HERI Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 29, 2001

• 0905

[English]

The Chair (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): Good morning. I'd like to declare open this meeting of the Standing Committee on Canadian Heritage, which is continuing its study on the state of the Canadian broadcasting system.

In the first hour we'll hear from Friends of Canadian Broadcasting and the Toronto Arts Council. The rest of the time will be devoted to the National Film Board, Telefilm Canada, the Canadian Audiovisual Certification Office, and the CRTC.

For now we'll hear from the Friends of Canadian Broadcasting, represented by Mrs. Noreen Golfman,

[Translation]

Chair, Steering Committee,

[English]

and Mr. Ian Morrison, the spokesperson.

Ms. Golfman or Mr. Morrison, the floor is yours. When the Toronto Arts Council comes in, you will split the time of your presentations, hopefully not more than fifteen or twenty minutes each, so that we can allow for questioning by the members.

Mr. Ian Morrison (Spokesperson, Friends of Canadian Broadcasting): Mr. Chair, before Professor Golfman begins, we will not take more than ten minutes of your time with the presentation—

The Chair: Well, that's great.

Mr. Ian Morrison: —and she will begin.

The Chair: Thank you.

Ms. Noreen Golfman (Chair, Steering Committee, Friends of Canadian Broadcasting): Thank you, Mr. Chair.

Mr. Chair and members of the committee, thank you for inviting Friends of Canadian Broadcasting to join us in this discussion. My name is Noreen Golfman, and I chair Friends' steering committee. In my spare time I teach English literature and film studies at Memorial University of Newfoundland. At my side is Ian Morrison, our spokesperson.

Let be begin by telling you that we view your work as very important.

[Translation]

The tenth anniversary of the proclamation of the Broadcasting Act is an appropriate occasion for parliamentarians to examine how Canada's audio-visual system is serving viewers' and listeners' needs.

[English]

Friends shares your concern for the viability of the whole audiovisual system. In an electronic age, it functions as our country's central nervous system. Its health, therefore, mirrors the country's health. Few subjects are more important.

As you may know, Friends of Canadian Broadcasting is a voluntary association supported by more than 80,000 Canadians. Our mission is to defend and enhance the quality and quantity of Canadian programming in the English language audiovisual system. In that respect, we reflect a good part of your mandate.

Friends has submitted a 35-page brief and two research reports as an initial contribution to your work. We know from our supporters that there is a large appetite across the country to meet with your committee. We encourage you in your plans to travel beyond the confines of Ottawa, and we are certain that when you come to towns and cities throughout the land, you will hear from viewers and listeners who want to contribute ideas to further your work. So in the next few moments we would like to draw to your attention some concerns that arise from our analysis of the research we commissioned earlier this year and appended to our brief.

Ian.

Mr. Ian Morrison: Thanks, Noreen.

Members of the committee, Mr. Chair, I'd like to refer to a handout we have just distributed. On the second page, which is labelled “slide one”, you will see a chart that describes the English language TV system during the Bureau of Broadcast Measurement sweeps of February-March 2000 right here in Ottawa. Those sweeps, as you probably know, measure the highest viewing weeks of the whole year, the end of February-March, when it's snowing, as it is today. Attached at the end of our bound brief, this larger document, are similar charts covering St. John's, Halifax, Montreal, Toronto, Winnipeg, Regina, Calgary, Edmonton, Vancouver, and not just for last year, but also for 1990, a decade earlier, so that you can compare them. Friends prepared them specially for your committee.

• 0910

These charts map all the programs offered by over-the-air English television from 7 to 11 p.m., that's prime time, when most of your constituents are watching TV Monday through Sunday. These are the 28 hours that account for the bulk of all television viewing. Blue is the code for local shows, red is for Canadian shows, and white is for foreign, mostly American shows. If you check with the data at the end of the bound brief, you'll see that the Ottawa charts are broadly representative of the nine other cities.

When you take a moment to look through these prime time charts, a few trends become clear. CBC television became almost entirely Canadian during this decade. Private Canadian TV remains largely American in peak viewing periods, and local and regional programs have disappeared almost entirely during prime time—that latter point, of course, Mr. Chair, is the subject of your attention next week.

If you look at what's on TV when most people are watching, you see that the private conventional networks continue to be the black sheep of the Canadian broadcasting system, offering Canadians very few opportunities to see their own stories on TV. Following the 35 pages of our opinions there's a 30-page report called “Follow the Money”, data from the broadcasting system. We prepared this for your study, and it reveals that 86% of the audience of CBC English television, which it assembles in prime time, is watching Canadian shows, 14% watching foreign shows. On CTV only 12% of the prime-time audience is watching Canadian programs, and on Global only 5%.

In “Follow the Money” Friends has assembled data from public sources, many of them witnesses here today, over the past decade, the period of the current Broadcasting Act. From slide 2 in the brief deck we passed out, taken from “Follow the Money”, you can see that federal funding of Canadian television production has tripled from $76 million to $227 million between 1994 and 2001. Please note that all the dollar figures in the “Follow the Money” study have been converted into 2001 dollars to enable decade comparisons.

As you'll note from the next slide, slide 3, also from this study, during the same seven-year period conventional over-the-air private broadcasters have decreased their investment in Canadian programs by 6%, while at the same time they have increased their non-Canadian spending by more than 50%. In fact, if this trend continues, private broadcasters' foreign spending will exceed their Canadian spending next year. This means that since 1994 tax-funded subsidies to support Canadian content have financed a buying spree in Hollywood. It's hard to imagine that this is what the present government had in mind when it authorized increased public investment to promote Canadian shows on television some years ago.

As you can see on the next slide, slide 4, while the revenues of private conventional broadcasters increased by 13% over the decade, their profits rose by a quite impressive 128%.

Friends concludes that government subsidies and support for Canadian programming have produced a vibrant and profitable private sector, but have achieved only mixed results when it comes to showcasing Canada on TV, the topic of today's discussion. We hope members of the committee will take a hard look at the performance of Canada's private conventional broadcasters and ask tough questions about the effectiveness of existing government programs in promoting the presence of Canada on television.

• 0915

On the next slide, slide 5, you will note that while the CBC remains the largest investor in Telefilm-assisted English language production, the specialty channels, as a group, have replaced the CTV network as the second largest investor, while Global Television barely figures in the data.

[Translation]

Another trend which becomes highly visible when decade-long data are charted in 2001 dollars is the change in the nature of CBC/SRC Television. Slide 6 shows that the combined advertising revenue of CBC and SRC Television in 1991 was just 28% of the corporation's parliamentary grant. Last year this commercial dependency rose to 44%.

And these statistics underestimate commercial dependency because they include radio expenditures in the denominator.

[English]

Last autumn Friends released a research report on quality in English Canadian television. It's called “It's Good and We Like It”. Earlier this year we sent a copy to each member of the committee. I'd like to conclude these brief comments by reminding you of a few findings from that research.

The 1999 Nielsen media research quality rating survey underscored that home-grown drama strikes a chord with Canadians as it fights for viewers in an increasingly competitive broadcasting landscape. Slide 7 shows that 8 of the top 23 drama series measured by the quality research survey were Canadian. Slide 8 shows that of the top 10 Canadian programs rated by Nielsen's QRS in 1999 7 were on CBC, 3 on CTV, and none on Global.

As you can see on slide 9, a complicated slide, with a few exceptions, combining quality and audience data challenges the old notion that programs that rate highly in quality attract a smaller audience. The programs in the top right quadrant have more than average audience share and higher than average quality ratings, and they're colour coded by the broadcaster.

Noreen.

Ms. Noreen Golfman: Thank you.

In our brief comments we thought it might be more useful to contribute some information on highlights from our research than to use your time to underscore the various policy positions we have advanced in our September 10 brief. That's not to say that we do not care passionately about these issues, among them the fundamental importance of part I, section 3 of the act, “Broadcasting policy for Canada”; reforming the CRTC Act; Telefilm's relationship with the Canadian Television Fund; addressing the gap between CBC's mandate and its resources; reforming appointments to the CBC, CRTC, Telefilm, and the CTF; ensuring that conventional private broadcasters contribute to the goals of the act, according to their means; restraining cable ownership of specialty channels; maintaining effective Canadian ownership and control of broadcasting licensees; restraining further concentration of broadcasting ownership; maintaining separate news gathering by television licensees from the news gathering of newspapers in which they have an interest; outlawing political contributions by broadcasters; integrating broadcast and telecom policy responsibility under one federal department; gathering and disseminating policy information on the audiovisual system.

Thank you, Mr. Chair and committee, for your attention. We will welcome dialogue now and throughout your important study.

Thank you.

The Chair: Thank you.

Before I pass on to Mr. Garrard, after which we will open the meeting to questions, I wanted to state for the record that although your brief of September 10 was translated, according to our rules here, this wasn't, and the clerk tells me that it was distributed directly. Normally, we wouldn't accept a document that's not translated, it's against our rules, but because it was mostly a graph I let it go. I know Mr. Sauvageau asked for a copy in French, which it is his right to have, and normally we would need to have this translated before distribution.

