organic products business small producers are quietly starting to take over a share of the market, but all of a sudden the big players want to get into organics too.

The Chair: Any other brief interventions?

Ms. Larouche, please.

Mrs. Chantal Larouche: I don't know if I'd go far as to say that the CRTC has abdicated its responsibilities, but there's one thing you can be sure of: the CRTC perhaps didn't take its time to measure the impact of all the evolution going on because it stuck with managing, on a regular basis, applications for licences, transactions and other things, which means that at any given point you find results in the decisions that are a little incongruous.

For example, we found it quite dramatic to see that Astral Media wanted to buy the Télémédia network. The CRTC acquiesced to that transaction which, for many players, only increased concentration and limited access to independent local and regional services. Well, it's the Competition Bureau that finally allowed regional and local populations to have access to a media different from the Astral Media network. Somewhere in there, there are things the CRTC didn't measure. The regional and local populations were saying that that transaction would kill the advertising market and could thus have an impact on the independent media. They were also saying that by having only Astral in some of the regions, there'd only be one way left to look at radio content. They said that should be prevented. Well, the CRTC said yes and the Competition Bureau said no.

You should be worried when you have to turn to the Competition Bureau to protect the public interest. You should be very worried. On that note, I would tend to say—and these are often the debates that the industry has internally—that the CRTC should perhaps stop for a while and make use of the work that is ongoing, especially in your committee, to think about the whole thing and see how, after a national consensus has been reached, it should apply its regulations and the measures that already exist. There are regulations that already exist. A lot of regulations have been thrown out with the bath water but there are others that are still there and that are managed on a piecemeal basis without any great depth of thought that might deserve to be refreshed.

Á (1105)

[English]

The Chair: Ms. Bulte.

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Thank you very much, Mr. Chairman.

Thank you, all, for coming. You've raised many issues here today.

I want to raise a number of points. I want to go back to Mr. Boin and his point about the regulatory vacuum between the CRTC and the Competition Bureau. I was going to use the Astral–Telemedia example, because what you have raised is the decision about who is ultimately responsible. It is not settled. As you well know, Astral Media settled with the Competition Bureau, so that's an issue that still has to be decided.

Who will decide if it's in the public interest when it comes to broadcasting, to radio and television? I think there is a vacuum right now that this committee could indeed fill. As opposed to waiting for the courts to determine it, let Parliament rule on it.

I would like some direction as to where you think we should be going and what we could do to perhaps change again what the CRTC is responsible for. The only reason the Competition Bureau jumped in...it was a very rare thing, and it was a challenge about who was the most powerful. It really had nothing to do with the public interest. It was who was ultimately going to be the most powerful one, so call that what it is. I'd like your comments on that.

Madame Larouche, I also want to pick up on what you said. I think this is very important. I, too, share Madame Frulla's comments—and it's too bad Mr. Abbott isn't here. To reiterate it time and time again, the United States has much stricter rules than we do. Ian Morrison, from the Friends of Canadian Broadcasting, brought up the new communications bill on the convergence side. That is being outlawed in the U.K., even though foreign ownership isn't. I don't think you'll find that anybody at this table right now believes in greater foreign ownership. I think that's an important thing that we need to say over and over again.

Again, Madame Larouche, you've pointed out how important it is to view cultural goods and services as distinct from regular goods and services. I think this is something we need to bring back to the Americans again and again when they want us to open up that area. But you've also raised a point of concern that I now have too. With the new GATS negotiations that are going to be coming open, if we open up telecommunications, cable is a carrier under the Telecommunications Act. What is that going to do at the WTO? Perhaps the industry committee should be saying, “Wait a minute. If we open it there”—as Michael MacMillan from Alliance Atlantis said this week—“we're just not being true to ourselves. If we open it there, we'll have to open it later for cable and for broadcasting, because it will just be fair to do so.” Please help us in terms of how we can bring this message forward.

I also urge you to go before the industry committee, especially as the GATS negotiations will be opened in March.

The Chair: Mr. Boin, followed by Madame Larouche.