• 0920

Mr. Sauvageau.

[Translation]

Mr. Benoît Sauvageau (Repentigny, BQ): [Editor's Note: Inaudible]

The Chair: Members will ask their questions afterwards.

Mr. Benoît Sauvageau: I would like just like to say that I fully agree with the chair. As you know, the Department of Heritage and our committee have a responsibility for compliance with the Official Languages Act. You call yourself the Friends of Canadian Broadcasting. Of which Canadians are you the friends? I am looking at your slide 1. I would like to know whether you have some data on Quebec as well. To my knowledge, we are not included in the word "Canadian". I would like to say first that it was out of politeness that we allowed you to present a report that is not in accordance with the rules and standards of the Committee on Canadian Heritage, which is responsible for ensuring compliance with the Official Languages Act.

Next, I think you might want to question the name of your group, in light of the slides you presented. Thank you, and I will have some questions for you later.

[English]

The Chair: Mr. Garrard.

Mr. Jim Garrard (Executive Director, Toronto Arts Council): Good morning. My name is Jim Garrard. I'm the executive director of the Toronto Arts Council. We too are friends of the CBC. I'd like to make a few brief remarks to the committee this morning. They should take less than the 10 minutes assigned.

The Toronto Arts Council is a 27-year-old not-for-profit charitable foundation that supports the development, accessibility, and excellence of the arts in Toronto. The Toronto Arts Council delivers municipal funding at arm's length from government to more than 400 arts organizations and hundreds of individual artists. We also make a number of arts grants and awards on behalf of Toronto Arts Council Foundation and others.

The Toronto Arts Council is governed by a 29-member board of directors. Our bylaws dictate that the majority of these directors be working artists. In addition, there are 60 working artists and arts managers who serve on standing committees charged with adjudicating proposals for funding.

This structure and these processes serve to keep Toronto Arts Council fully informed concerning the state of the arts in Toronto and allow us to speak authoritatively on behalf of Toronto's artists and their organizations. Because arts practices in major Canadian cities share much in common, we believe our message to the committee has application within a national context.

To begin, the Toronto Arts Council endorses the following recommendations put forward by the Canadian Conference of the Arts: to maintain exclusion of culture from trade agreements; to maintain current foreign ownership provisions; to ensure that the CRTC implements the act; to introduce competitive renewal procedures; to fund a baseline study of diversity in news and information programming; to maintain and increase support for Canada's cultural industries, particularly for Canadian programming; and to provide the CBC with seven-year funding.

The Toronto Arts Council also supports the principles and policies laid out by the 1991 Broadcasting Act, principles and policies intended to maintain, protect, and strengthen Canadian programming. Canadian content quotas have done much to create jobs and develop an industry. Consumers have a reasonable quantity of Canadian programming to choose from.

Where we would like to see change, however, is in the quality of programming available to choose from. While section 3 of the act declares that our broadcasting system should “serve to safeguard, enrich and strengthen the cultural fabric of Canada”, to provide “a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity”, and “to reflect the circumstances and aspirations of Canadian men, women and children, including equal rights...and the multicultural and multiracial nature of Canadian society and special place of aboriginal peoples within that society”, these things have not happened.

• 0925

Canadian content, for broadcast purposes, has been measured mostly numerically. Choices have been governed primarily by industrial considerations, export markets, lowest common denominators, co-production, imitation of American program models, and so forth. While Canadian content quotas have helped build the broadcast industry, fragile as it may be, they have also, so far, done little to truly safeguard, enrich, and strengthen Canadian cultural fabric. To achieve both, we must begin to apply some qualitative measures to Canadian content.

Fortunately, we believe changing conditions have made quality of discourse an attainable goal. More than ever before artists are drawn from across Canada and around the world to our major cities, where they connect and collaborate, creating a wide range of high-quality theatre, dance, music, and related arts. Writers, performers, designers, directors, composers, conductors, curators hone their skills and refine their works. Our arts communities are incubators of talent, seen by some as research and development vehicles for the commercial arts, film ,and broadcast sectors. Certainly, in Toronto our arts sector constitutes a rich natural resource, developing and presenting thousands of arts events each year.

To a limited extent, our broadcast industry already mines this sector for content and talent, but most of that content, despite its quality and cultural relevance, appears briefly on a stage and then disappears. As one well-known Queen Street writer-director said to us recently, “It must be like the Incas, you know, throwing people off the top of monuments, right? These plays, these combos will never be seen again. So I think there's a sort of a horrible, marvellous, terrible, wonderful experience that happens going to see theatre that's for burning, basically.”

This needn't be the case. In fact, this is exactly what our broadcasting system needs at his moment in order to provide the wide range of programming that reflects Canadian attitudes, opinions, and ideas, and their values and artistic creativity, those same values envisaged by the 1991 Broadcast Act.

There is now a tremendous economy possible in translating live arts for broadcast. Cameras are more portable, requiring less elaborate lighting. Editing is faster and less costly. The works themselves have already received months, if not years, of development. They've been tested on the public. In many cases the translation from one medium to another can take place very quickly, using the same personnel, production elements, even venues. In Toronto alone there's a surfeit of fascinating material being generated in the arts sector. It's culturally and thematically diverse. Much of it is intelligent. It reflects our lives and our concerns. It tells Canadian stories.

In the old three-channel universe it was thought necessary to invest huge sums in developing single projects for broadcast. In the multi-channel universe this isn't really viable. Economics dictate lower production costs for the majority of outlets. So these new urban marriages of economy and quality, artistry and technology dictate, it seems to us, a fresh look at the live arts as a source of quality Canadian programming and choice.

• 0930

A successful run in one of our best theatres might draw an audience of 5,000. Why not investigate the economics of disseminating such works to larger audiences through broadcast? It may be that no one can get rich, but it might not cost the taxpayer any more than at present, perhaps less, to achieve many of our cherished stated goals, goals framed in legislation, but not yet supported in practice.

Toronto Arts Council recommends that qualitative measures be applied in determining Canadian content quotas and that a mechanism be established to support a partnership between live event producers in the not-for-profit sector and interested parties within Canada's broadcast system for the purpose of adapting a wide range of successful live events for broadcast.

Thank you.

The Chair: Thank you, Mr. Garrard.

I will now turn the floor over to Mr. Abbott.

Mr. Jim Abbott (Kootenay—Columbia, Canadian Alliance): Thank you, and thank you to our witnesses for coming before us.

As always, I like to start on points where we have agreement. I notice in the Friends of Canadian Broadcasting presentation, in the summary of points, they mention the reforming of appointments to the CBC, CRTC, Telefilm, and CTF. Although I would speculate that perhaps we would envision a different result at the end of that reform, nonetheless, I think the whole issue of making a reform to the way in which appointments are made in this very important area is one where we would find a lot of agreement with you.

As for maintaining separate news gathering by television licensees from news gathering of newspapers, although on paper that seems like a good idea, would you not agree that this would have the potential of putting the heritage minister or other people who understand Canada as well as she does in a position of controlling the news? In other words, how far would this go? How much control would the government have in order to be able to do that?

I'm just going to go through a pot-pourri of things you might want to respond to. I also say, perhaps with tongue in cheek, on slide 9, to suggest that my two favourite programs on television are of a lower quality, Power Play and Made in Canada—really, I don't understand how that was arrived at.

On a fully serious note, though—and I say this with the greatest respect—I need to understand the world from the point of view of both of our witnesses. When I was a very young boy, my father built a new house at the 401 and Yonge Street. This was back in 1949. I can recall in that era the excitement of seeing television antennas going up and one or two people actually having a black and white TV, where they were bringing in Buffalo or whatever it was that was coming in on the antenna. I'm aware of the way in which cable has come about, but we are so far past that. I say, with the greatest respect and the greatest kindness, it seems to me that the vision Friends of Canadian Broadcasting and the Toronto Arts Council have of television broadcasting today is one where there is a control of the medium, where we have a captive audience.

We have seen the CRTC use various levels of wisdom, in our judgment, coming forward with the idea of specialty channels, the Bravos, the Showcases, the History Channel, the Discovery Channel. We've seen those as being choices made available to Canadians, and those are good choices to be made available to Canadians. But in your comments I don't get any recognition of those choices that are now available to them on satellite or on cable. I still have a feeling that you envision—perhaps I'm wrong, and I want to be corrected—this very closed 1950, 1960, or even 1970 universe, where there could be effective control of what is available to Canadians. I wonder if you'd like to comment on that?

• 0935

The Chair: I suppose you made some notes as you were going along. Who wants to start? Mr. Garrard, do you want to start?

Mr. Jim Garrard: Perhaps I could make a start at this.

Certainly, in turning the dials in Canada, there is a lot of choice, and a lot of those choices are interesting and good, there's no doubt about that. Toronto Arts Council is interested in addressing the fact that there is in our live cultural arenas a great deal of work by Canadian artists reflecting Canadian conditions very accurately and intelligently, but we don't provide those kinds of choices in the broadcast medium. I think they are available. We think the economics of the distribution of the work of our best artists is such, in these times, that it would be possible to make those choices available to Canadian viewers and listeners. At the moment there's not a lot of access to the best work of our best artists now being brought to us in the live area, and the distribution in the live area is much more limited than it would be in broadcasting.

That's not a very good answer.

Mr. Jim Abbott: I just wanted to get to Mr. Garrard about the—

The Chair: You don't want to monopolize the thing. We have a lot of time. I think we'll give the Friends a chance to comment. We can always come back.

Would you like to comment, Mr. Morrison, Mrs. Golfman?

Mr. Ian Morrison: Thanks.

Mr. Abbott, there are seven good questions there, and here are some bullet answers.

On the appointments process, I'd like to think that the advice we've given you—and I would refer you to our 35-page brief, rather than our 10-minute presentation, for our full advice—our advice on the appointments process is not something only your political party would support. I like to think it's something all parliamentarians might support, to get the best quality people running important cultural institutions in this country, and I point you to models such as the U.K. and South Africa. It can be done, it's not unique. It doesn't all have to be done out of the Prime Minister's Office without consultation.

On the news gathering issue, you represent the Kootenays, but I think from time to time you go through the city of Vancouver, and I draw to your attention right now, in the lower mainland of British Columbia, a situation where one company controlled by one family owns the three daily newspapers and two television stations. There's no public policy constraint on their ability to amalgamate their news coverage in such a way that the number of voices available to report the news in the city of Vancouver can be greatly constrained. That concerns us. It also concerns a lot of Canadians, as we know from Compas opinion polls.

On the question of the quality audience, I think there's some common ground with the Arts Council's comment that the challenge is to enable conditions that allow broadcasters to assemble the kinds of audiences that allow them to raise the kind of money where they can spend money on the areas where there is shortage of choice, which is the high production value Canadian programming, and that's a big challenge.

I didn't know you grew up at 401 and Yonge. I did, Cameron Avenue, Jim. So we have something else in common.

On the question of choice, our position is that in some ways the Canadian audiovisual system has more choice than any other system in the world. The shortage of Canadian choices of high production value is the problem. To give you a rough comparison, in the English language audiovisual system in this country 33% of the available product is Canadian. In the English language audiovisual system in the country to the south 98% of the available product is American. We have a lot of choices.

• 0940

With respect to that 1950s notion, there are hundreds of people in your constituency who would agree with us when we make the case that Canadian content matters. It's not so much a matter of control, it's rather a matter of creating the conditions where a number of decision-makers in the broadcasting system have incentives to do the right thing for Canada in return for all the protection and shelter they get from this Parliament. I would point out two recent events that may give you some notion that the control mode is already out of date, and perhaps we may have gone too far in surrendering control.

We have a situation where a major broadcaster just got permission from the CRTC last week to take control of a television licence, Women's Television Network, and then, contrary to what it had softly and broadly hinted and promised, moved it from Winnipeg to Toronto. We have another where a major broadcaster made a lot of promises about serving the people of northern Ontario, and a few months after getting a seven-year licence yanked services in Timmins, Sault Ste. Marie, and North Bay. That company is controlled by Bell Canada Enterprises.

So the CRTC may have gone too far in the direction of trusting people to do the right thing. We sense from our reading of public opinion a pendulum swing back in favour of making sure that, as St. Luke said, “those to whom much has been given, of them much is also expected”.

The Chair: We'll get back to you, Mr. Abbott.

[Translation]

Mr. Sauvageau.

Mr. Benoît Sauvageau: My first question is to Mr. Morrison.

Ms. Golfman and Mr. Morrison, I read your 35-page brief. It states at the bottom of page 1:

“FRIENDS' mission is to enhance and defend the quality and quantity of Canadian programming in the audio-visual system.”

Are you referring to programming in both languages, English and French, or in English only? That is my first question.

Mr. Ian Morrison: Since I am more comfortable in English than in French, I will repeat what I said in English. I have the English version here.

[English]

Please note that Friends speaks from a viewers' and listeners' perspective, grounded in the English language audiovisual system. Although we collaborate with groups who speak from a French language perspective, we do not purport to do so directly.

[Translation]

Mr. Benoît Sauvageau: That clarifies things. It also explains why the Internet site is in English only. You are targeting a specific clientele. Do you get grants from Heritage Canada or from the CRTC?

Mr. Ian Morrison: No, not at all.

Mr. Benoît Sauvageau: Not at all?

Mr. Ian Morrison: No. Our revenues come from after-tax donations, because we are not considered a charitable organization because our activities are sometimes political in nature. They are non-partisan, but political nonetheless. We received approximately $50,000 in donations last year. The average donation was $35. We get no funding from government, unions or corporations.

Mr. Benoît Sauvageau: I wanted to be sure I understood correctly. Thank you very much.

Mr. Ian Morrison: Fine.

Mr. Benoît Sauvageau: If you could make just one recommendation about changing the Broadcasting Act—I wanted to ask Mr. Garrard the same question—what would it be? What recommendation should we absolutely include in our final report? What would the Friends of Canadian—we should find another word—Broadcasting recommend, and what would you recommend, Mr. Garrard?

Mr. Ian Morrison: You ask what our most important recommendation is, the one we consider fundamental. I think you should emphasize the importance of the broadcasting policy set out in the Broadcasting Act. I think the eight principles of the broadcasting policy are absolutely key. They should not be changed. Rather, we should focus on the ways of achieving them in practice.

• 0945

Mr. Benoît Sauvageau: Thank you.

[English]

The Chair: Mr. Garrard, can you answer that same question?

Mr. Jim Garrard: I would say the answer would be somewhat similar. The Broadcast Act seems to us to be quite an effective instrument if it could be implemented in the way we think was intended. However, I think the recommendation we would be most inclined to underscore would be the most difficult, to use qualitative measures relating them to Canadian content. Numerical measures are relatively easy to deal with, qualitative measures are a struggle, but I think it is in that struggle that we could have some significant benefit.

[Translation]

Mr. Benoît Sauvageau: Thank you.

The Chair: Pardon me?

Mr. Benoît Sauvageau: Do I have time to ask another question?

The Chair: Very briefly, Mr. Sauvageau.

Mr. Benoît Sauvageau: All right. Have you looked at Internet broadcasting, or have you focused solely on traditional broadcasting? My question is to the Friends of Canadian Broadcasting. Did you also look at a possible amendment to the Broadcasting Act with respect to the Internet?

[English]

Ms. Noreen Golfman: Our concentration is really on the televisual field, which is not to say that in the future we might not turn our gaze to it. We are monitoring that environment and resisting recommending serious or heavy regulation of that environment. Inasmuch as we're interested in choice and diversity of choice, we think it's inevitable that we, as Canadians, have to participate in that discussion about what is available to us in the electronic sphere. At this moment our concentration is really on the act as it pertains to broadcasting.

The Chair: Ms. Bulte.

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Thank you all for coming.

Let me begin, Mr. Chairman, by saying that as a member of Parliament from the Toronto area, I know just how important the Toronto Arts Council is to a vibrant and wonderful arts community. I thank you, on behalf of the many artists and companies within my riding.

Let me start with Friends, and then I want to move into the qualitative measures, because I want to expand on that.

One of the things I noticed—and you can't help but notice—is the absence of what you consider local programming. I think this is a very important area. Mr. Morrison, you said in a response that some of the private broadcasters have stopped local broadcasting. We saw CBC appear before the committee last year, and they had stopped local programming. At that time Mr. Rabinovitch stated that if we looked in the act—and he's absolutely right—there's nothing that talks about local programming, it's regional.

What do we do? How do we foster the need for this local programming? Is it something that is so blatantly missing from the act that we're not looking at it? Should it be in there? What should be done? We keep hearing about the importance of local broadcasting everywhere, but nobody seems to do anything about it. What should be done? Give us some guidance in this area.

Mr. Ian Morrison: That's a very good question.

We undertook some research for a CRTC television policy process just three years ago, where we picked the city of Winnipeg as a typical anglo-Canadian market. We compared the availability of over-the-air television from 1986, when the specialty channels were just beginning, and 1997. What we found was that local programming declined in quantity, but also in quality. By that I mean that by 1997 in Winnipeg it was almost entirely news that was local. There were no longer any of the other categories, religious programming, music, a variety of things that are important. So if Winnipeg is in some way representative of Canada, we have 50 pages of data that prove that the broadcasting system has moved away from local in the last 11 years.

• 0950

We found at the same time that the audience for, let's say, Winnipeg programming in Winnipeg exceeded its supply. Sixteen per cent of the overall broadcast day was local Winnipeg, but 19% of the audience was Winnipeg. In other words, people like it.

So coming back to your policy question about the act, I would respond to Mr. Rabinovitch, were he to say that to me, what is the definition of regional you find in the act? I remember the distinguished leader in this field, Pierre Juneau, saying once, who can say that southern Alberta is not a region? Who can say that the Sault Ste. Marie area is not a region? It's somehow the notion that a region is something like the province of Ontario or the three prairie provinces. There's nothing that says that in the act. So I would advocate that Parliament's intent in 1991 in using the word regional was not to exclude the local, it was to distinguish from the Canada-wide.