Mr. Paul Boin: I think this committee has a wonderful opportunity to take a broad, focused view, and a holistic view, not only in terms of the various media—newsprint, for example, and broadcasting—but also in a larger context in the sense of how culture relates to other issues presently being negotiated at GATS or the FTAA. For example, first of all, there needs to be a uniformity initiative amongst government ministries. The heritage department is promoting this cultural diversity initiative. At the same time, the ministry of trade has other prerogatives preoccupying those discussions. Also, Minister Rock is looking at a foreign review of telecommunications as well. So there needs to be some kind of cohesiveness among cabinet ministers, with policy then flowing from that.

On another, broader level, the argument for cultural diversity, for example, is put forth in that the cultural sphere is not simply a commodity. It's much more than that. It's democracy enabling, it's the stuff of life, right? As such, it's just not subject to a dollar value. But with that argument being put out there for culture, what about the right of, say, France to regulate public health by not wanting to allow hormone-treated beef products to come into its geographic area? What about when it comes to education? Again, it's a broader context. If culture is out there alone and is not aligning itself with education and public health in terms of being validated as things that are more than just commodities, culture protection incentives to improve our cultural life will be for naught. There needs to be a uniformity in linking with those other issues at the broader level, in that this stuff of life isn't just a commodity.

Á (1110)

[Translation]

The Chair: Ms. Larouche.

Mrs. Chantal Larouche: Actually, I don't have much to add to what the member has already said but I think that both before your committee and before the CRTC we should all agree to say, once and for all, that what the media produce are a public service and not some kind of commodity. In our opinion, that's where the problem lies. As long as we considered that because the media are private property, they have no obligation towards the public and are under no obligation because of the fact they have to render a public service, then we'll be going down the wrong track. Some say that for radio broadcasting the matter is clear because it's a matter of using the airwaves and thus it's a public service. But we think that the whole matter of service to the public should eventually extend to the matter of information in general, including the written media, as what we are seeing more and more is cross-media ownership between broadcasting and print. We think that we should give way more thought to this idea of service to the public and obligation, since the right to be informed is a fundamental right recognized by the charters.

So we think that both the federal government and the provinces and the organizations who manage matters of communication, in our opinion, will all have to seriously broaden our way of thinking to include this idea of service to the public which seems to have been rather left aside during the last few years.

Mr. Gaëtan Tremblay: I would like to add something. I had prepared to talk about foreign ownership, but I believe the two issues, cross ownership and foreign ownership, are intimately linked. Perhaps one of the problems is that over the last few years, people have taken a simplistic approach to an extremely complex issue, namely cultural policy. Any policy is complex, but cultural policy perhaps even more so. From the moment Canada adopted a convergence policy, you got the impression that it was based on a single objective or that a single objective played a key role in every transaction: to create national economic players big enough to compete abroad, that is, both domestically and abroad.

I think we should keep that objective in mind. But I would perhaps like to add a different point of view to what you said, madam Larouche. Information and culture are not only goods to be traded, but, nevertheless, they remain goods in our society. A balanced cultural policy must bear these two objectives in mind if we are to preserve the diversity of basic sources of information in our democracy and if we also want to create companies profitable enough and big enough to be competitive.

The reason I am saying these two aspect are related is because I was at some meetings with Americans in the United States. When we bring up the argument of cultural diversity and the diversity of information sources, they easily counter-argue by saying that people in glass houses should not throw stones. Where is our media diversity? How many media groups control the market in any given area in Canada?

When you compare the diversity of groups covering most of Canada's territory and in many American markets, it becomes obvious that our market is more concentrated than theirs. So when we tell them that we need to create new regulations to maintain diversity, we are making fools of ourselves, if I can put it that way. That's because our policy on cross-media ownership is not as strict as the American one.

I don't have the answers to all of the questions, nor do I have all the solutions, but it seems clear to me that in the future any decision taken will have to take into account not only this famous notion of convergence, but also the fact that we need to preserve diversity, not only in each market, but also in every riding, since that space is not only a market, but also a forum for public debate.

Á (1115)

The Chair: So you're talking about convergence and concentration.

Mr. Gaëtan Tremblay: Convergence does not necessarily mean concentration, but in economic terms, convergence and concentration converge.

The Chair: In other words, you can't have one without the other.

Mr. Gaëtan Tremblay: You can't have one without the other and you can't consider the issue of foreign ownership without also considering cross-ownership rules and ownership concentration in our own media.

The Chair: That means we have a lot of work ahead of us, right? Many questions will be asked.

Ms. Gagnon.

Ms. Christiane Gagnon: I would like to ask a question about the future. Do you think that the market will determine the faith of the large corporations in the field of communications and media? Will we see new corporate restructuring, given the fiasco of the financial model that had been adapted to communications? There was a conference in Montreal the theme of which was “Convergence: from outrageous promises to dashed hopes”, and some observers said that the market would straighten the situation out, that we were going to see new restructuring and new foundations. The future is not as dark as some may think, they were saying. Given that we have not had as much success as anticipated and that instead there have been fiascos, companies are having more and more trouble making a profit—look at Vidéotron—and we are seeing something else. The wave in 2003 could be very different from what we have seen in the past.

Do you think that these people who are a little bit more hopeful are realistic? Do you share that opinion?

Mr. Michel Morin: I can start by saying that I hope so. The committee is perhaps laying the first brick. Based on the comments you would have heard, you will make recommendations, and the rest remain to be seen.

I think that some changes will have to be made, because we cannot leave communities at the mercy of large corporations. They come in and lay down the law, and we do not have a say. And if we do not agree, we are shown the door, it is as simple as that. It makes no sense. So in order to protect Canadian culture, they must absolutely be some changes made. I think the work of this committee is already a good start. Now, the CRTC must be more attentive. It is time for the CRTC to look at what is happening in each region and to act accordingly.

[English]

The Chair: Did anyone want to add anything?

Monsieur Roger and Ms. Williams.

[Translation]

M. Pierre Roger: As Mr. Tremblay said earlier, it seems that the major trends toward concentration that we have seen, it be at Vivendi Universel, in Europe, or at AOL Time Warner, in the United States, seem to be resolving themselves from within. People want to go back to what they call their main business plans, their core business, which was different originally. This trend is perhaps not as visible at Vidéotron, but it is at Bell Globemedia at present.

At the last meeting of shareholders, Bell announced that it planned to divest itself of its television content assets. It did not want to hold a fire sale but it wanted to focus on its core business, which it considers telephony and the Internet. That is what Bell announced officially.

Now, as for Vidéotron, the set-up is perhaps not working financially, but they seem to be holding on to it. We will see where that goes.

Á (1120)

[English]

The Chair: Ms. Williams.

Mrs. Megan Williams: I'll let Ms. Larouche go ahead. I think her comment is probably closer to the previous one.

[Translation]

Mrs. Chantal Larouche: Ms. Gagnon, I am inclined to tell you that it is true that some people agree that market forces will perhaps realign certain aspects of the industry, but that is what worries some. Even industry stakeholders, whether they are creators, the government or citizens, constantly rely on market forces to define the rules for an industry that is as important as communications in developing national cultural identity.

We feel that some may be optimistic with respect to market forces, but for us, what is more important is for government to take up their responsibilities with respect to the communications industry, which has a fundamental role to play in our societies. We can use market forces as a source of inspiration and education, but we feel that, without getting unduly involved in developing the communications sector, we do need to maintain some rules to protect the base, and at the same time enable the industry to develop, flourish, and show initiative.

[English]

Mrs. Megan Williams: For me, this conversation reinforces the notion of a unified cultural policy, within which the intrinsic value of culture is recognized, and which gives a framework for all these competing interests that you were talking about, Ms. Bulte—the Competition Bureau versus the CRTC. How do you reign in those interests and make sure they're acting in concert? It's if they're acting within a framework of a unified cultural policy.

You were talking about the international treaties, trade agreements, and so on, and I know that on Thursday you're going to be hearing from a group of players who are going to be talking in detail about the treaties and about the NGOs that are working in that context. I'm sure they will have some direction for you.