So what is needed today, and Noreen is going to comment, is some type of push that may not require a change in statute, but indicates that it is Parliament's intent that Canadians be able to see their own community in their audiovisual system, and there's a huge appetite for that.

Noreen.

Ms. Noreen Golfman: I think it's an excellent question. I think the distinction between regional and local is often blurred, it's quite vexed. I'm living in a part of this nation, in St. John's, Terre Neuve, where the concept of region actually offends many of my neighbours, because it is meant to include the Maritimes and Newfoundland, or Atlantic Canada, and as a representative spectator, I would argue that “regional” or “the region” means to Newfoundlanders Newfoundland, and not that vast geographical sphere.

So the question is begged as to whether or not we are talking about geographical or cultural space, if you will. As Ian says, it would be very useful for the committee to draw its attention to that distinction, or at least to define it and make sure that what is meant by regional includes some notion of the local, so that the local doesn't drop out or is absented from this discussion.

Ms. Sarmite Bulte: Mr. Chairman, may I address Mr. Garrard very quickly?

The Chair: Be very brief.

Ms. Sarmite Bulte: I'm a very ardent supporter of the need for more Canadian content, not just Canadian content for the sake of its being Canadian content, but high-quality Canadian content, as you're saying, Mr. Garrard, having qualitative measures. But again, how are we going to achieve something like that? What will be qualitative? If we use theatre as an example, a successful run can attract 5,000 people as an audience, but are we defining it by box office success? Are we going to have it defined by a jury system, as happens at the various funding agencies? Are we going to have to get into a Canadian content type of schedule? Will it be as at the CRTC, where they have six out of ten points? I understand where you're coming from, but help me with this. How are we going to do it? Because I'm going to tell you, I don't think necessarily whether it's a box office hit or not makes a qualitative judgment. The biggest commercial producers in Toronto are the ones who are attracting the largest audiences, and those aren't Canadian productions, they aren't even performed by Canadian actors or directors.

Mr. Jim Garrard: I think a Canadian producer who's looking to make a profit, and that's a worthy goal, generally wants to hit some kind of home run when it comes to drama. They want to make a product they can market often and in many places. The point we're trying to make is that we have quality work being done, it's been recognized by the press, recognized by the public at the box office, and there is a certain qualitative measure there already. When you go into a city and you look at the five shows that had the most public attention last year, generally those are pretty good shows.

• 0955

You can add to that peer assessment, a system arts councils, and Toronto Arts Council in particular, have used for 26 years. We put together panels of peers who make judgments about which of the projects that come to us are most worthy. It's quite a good system, because we're relying on the expertise of people who do much the same thing.

The point we're trying to make is that there is within the incubators of the cities much high-quality work available for transfer or translation to broadcast. A combination of public and critical response with peer review would be a potent methodology for measuring quality. It wouldn't be perfect, but it would be, I think, effective.

Ms. Sarmite Bulte: Thank you.

The Chair: Mr. Bonwick.

Mr. Paul Bonwick (Simcoe—Grey, Lib.): Thank you, Mr. Chair.

I have a couple of things. First, there's been an issue raised on two or three occasions over the past several weeks, and Mr. Morrison addressed the issue again, so I would like, according to my opinion, to set the record straight and offer some clarity for what I think is misunderstanding about the appointment process. Clearly, there are either inaccurate statements being made or a misunderstanding of the actual process that's in place when, for example, appointing people behind closed doors at the PMO.

To give you some background on how the appointment process works, members of Parliament are contacted. We deal with numerous appointments for a variety of different boards and panels across the country, touching on any number of different sectors. We are notified of—

Mr. Dennis Mills (Toronto—Danforth, Lib.): The Liberal members of Parliament.

Mr. Paul Bonwick: The government.

We're notified of the upcoming appointments, and we have an opportunity to submit résumés of candidates we feel are best qualified to fill that job. So there is a very—

Mr. Benoît Sauvageau: I try to be serious.

Mr. Paul Bonwick: —open process, I believe, for us to put the proper people in place. I just wanted to clear up that misconception that it wasn't open.

Mr. Garrard, you raised perhaps an exciting prospect. One of the focuses of the committee, clearly, is to try to give Canadians more access to Canadian stories, to Canadian artists. If I understood the recommendation or the suggestion properly, it was that through our broadcast system, we have the ability to deliver live theatre to Canadians at potentially no cost or low cost. I'm wondering if you might expand on that, and more specifically, are you suggesting that there should perhaps be a specialty channel solely focused on Canadian live theatre? Or are you suggesting that there should be changes in guidelines or in regulations with CRTC ensuring that there are provisions for a certain portion of live theatre? Could you expand on that, because it's something I find very interesting?

Mr. Jim Garrard: Specialty outlets would be a good start. If specialty outlets had affordable product, I think they'd be happy to show it. The real issue for us is that the product is affordable. It already exists. We do tend, I think, in Canada to focus on the highest production standards, and this is good, but we're now capable of delivering quite acceptable productions standards at low cost, and we compensate for any loss in production standard due to low cost by using very high-quality available content.

Let's take a play for example. It might take, from the time the writer starts to write it to the time it sees the light of day for the public, sometimes in excess of two years, and a great deal of money and time has been invested. If that show is a hit and the public like it, the critics like it, the peers like it, it typically runs for three weeks and disappears forever, or if it's extremely celebrated, it might end up touring and being reproduced.

• 1000

Our point is that those productions are virtually ready for broadcast. Using the same artists, the same sets and costumes even, I think we have the skill within a very short period of time to turn that live event into an event fit for broadcast, and the economies there are tremendous. But I don't think private broadcasters are going to take a tremendous interest in that area, because it doesn't deliver the home run. So a government intervention there would be very useful, creating some kind of fund that would allow for these works to be translated almost immediately for broadcast. And the best of them could be broadcast to larger audiences.

The Chair: Mrs. Lill.

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

Thank you so much for coming in here and for all of your statistics, they've been very useful. Our goal here is to try to understand the health of the broadcasting system, and particularly, I would say, the public space, nurturing our public interest within that broadcasting system. The act said there was a public, private, and community element and that we are supposed to be enhancing national identity and cultural sovereignty. We are using radio frequencies that are public property, and so there is a responsibility on all the broadcasters to respect that and to nurture Canadian content and Canadian culture.

I've read much of your material, and you are coming up with some figures that are very alarming. The fact is that with the hollowing out of the public broadcaster because of the cuts in the parliamentary allocation, we have seen a whacking away of regional and local programming, and it's right here in your statistics. It's also clear from your statistics that it is the CBC that has demonstrated a commitment to creating and broadcasting Canadian content. Private conventional TV increased spending on Canadian content by 20%, but revenue increased by 36%, whereas CBC is the most efficient producer of Canadian programming, spending 78% of their revenue on Canadian programming in 2000, up from 57% in 1991. So we know that if the Canadian public broadcaster gets money, it puts it into Canadian content.

We are not seeing, however, a recommmitment at this point in time to that particular sector, and all indications are that with more concentration of ownership in private hands, Canadian content decreases, work for Canadian creators decreases. I've got figures from the Writers Guild that are very alarming about the cut to half of Canadian drama productions in the last three years.

I guess this is by way of asking you if you do see a direct correlation between the drop in the local and regional programming and the strengthening of the private sector in broadcasting.

I would also like your opinion on the effectiveness of the government programming to create Canadian content, because the Canadian TV Fund seems to have a whole lot of money, but as I've just said, the Writers Guild of Canada is saying that Canadian drama has dropped by half in the last three years. So what's the connection there? What is Canadian taxpayers' money going to if it's not going towards Canadian content?

• 1005

Ms. Noreen Golfman: I'll begin. In a way, you've answered the question for us by posing it as you have. Our research definitely shows that connection and has pointed out a failure in the system, a weakness in the system, that Canadian tax dollars are not being deployed in the Canadian public interest. Indeed, this is really what we're all here to discuss, or at least it's a major object of our attention. We are attempting to point out and underscore the CBC's commitment to the act and to its responsibility to cultural sovereignty, but it is very clear, as all our statistical information and research points out, that there is decreasing attention and responsibility on the part of the private broadcasters.

A lot of that is perhaps just taken for granted. In a universe that is increasingly complex, the appearance of a lot of choice, a word I think keeps coming back, is in some ways a defence of letting the system take care of itself. There is this slippage, and Canadian creators, writers, people who are responsible for the production of that cultural sovereignty we're talking about, are struggling very intensely to claim some of that space, claim some of that tax dollar, indeed.

Ian, do you want to follow up on the second question?

Mr. Ian Morrison: To focus on something you raised, public money, cable subscribers' money, taxpayers' money going to support production, there is our analysis of the Canadian Television Fund. It began by taking $100 million out of the CBC and putting it into the fund. That was the sale at the Treasury Board, a straight across-the-board switch five years ago. We're very interested in how that money is being spent, but our advice in the brief, based on all of our study, and the advice we gave to the heritage ministry a year ago, when it asked for advice about the fund, is essentially, scrap it. We have a better mechanism than the Canadian Television Fund, and that is Telefilm, which will be appearing before you later.

If there were an unlimited supply of money you could shovel into the in-basket of the Canadian Television Fund, they would be a very efficient mechanism for spreading it around in the production community. But since there is a limited supply of money, the problem with the Television Fund is that the money is not linked to the audiences who watch the program down the road. A good thing to ask the Canadian Television Fund when they show up here would be this. The money you spend on this project, this project, this project, what kind of audiences of Canadians watch them two or three years later, when they've made it through the system? The answer they will give you is, we don't know. We think it's because there's a board on which the deputy minister of Heritage represents the public, everybody else represents producers, cable companies, broadcasters. So there's not an incentive to think about the audience's interest.

Telefilm, on the other hand, is an institution—and I'm not saying it has no warts—that has the capacity to make judgments about where the money can be best spent with a public policy goal. So in a shortage of resources environment, we are taking the radical notion that you ought to use the best institution available, and that is Telefilm, and you ought to bankroll it effectively.

Mr. Jim Garrard: In our sector, missing is a mechanism for getting it from the stage into the broadcasting system. Telefilm might very well be analogous in this case to the Canada Council and be able to help broker that transition. If not, it might make some sense for peer review principles, which have been so effective for arts councils, to be applied to the fund, and I think it would be a very low cost, perhaps no net cost, to move some of this quality live programming into broadcast.

The Chair: Mr. McNally.

Mr. Grant McNally (Dewdney—Alouette, PC/DR): Thank you, Mr. Chair.

I just wanted to start by letting Mr. Bonwick know that we on the opposition side never see these forms that come asking for recommendations for CRTC appointments or IRB or veterans' appeals. I just wanted to let you know there's another universe out there.

• 1010

I want to thank you for your presentation and all your hard work here. Your comment saying you're here because of the financial support of individuals who are committed to your cause I think is encouraging. Often we get folks coming in here who are funded by the government or by other interest groups, but you're here because you believe in what you are doing, and I congratulate you for that.

Mr. Garrard, I like your idea of televising plays and live performances. I think perhaps there is a market for that. Getting to that next stage would be a bit of a challenge, but something worth pursuing.

I want to talk to Friends of Canadian Broadcasting for a minute about some of the comments they made in their brief. You take a bit of a swing at the Liberal government in this notion that broadcasters shouldn't be allowed to contribute to political parties. Can you explain that recommendation a little and why we might want to focus on that?

Mr. Ian Morrison: We have tracked political contributions by broadcasters using the legal definition, which is people who hold licences, so that would include the cable industry. We have done research from the mid-nineties on, including periods of the writs of general election campaigns, and have found that in relation to their size, some of the largest private broadcasting organizations.... I think we refer to them in the brief, but if I'm wrong on that, I'll name them. BCE, Rogers, and CanWest Global are the largest funders of political parties proportionate to their ability. The banks have a larger balance sheet, a larger market capitalization than, say, CanWest, but each of these organizations is putting very substantial amounts of money into the political system, and yet the organizations benefit greatly, as they are part of a regulated industry, from decisions that are made under the authority of this Parliament. So during the last election campaign we put out the data. They're all on our website. I think the URLs are appended as footnotes to the brief, if you want to check the data.

We put out a policy statement that “Parliament should just say no to media dough”. The reason was that we are concerned that this influence the media companies exercise, particularly with the party that happens to be in power, is excessive and not healthy. It's not improper for the media companies to try to influence the environment in which decisions are made, that's helping their shareholders. It's improper for public officials to countenance a situation where so much money is flowing. To give you the most concrete example, we didn't track just the money going to political parties, we tracked the money going to candidates who at the time of the writ of the election were in the cabinet. We found in the case of the CanWest organization that almost every member of the early 1997 Liberal cabinet got a four-digit contribution from CanWest Global.

We don't like it, the public doesn't like it. We polled about it and found that by about 80%, the public thinks this is an area that just should not be pursued. It would be a reform that would clean up the perception that the people who present the news are somehow in bed with the people who make the news.

Mr. Grant McNally: Okay.

My last question is about—and you alluded to it in your answer to Mrs. Lill—the Canadian Television Fund. We had a representation earlier this week saying how beneficial that was for the production of Canadian content, and I see your recommendation is that it be eliminated and the job moved into Telefilm. Can you expand a little more on that idea, because it seems to be the exact opposite view from what we heard just a couple of days ago?

Mr. Ian Morrison: We're not suggesting that the money should be put back into the consolidated revenue fund or refunded by Shaw to its subscribers, 10¢ per month or something, but that it be concentrated in an institution that is capable of directing it strategically. The Canadian Television Fund is a demand oriented fund. There are certain rules, there are certain criteria. You'll be getting into them later today, the CAVCO rules etc., but beyond that there is little evaluation of where the money can be spent most effectively, and our advice is, keep your eye on what the result is in respect of people viewing Canadian programming. We are concerned that none of that capacity of Telefilm is being used effectively to target the money. So if the goal is to ensure a thriving production industry, it's a great success. If the goal is to increase audiences for Canadian programming on television, it's not a great success.

Is that helpful?

• 1015

Mr. Grant McNally: Thank you.

The Chair: In the second run I've got three requests for brief questions, and I think we'll have to close there. Mr. Mills, Mr. Sauvageau, and Mr. Cuzner.

Mr. Dennis Mills: Thank you very much, Mr. Chairman.

Mr. Morrison, as you know, I celebrate the work Friends of Canadian Broadcasting has done over the years, especially in the area of local programming, but I have to differ with you on a couple of issues.

First is the whole issue of contributions. I can understand the sensitivity about contributing to ministers, as that does cause one to be concerned, but at the same time, I think we should encourage these corporations to become more involved with the entire political process, all MPs, not just a handful. In other words, I don't think we should do anything to discourage them from becoming involved in the political process. I'd be much more concerned about the amount of money these organizations spend with the lobby system in this town.

Going back to the whole issue of the Canadian Television Fund, I don't support your view of putting that place out of business. In my own community I have thousands of people who are employed in this industry, and I find that the entrepreneurship, the creativity, the energy that exists with all kinds of people getting an opportunity to have their creative skill, their production skill working is a very important foundation to developing the entire motion picture industry in this country.

For many years I've defended giving the CBC all the money it needs. If we take a look at CBC, it has not just been a centre for Canadian content and celebrating our cultural values etc., but it has also been a magnificent training ground for people who have gone on to work for the CTVs and the Globals and other parts of the sector. I think one of the CBC's great contributions is that it's been a training centre for thousands of men and women, not just in television, but also in radio. So I tend to support most of what you do, but I think it's a healthy creative tension and competition that there are outside production systems that work, and I don't share the view that it should all be done within the umbrella of the CBC.

Mr. Ian Morrison: I think what we have here is a misunderstanding, maybe on the part of both of us, so let me just make a statement.

First, I can't imagine a riding in Canada that has more people working in the audiovisual system than yours, Mr. Mills, except perhaps Mrs. Bulte's. There's a real concentration of people, so I understand your sensitivity on that subject, and indeed, we find that when we do an analysis of how many supporters we have by federal riding, those ridings tend to have very substantial numbers of people who care about our issue, up in the many hundreds—I think you know that.

I'd like to make it clear, first, that we think more money should be going to support the audiovisual system, because we think Canadians want more Canadian choices in the audiovisual system. What we say in our brief is that if there is a shortage of money to fund production, the available money should be concentrated in Telefilm, not the CBC, as the agency that is best equipped to intelligently distribute it, if the goal—and this is the goal we think is primordial—is to achieve more Canadian viewing of Canadian production. So it's rather a question of the efficacy of the television fund, as it's currently constituted, vis-à-vis Telefilm Canada. That is the policy argument we're putting forward to you, and if I heard you properly, you were hearing something along the lines of taking the money from the fund and giving it to the CBC. That was not our argument.

• 1020

Mr. Dennis Mills: Thank you.

The Chair: Monsieur Sauvageau and Mr. Cuzner, and then we'll close.

[Translation]

Mr. Benoît Sauvageau: First of all, to reassure Mr. Mills, I can guarantee you that no Bloc Québécois candidate got $1,000 in his or her riding. Fear not, we would have noticed. That is the first point.

Second, my question is about the appointment process, Mr. Bonwick. I would say that I am always surprised that you are concerned when there is a reference to competency as a hiring criterion. You seem to place more weight on party affiliation. I am sure there must be some competent Liberals. Do not worry.

Some hon. members: Oh, oh!

Mr. Benoît Sauvageau: There may not be that many of them, but there must be a few.

If I heard you and understood you correctly, Mr. Morrison, you spoke about an appointment process more along the lines of the one used in Great Britain, than the one we have here at the moment. As you can see, I do listen, in spite of everything.

Could you give us more information about this process? If not, could you send us some information so that we can consider the type of appointment process used in Great Britain when we draft our report?