But I just want to say that we recently held a meeting in Cape Town. We had NGOs there from all over the world, although mostly from the developing countries. We listened to those people talk about the lack of a diversity of media in their countries and about the difficulties they have speaking democratically from the basis of being informed citizens because of that lack of diversity of media in those countries. It was actually heartrending to listen to. Therefore, we also have to learn from the experiences in developing countries and make sure we don't venture down the path that they have taken.

The Chair: Mr. Harvard.

Mr. John Harvard: I have just one question, perhaps for Mr. Boin or anyone else.

The current popular media model that we know in Canada is pretty well driven by business imperatives, business values, and the profit motive, and does not always coincide with the broad public interest. If we are unhappy—as I think most of us are—with the kind of consolidation, concentration, and convergence that we have in the country, we have to ask ourselves what we can do.

Is it really silly on our part? Is it unrealistic to even think of something like rollbacks or breaking up these empires? If we, as a government, as a country, had responded positively to Davey thirty years ago or Kent twenty years ago, maybe we wouldn't have the challenge we're facing today. But governments of the day didn't respond, so we now have the model the way it stands.

Would it be realistic for us, or is it just off the wall to consider breaking up the company that owns CTV or CanWest or Rogers? Is that just off the radar screen? Do we have to consider something else?

Á (1125)

Mr. Paul Boin: In that regard, I think a great place to start would be to have a type of moratorium, if you will, on further media consolidation and concentration, as Madame Larouche mentioned.

Mr. John Harvard: A freeze.

Mr. Paul Boin: In different sectors, yes, but it depends on what the concentration level is in a particular area. Where it seems problematic and to be endangering a true diversity of voices, then, yes, I agree that it should be frozen. In many ways, it's in the best interests of some of our media companies, which are becoming mega media companies. Through this pursuit of acquisitiveness, they've leveraged themselves and are running into trouble, as Quebecor is doing right now.

Many of our laws, such as the First Amendment in the U.S., the Charter of Rights and Freedoms here, or article 19 of the Universal Declaration of Human Rights, were written in such a way as to protect freedom of speech from government censorship. But with the rise of the modern corporation, the media companies have become the most dominant social institutions in our society. To not take steps to shift our policies, and possibly our laws in that regard, would be irresponsible. Simply leaving a vacuum there allows for the powerful to overtake—

Mr. John Harvard: Does any country have a model that we might aspire to? Do you know of any country that we think might have it pretty well right or near right?

Mr. Paul Boin: There are countries that have some promising policies. For example, in Sweden, a certain percentage of revenue from the mega media corporations goes back to funding new, independent, emerging voices. But internationally, we're all struggling with this corporate version of globalization that drowns out diversity, homogenizes, and puts the privatization and deregulation ethic on us all.

This is not an anti-business argument, this is a pro-responsible-business market. If there was truly competition, some of the concerns addressed by the smaller advertising and media players here today would be addressed. But far from being a free market, it's more like cartel-like behaviour when you allow these companies to own so much of our media properties. Again, the best way to save freedom-of-speech values is to keep the companies small in terms of ownership.

The Chair: Ms. Williams.

Mrs. Megan Williams: I just have a quick point to make, and it goes back to what Ms. Lill said earlier about trying to ensure that the CRTC does enforce its own regulations. They precipitously renewed the licences for seven years for the two biggest broadcasters and weren't held accountable for that. I think it's perhaps unrealistic to think about dismantling the big broadcasters, but reining them in according to the regulations that already exist is reasonable.

The Chair: You wanted to add something, Mr. Butler.

Mr. Dean Butler: Just to add to Mr. Boin's comments from my perspective, the biggest thing in the last ten years has been that the concentration-of-ownership issue has lessened competition in Canada. As a result, we're into an oligarchy state or in certain cases a monopoly state, and that is not in the business interest or the public interest. In terms of further concentration of ownership, I think that's certainly something we ought to look at.