[English]

Mr. Ian Morrison: Because I don't want the comment to get lost in generality, I'd like to focus on the board of directors of the Canadian Broadcasting Corporation. Would that be okay? We could talk about how the people get on the board of Telefilm Canada, we could talk about the appointment process to the CRTC, or indeed, how the CTF is structured, but let's talk about the board and the presidency of the CBC.

Right now, notwithstanding the comments of my colleague and friend, the process is a closed one. Certainly, members of the Liberal caucus are invited to submit their advice, and no doubt, upstairs their advice is given what would be called “due consideration”. But look at the results right now. In fact, just to take a shot at another political party, one that you're recently affiliated with, 12 years ago the board of directors at CBC was entirely, at one point, people affiliated with the Progressive Conservative Party. That is not the case today. The board of directors of the CBC, from our research, is entirely affiliated with the Liberal Party of Canada. That is not in the public interest, for a number of reasons. One reason is that we want the public broadcaster to be at arm's-length from government, and if the supporters of the governing party are the only people around its board, it pushes down to management the defence of the journalists and the creative people from political interference.

I would just point out that this is not something Friends of Canadian Broadcasting has thought up and is beginning to advocate. I'd like to quote to you a recommendation from Pierre Juneau, Peter Herrndorf, and Professor Catherine Murray of the mandate review committee of 1996, where they gave a lot of good advice about reforming the appointments process. They said this about the CBC:

Finally, we believe that Board members with a strong political background can provide some clear benefits. We want to stress, however, that the integrity of the Board and the independence of the Corporation would be enhanced if directors with known political affiliations represented the full political spectrum and not just the governing party. We note that this pattern has been followed by successive British governments and has, in our view, helped to preserve the BBC's independence and prestige.

The Chair: Mr. Morrison, if you have any written information on the British system, and I think you noted also the South African system and one other, that you could send to the clerk, it would be useful to members, for sure.

• 1025

Mr. Ian Morrison: Mr. Chair, I would just add that one of the suggestions in our brief is that the involvement in the selection process under the authority of the Privy Council might be expanded. No one wishes to constrain the capacity of the Liberal caucus, but it might be expanded to include such people as the Companions and the Officers of the Order of Canada, to ensure that the best and the brightest people are running these billion dollar cultural institutions in the national interest.

The Chair: Mr. Cuzner.

Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.): Thank you, Mr. Chairman.

I guess today's reality is that businesses, corporations, not-for-profits, all those agencies have been forced to become more effective and more efficient in their operations. Certainly, technology has provided us with a great opportunity to realize that, and it has extended into television and the presentation of television services.

Let me take this example. If Jim Abbott is about to announce his intent to seek the leadership of the Canadian Alliance and wants to go to Prince Rupert to make the announcement, maybe not all news services have the resources to cover such a story, but one that has an opportunity to share a newspaper or television, whatever it might be, may be able to justify sending somebody, or at least have the resources to send somebody, to cover that. What are the liabilities, I guess, or the potential abuses of having television services with a relationship with news gathering services?

Ms. Noreen Golfman: It strikes us that if ownership of communications systems is concentrated in the hands of very few people, the possibility of diversity of information, of points of view, of perspectives is diminished. It seems to us a point of rational common sense, in a democratic country such as ours, to encourage multiplicity of points of view and as much access to that environment as possible. So if a diminishing number of people are in control of communications systems, of media, it follows that the nature of the information itself will be diminished. It has always served this country well to have more people employed in the production of news and current affairs than fewer, and there is a relationship between the concentration of ownership and the concentration of the nature of the news itself.

Mr. Ian Morrison: And the statute, the Broadcasting Act, the broadcasting policy for Canada says:

and provide a reasonable opportunity for the public to be exposed to the expression of differing points of view on matters of public concern

So Parliament has spoken on this topic.

Mr. Rodger Cuzner: Perhaps if they are able to bring down advertising costs or provide other programming opportunities.... I think what Mr. Garrard is saying is very noble, and I think Canadians would like to see more of that. And by allocating additional resources to that, if they can streamline some aspects of their operation, you see that not being worthy, as far as weighing in on the equation is concerned?

Mr. Ian Morrison: It would be interesting to hear the views of the advertising community about the notion that the purpose of cutting production costs in the private sector, and indeed, I suppose, on CBC television, which is a very large private broadcaster in the sense that it's soliciting advertising, is designed to cut advertising costs. In fact, the money tends to flow to shareholders from those economies.

• 1030

I think the people who hold these licences, the private broadcasters, get a whole lot of protection that this Parliament has offered them. First, Ted Turner can't come and put up an antenna outside Ottawa and start broadcasting; you've got your ownership restrictions. Second, you have simultaneous substitution, which creates a huge amplification of the audience for American programming that comes in. You have income tax rules that prevent the deductibility of advertising on a Sault Ste. Marie Michigan station, if a Canadian advertiser wants to do it. You have so many of these protections, and it's a regulated industry.

It's really important that your commission, authorized by the Broadcasting Act, should be holding the people to whom these benefits have been given accountable for giving something back to this country, and some of the broadcasters are giving back more than others. The new television policy may have a salutary effect on this, but I just remind you of recent events, the WTN matter and the deplorable behaviour of Bell in northern Ontario in the last month. It's important that the private broadcasters be accountable for the obligations they incur in return for all these benefits.

The Chair: Mrs. Hinton has asked me for a brief question, and then we'll close.

Mrs. Betty Hinton (Kamloops, Thompson and Highland Valleys, Canadian Alliance): It's actually more a comment than a question. I have never met any of the witnesses before today, and I just wanted to tell Mr. Morrison that I think he has mirrored my point of view and said it in a far better way than I could possibly say it.

The Chair: You're too humble.

Mrs. Betty Hinton: No, I don't think so. You still remember my last comment, don't you?

I share your concern, though, and my colleague was wondering what was the fear of this happening. The fear with what's going on right now is that there is the tendency for it to become a propaganda machine when it is handled the way it's currently handled, and we have a situation in some cases where it's no longer reporting and it's more creative writing. When you have different points of view, which is what the act is about, there are safeguards in place, and that's the concern you've expressed so very well today, and I happen to share it.

Mr. Garrard, I would like to think a little more about what you've said today, because you're trying to offer Canadian culture and promote Canadian artists, which is something I would be very supportive of, but I'm looking at the channel line up here and I'm wondering if there is not a spot already where what you're proposing might be able to be filtered in, under Bravo or something along those lines. Is there somewhere already available where you might be able to do what it is you're trying to do?

Mr. Jim Garrard: I think the channels of distribution are probably sufficient, but the translation of the available live events is not happening to the extent we would like to see. Within the research and development arm of broadcasting, which is really the live arts area, there is not enough of the quality research and development going forward. I think the outlets are there, but we're not seeing the content.

Mrs. Betty Hinton: We have so much talent on the stages across Canada. I love going to live plays, I do it as often as I can. I always have this concern that we bring these people up to a certain standard, we support them, and they become very good at their craft, and we lose them to other areas, usually the United States. I would like to see a way to curb that, just as I would like to see a way to curb the loss we have of other professionals in this country, people we train with tax dollars and then lose to the United States. I would be interested in more information about this. I will do my homework and read whatever you send me.

The Chair: That's a good way to conclude this panel, Mrs. Hinton, with very well expressed words. Thank you very much for appearing. I think it was a very informative panel, and we appreciate your input. Thank you.

• 1034

• 1039

[Translation]

The Chair: For the second part of our hearing, we would like to welcome Mr. Jacques Bensimon, Government Film Commissioner and Chairperson of the National Film Board and Ms. Laurie Jones,

[English]

director of communications.

• 1040

From Telefilm Canada

[Translation]

we would also like to welcome Mr. François Macerola, Chair of the Board, and Ms. Johanne St-Arnauld, Acting Executive Director. Also with us from CAVCO, the Canadian Audiovisual Certification Office

[English]

Canadian Audiovisual Certification Office, Mr. Robert Soucy, the director,

[Translation]

and from the CRTC, Mr. Jean-Pierre Blais, Executive Director, Broadcasting.

[English]

Mr. John Traversy, the director of economic analysis and research, and Mr. Nick Ketchum, director of English language radio and television policy.

We'll start with the National Film Board. Please confine your remarks to 10 minutes, so we have time for questions.

Mr. Bensimon.

[Translation]

Mr. Jacques Bensimon (Government Film Commissioner and Chairperson, National Film Board): Thank you, Mr. Chairman. First of all, my thanks to you, Mr. Chairman and to the committee for giving the National Film Board this opportunity to present its views on the critically important work of reviewing the Broadcasting Act of 1991.

[English]

The role of Canadian content in the system is also of key importance, and as the eyes of Canada since 1939, the NFB has a major interest in its place in a new Broadcasting Act. To use a metaphor, the act should be the eloquent and compelling musical score for this country's Canadian content rules. The NFB has much to contribute here. Our current research shows that Canadians recognize and respect us as an important contributor to Canadian culture. But the NFB is at a crossroad. It must reinvent itself, and must do so with a cultural policy that first and foremost supports the telling of Canadian stories.