Cross-media ownership becomes very dangerous. If you look at radio, there's enough competition. If you look at television across the board, maybe there's enough competition. Newspapers are an area of grave concern because of the heavy weighting in two areas. But what we're running into is less competition. With less competition, we're less efficient and less effective in meeting the needs of the economy.

The Chair: Monsieur Tremblay—and we'll close this question with you.

Á (1130)

[Translation]

Mr. Gaëtan Tremblay: We talked about the role of the CRTC. I'd also like to express a wish about the government apparatus as a whole.

I am far from being convinced that it was a good initiative to separate the industrial and the cultural side in the federal administration. On the one hand, we have matters relating to culture in a small department—small not because of its mandate but because of its financial resources—, and then there is the economic side in a big department, the Department of Industry. I think that it is disproportionate and it prevents us from taking into account elements that cannot be dissociated in contemporary society. Culture is also business. When the Industry department takes decisions based on purely economic criteria and they happen to go against other purely cultural criteria, then this prevents the development of a consistent policy.

The Chair: It is perfectly logical. It is a kind of logic that cannot be debated. On one hand, there is the claim that culture must be protected and on the other hand, it is described as a business.

[English]

Just before we finish, I want to pick up on what Mr. Butler said. Last week, we had witnesses who recommended that we split the print media from the broadcast media, and they were very vocal about it. Today, we heard from you that we have to protect the regional and local entities from being submerged in this big concentration and convergence program. Today, we also heard about getting the CRTC back on track to enforce its own regulations in regard to protection of cultural interests.

Because you referred to it today, could you comment on how you see recommendations that were made to us about splitting the print media from the broadcast media? How do you see protection of the regional and local interests? Are you saying to leave this to the CRTC to enforce it properly, or do you want to go back in time to do something more to reverse the trend?

Mr. Dean Butler: I think the CRTC has done everything in its power, relative to the things it is looking at in terms of protecting culture. Perhaps one perspective the CRTC could review for further benefit is the economic impact of its decisions. That has been addressed here as well.

The biggest aspect of the cross-ownership issue is what they choose to do with it. From my perspective, CanWest would choose to close down television stations in small-market British Columbia and only use them as repeaters to carry national advertising signals, forcing local advertisers into their newspapers. I think that's a bad formula.

If those two need to be separated, I don't know how far you have to go with that. I was asked that by some gentlemen who visited me from the Competition Bureau a number of years ago. My comment on that was to not let them operate as one company. If they operate as independent companies and maintain their competitiveness within their respective industries—that being print or being television—I don't think we'd have a problem with it. But when they exercise their control beyond their individual powers and start exercising across industry, that's when I start getting very nervous.

The Chair: Does anybody else want to comment before we close?

Monsieur Morin.

[Translation]

Mr. Michel Morin: I would call upon the CRTC to be much more sensitive to smaller markets so that we don't have to appear before the CRTC with a whole group of lawyers and communications specialists. I'd like us to be able to come up with a simple project, such as the one we have, which could be studied by the CRTC without necessarily having to ask Trans-continental, Corus or Astral if we can enter the market to engage in advertising. I'd like to see the CRTC simply analyze what is taking place in the field and grant us a licence based on that.

I have already applied for a very specific news licence and I was turned down. So what I am asking for is a much greater willingness to listen and to analyze the projects that may be put forward.

Á (1135)

The Chair: Ms. Larouche.

Mrs. Chantal Larouche: As we mentioned in our statement, there are certain transactions relating to cross media ownership and joint ownership that were accepted. As far as the Fédération national des communications is concerned, this is a problem that should not exist. We are talking about large media groups like Quebecor. Power could do the same thing. We continue to believe that the press and television have an extremely wide influence and that an impervious wall should have been maintained between these two media, when unfortunately it has been considerably undermined over the past several years.

The Chair: Thank you very much for appearing here today. I think it has been very instructive for every one.

[English]

We appreciate it very much.

We won't close the meeting, because members have agreed to meet informally to consider future business of the committee. It will be informal business, because we won't have a quorum.

Thank you very much. We will continue in camera for the rest of the meeting.

[Proceedings continue in camera]