As the first commissioner to head the NFB who is both a former NFB filmmaker and a broadcaster, I understand the imperative of television programming. I returned to the NFB last June to reorient it so that it will give to a new generation what I was lucky enough to experience as a filmmaker. We want the NFB of tomorrow to mentor young filmmakers by involving masters of the form. We plan to bring alternative types of storytelling to the screen and have it reflect the wonderful cultural mosaic of Canada. And we want to build new bridges to connect with Canadians, through storefronts, the Internet and new media, public screenings, and television.

[Translation]

So, what should a new broadcasting act consist of? Minister Copps has asked you for recommendations on how to enhance the economic viability of high-quality Canadian stories, and how to build larger audiences for them. Let's start by talking about creating more great Canadian content, plus a dedicated public space on the airwaves.

Success stories in Canadian TV are not about soloists—they are about playing together. Think of The Boys of St. Vincent/Les garçons de Saint-Vincent, a triumph at home and abroad, which melded the NFB, CBC/Radio-Canada and private sector talent. For a new title, think of Bacon, le film, a highly controversial look at industrial pork farms in Quebec, an NFB film that aired recently on Tele-Quebec.

These titles prove what the public sector can offer Canadians. But we need more, and we need greater public appreciation for what the public sector gives us all.

[English]

For instance, Canadians are mainly unaware that when speciality channels flooded the airwaves in the eighties, they were mostly privately owned, but also largely publicly financed. That's because many of these channels went to air featuring hours and hours from the NFB's catalogue of 10,000 titles. If the NFB had partnered with a few of the specialty networks back then, instead of simply selling our catalogue by the pound, our financial circumstances and broadcasting opportunities would be quite different today.

• 1045

[Translation]

Nevertheless, the NFB is using new means to ensure our work is on TV regularly, and branded as such. While remaining a broadcast supplier, we are also a partner in a new digital service called the Documentary Channel. It gives us two scheduled, branded slots per week. But it is an English-only service, and Canada needs a French equivalent.

The NFB was set up with a clear determination to not only chronicle Canada but to disseminate our stories to all parts of this country. John Grierson started an impressive network of itinerant projectionists, and we are forever seeking ways to get our stories viewed by our citizens. A recast Broadcasting Act should look beyond the limitations of the conventional framework and recognize the NFB's evolving role as a key part of the public sector component of the broadcasting system, as an online broadcaster, via NFBTV.ca. And even beyond that, the act should encourage the NFB to join the ranks of licence holders, to reinforce the role of the public presence.

[English]

Amid the specialty channel explosion, the new Broadcasting Act must also restate the important presence and relative weight of CBC-Radio Canada as a source of national debate, celebration, and social cohesion. Using the new act as its sheet music, the government must protect the CBC and other bona fide public cultural institutions such as the NFB. A new act can further raise the visibility of Canadian productions by assuring their place on television, with a new system to evaluate the creation and not just the citizenship of the creators. The NFB can help too. With our Canadian productions, we should have an ongoing airtime presence on the CBC.

[Translation]

Which brings me to the issue of being Canadian in a fragmented market. How can programmers continue to feed product onto more channels and avoid creating low-end products? Most of the new analogue specialty channels became profitable soon after launching. They have added more Canadian content volume, but, predictably, spending on Canadian stories has plateaued. However, new money for high-quality Canadian stories can come from partners, including international co-producers.

And we need more program variety. Broadcast schedules today are more limited than Caplan and Sauvageau intended when they wrote their task force report in 1986. Recent research commissioned by the NFB shows Canadians want more Canadian reflection, more documentaries—and Mr. Stursberg's presentation two days ago made exactly this point—on a wide range of topics.

Just as globalization is shrinking the planet, we must reach beyond our Canadian boundaries to touch the rest of the world. We must not only become more open to partnerships around the world, we must also become more aggressive on the international front—by putting in place a network or a series of networks to broadcast our programming. Just like the American networks—Discovery, A&E and other networks, Canada must make its programs accessible to the world through broadcast channels that we control.

[English]

So the audience wants new rhythms in programming, and we must provide the partnership with existing channels, co-producers, emerging filmmakers, to make it happen. One excellent way to broaden programming would be to more fully represent the cultural mix of the country. Maybe if we did a better job representing Canadians, more would watch. Thanks to the CRTC, we do have APTN on basic cable, but some applications for multilingual stations have failed. And if you are French and you live outside Quebec, your choices are few. If you are lucky, you can pick up RDI, not always, TVA, not always, TV5, not always, and TFO is available in Ontario and New Brunswick. But that's little compared with the choices in English.

• 1050

High-quality Canadian content over a wide spectrum of genres, diversity of cultural reflection, and more choices in French all must be built into a new act that respects the need for public space. This foundation shelf space must come with a basic package offered to subscribers by cable and digital providers. If we don't set aside the space, public interest will slip away. Yes, cultural industries were exempt from the North American Free Trade Act, but the Broadcasting Act of 1991 also needs to be refined to clearly favour cultural objectives over industrial policies. For instance, the act made clear in 1991 that the CBC is a key element in a private-public mix, but just a few years later the government began a wave of devastating cuts to the CBC and the NFB. Then, in 1999, the CRTC refused to grant CBC-Radio Canada a licence for a French-speaking arts speciality channel. The same year the CRTC's new TV policy removed minimum spending requirements for Canadian content.

[Translation]

So how can Canadian content stand out in the zillion-channel universe? If Canadians could have true Canadian channels, where programming was at least 85% Canadian, our productions could become destination programming as well. But the ultimate question is—can we regulate value-added cultural programming? Certainly, in part.

Beyond content production, we must look at distribution. The private sector wants our act to permit more foreign ownership, and this pressure builds to a crescendo as media companies converge. We would consider more foreign involvement, but first, let's make the content stronger. It would be a travesty if, one day, Canadian content on TV were as poorly represented as Canadian content in our cinema.

I have almost finished, Mr. Chairman.

[English]

This is no time to rest on content regulation. We need to strengthen public sector broadcasters and producers to preserve cultural voices, the diversity of faces on screen, and a healthy selection of owners. The airwaves belong to Canadians. The new act must reflect their will, as the piper shall call the tune. Make it distinct, fortissimo, made in Canada.

[Translation]

Thank you.

The Chair: Thank you very much.

I would now ask Mr. Macerola and Ms. St-Arnauld to make their presentation.

Mr. François Macerola (Chairman of the Board, Telefilm Canada): Good morning. I would like to thank the chairman and the committee members for inviting us to meet with you this morning. My name is François Macerola. I am the Chairman of the Board of Telefilm Canada, and I had the pleasure of being the director general of this institution for six years. With me today is Ms. Johanne St-Arnaud, who is the Acting Executive Director of Telefilm Canada.

I will try to be brief. I would simply like to tell you that Telefilm Canada has been working in the area of Canadian content for close to 30 years, 20 of which were in television. We are here today to share with you the experience we have acquired over the years.

A number of expressions have been used to describe the Canadian content: distinctly Canadian, visibly Canadian, high- quality Canadian content, genuinely Canadian, and more recently, the new buzz word is "Canadian plus". However, all these terms hide a desire on the part of public bodies and the broadcasting and production industry to offer Canadians high-quality products in which they will be able to see themselves. Consequently, there are a number of terms, but just one idea, one philosophy: quality. And Canada is a content-producing country.

• 1055

So we play with these expressions that try to reflect the objectives of the country's cultural policy, as well as Telefilm Canada's objectives. The challenge is to find, develop and offer on our screens Canadian culture in all its diverse forms. This should continue to be the objective of the broadcasting system and the Broadcasting Act.

[English]

Most measurement systems have some imperfections. Some systems focus more on nationality—whoever makes it must be Canadian. We know that this has led to the creation of programming that was industrial in nature and not really about Canadian reality and Canadian culture.

Telefilm Canada, we believe, has been successful in finding the balance between having some rules and having some flexibility for creative development. But there is work to be done on having one single system across the board, not different systems, as we now have. International co-productions, for example, a permanent fixture of Canada's production landscape, do not use the Canadian content points system, yet in all cases Canadian creative and technical personnel benefit.

As the committee examines this and other issues in its deliberations, the following are some areas members may want to consider: requiring the Canadian broadcasting system to be owned and controlled by Canadians; greater synergy between public and private elements of the system—and I'm referring to the Canadian Television Fund; ensuring that the CRTC remains focused on regulation and not policy-making; international co-productions as a cultural development tool instead of an industrial tool; use of the best of Canadian television to brand Canada abroad; finally, the creation of a national audiovisual committee that would advise the government on policy issues, help the government to develop policies in the broadcasting area, and create synergy amongst the cultural institutions.

[Translation]

I will stop here, Mr. Chairman. Naturally, Ms. St-Arnauld and myself would be pleased to answer your questions. Thank you.

The Chair: Thank, Mr. Macerola.

Mr. Soucy.

Mr. Robert Soucy (Director, Canadian Audio-Visual Certification Office): Good morning, Mr. Chairman and committee members. My name is Robert Soucy and I am the Director of the Canadian Audio-Visual Certification Office, known by its English acronym, CAVCO.

In recent weeks, you may have heard about CAVCO. You have certainly heard about the point system for Canadian content, and tax credits as well. I would like to review the specific features of each of these points and give you thereby an overview of the work done by CAVCO.

[English]

CAVCO came out of direct government policy, as created by the Department of Finance, to institute fiscal incentives for the industry, starting in 1974 with the capital cost allowance program, which was designed to generate private investment and fund productions in that way. These were called tax shelters at the time, but over the course of twenty years, perhaps, the industry decided that tax shelters were not really the most beneficial instrument to support them. They preferred a tax credit. Further to representations made to the Department of Finance, a tax credit indeed was conceded to Canadian filmmakers and television producers in 1995. This effectively replaced the capital cost allowance program, and it continued to provide support for Canadian content production.

[Translation]

In 1997, the Department of Finance set up a new program called the Canadian Film or Video Production Tax Credit. The program was designed to bring foreign producers to Canada, or even to have Canadian producers with non-Canadian products shoot their films in Canada.

• 1100

I will try to distinguish between the two programs. The objective of the Canadian Film or Video Production Tax Credit is simply to foster the creation of a more stable funding context and a longer term growth of Canadian production companies. This is a tax credit that applies at the corporate level, rather than to individual productions.

[English]

As to the eligibility for the Canadian production tax credit, Canadian producers who operate in Canada owning the copyright in the productions will benefit from certified productions and will produce Canadian content. You've had occasion to become familiar with the points system through various other representations, so I needn't spend too much time on it. However, I would certainly be happy to respond to questions later on, if there are some things that aren't perfectly clear. Let me just say on that subject that official treaty co-productions, which François has referred to, are considered Canadian content as well, but they are not necessarily point-bearing.

I will skip over many of the particularities of my deck in the interest of moving forward.

The Canadian production tax credit and the production services tax credit, which you will find at the end of this deck, are co-administered by CAVCO and the Canada Customs and Revenue Agency. These are full tax credit programs that are industrial in nature, but have a cultural component as well. So CAVCO certifies productions as Canadian content, issues certificates to producers, and CCRA then interprets the Income Tax Act and grants the tax credits where needed. Slide 6 is a fairly brief explanation of what the calculations are. In fact, it's a very simplified calculation, but I'll leave that for you to read at leisure.

CAVCO and the tax credit programs are based on risk management principles. These risk management principles come out in many ways as a result of what our minister required through a report on the review of management practices of federal government mechanisms in support of film and television. We have put in place other mechanisms to provide risk management of these programs. In fact, we are pursuing attempts with the Department of Finance right now to open up the whole issue of transparency in the system, so that we can publish certified production titles, the name of the producers, and make the system much more coherent, in that we can as well speak of income tax matters perhaps—not necessarily income tax matters, but matters that come out of the certification with Telefilm Canada and with other agencies in a more transparent system.

[Translation]

The next few slides give you some statistics. Here again, I do not want to spend a great deal of time explaining them, except to say

[English]

production is healthy at the moment.

[Translation]

The Chair: Could you please give us the page numbers, so that we can follow?

Mr. Robert Soucy: Certainly. I am now on page 8, which give certain totals for CAVCO's work, including the total number of applications certified each year. I should mention in passing that the figures for 1999-2000 and 2000-2001 are not yet complete. We wait until the producers submit their applications for those particular years. The productions may still not be complete. However, we expect that the production level for these two years will be as high as it was in 1998-1999. The average aggregate budget was $1.8 billion a year. Here again, I would point out that the figures for the most recent years, 1999-2000 and 2000-2001, will definitely increase, as producers submit their applications and the office certifies the productions.

• 1105

I am now on page 9, which gives a regional breakdown of the productions certified by CAVCO. Finally, at the bottom of page 9, there is a pie chart showing the average number of points obtained by certified productions over five years. So, we see that many productions had ten points, that is ten out of ten, and somewhat fewer had nine, eight, seven or six points. This shows what Canadian producers are doing and what they can sell, not necessarily around the world, but in Canada.

Page 10 indicates co-production activity. These figures were obtained from Telefilm Canada. Here again, there are a fair number of official co-productions between Canada and up to 50 other countries. Our main partners are the United Kingdom and France, as you can see.

Moving to slide 11, we can see the trend in budgets. The slide shows total production budgets, for productions that have not necessarily been accredited yet. Telefilm and CAVCO figures do not always correspond, because of fiscal years. However, total co-production budgets amount to $677 million.

Lastly, we come to an issue raised earlier, during other presentations.

[English]

It was asked what the cost benefit is of all the amounts of money that go into this system. I have on slide 12 the Canadian production tax credit expenditures on a yearly basis. So in 2000-2001 $151 million were granted to Canadian certified productions. For 2001-2002, obviously, this total will certainly rise in time as more productions come through CAVCO and the CCRA to be processed.

Finally, I'll not spend too much time on the other program that CAVCO administers with Revenue Canada, the film or video production services tax credit. This is again used to encourage the use of Canadian labour in a purely industrial mechanism for productions that shoot in Canada.

[Translation]

Hollywood, which is welcomed here with open arms, shoots on location in Canada and spends a lot of money here. At the bottom of the next slide, on page 14, we see that in the past four or five years, $3 billion were spent in Canada. That is a significant chunk of the Canadian industry's revenue.

The last slide, on page 15, shows the total PSTC amounts allowed by the CCRA.

That concludes my comments. Thank you.

The Chair: Thank you, Mr. Soucy. Now, I would ask Mr. Jean- Pierre Blais of the CRTC to make his presentation.

Mr. Jean-Pierre Blais (Executive Director-Broadcasting, Canadian Radio Television and Telecommunications Commission): Thank you, Mr. Chairman.

Ladies and gentlemen, I will quickly walk you through the document, which was submitted to you in advance.

[English]

It's entitled “Canadian Radio-television and Telecommunications Commission. Canadian Content—Television”. If you have that in front of you, you're all with me. Basically, it's a walk-through of the key points of our regulation of Canadian content. As you know, conventional television's requirements are set by regulation. During the prime time period we require 50% of programming to be Canadian, and overall 60%; the CBC at all times has to be at 60%. To give some context for that, for a broadcaster like CJOH here in the region it would amount to nearly 4,000 hours of Canadian programming per year.

• 1110

For pay and specialty television, because the nature of their programming varies so considerably, our approach has been to set that by condition of licence. I have annexed to our presentation a list of the various levels, both for overall and prime time viewing, for those specialty and pay services.

The act requires us to define what is a Canadian production. I know you are well aware, because others have spoken to it, that we use a 10 point system, with two spending rules. It was recently restated and refined following a public process that started in 1999, and you can find the rules in our public notice, 2000-42. In order to be efficient in the way we regulate, we do accept the CAVCO certifications automatically as Canadian, the same way we accept official co-productions recognized by Telefilm Canada in their area of expertise. In addition, for broadcasters' in-house productions, we accept that certification automatically as well.

With the next slide, page 4, there are a few differences between the sorts of programming we recognize, namely, in the areas of sports, game shows, and public affairs. They are part of the obligations of broadcasters to provide the variety of programming, and we recognize that, which is not necessarily part of CAVCO's system. By the same token, we have a special project that, statistically, is not very significant. I mention it and you can read about it, because I have also provided you with a copy of the rules on that in public notice 42 about special recognitions. These are co-productions that are not under the official co-production treaty, where a Canadian has substantial control over the production, but not predominant control. We allow those for industrial reasons as well.

All the licensees must report monthly what they've broadcast, and it goes into a log system, which we then monitor monthly, but calculate on an annual basis, and discuss with the licensees, if there are shortcomings.

As for the number of applications we have, you have it on page 5. There has been a growing number of applications. The trend is linked to when we have new licensing rounds for specialty services, which immediately creates a demand for that kind of programming, and the independent production sector, therefore, files applications with us.

For expenditures I have added some numbers on the sixth slide as to the levels in both English and French television.

[Translation]

The data on French-language television in 2000 on slide 6 require a minor correction. The figure of $329 million comprises expenditures not only for the SRC but also for TVA and TQS.

[English]

The last slide has the results we've been able to detect through Canadian viewership of Canadian programming. As we mentioned last week, when you look at all the services available to Canadians, and that includes American programs, which are 100% non-Canadian in many respects, viewing Canadian is 33%. However, if you look at the viewing, for instance, on the CBC, it's 82% overall, and in private conventional it would be 39% overall. There is the challenge we have during prime time, where viewing Canadian is only at 13%.

[Translation]

The French-language broadcasting side has much healthier figures for viewing Canadian content. The figures clearly show that the viewing audiences are there. There are all kinds of historical reasons for this. As many have said, the challenge is on the English-language side. That concludes my comments, Mr. Chairman.

The Chair: Thank you, Mr. Blais.

• 1115

[English]

I have a list of questioners, so I hope we can really discipline ourselves, so that everybody gets a chance.

We'll start with Mrs. Hinton, Monsieur Sauvageau, then Mr. Mills, Mr. Harvard; we go back to Mr. Comartin, Mr. McNally, and then Mrs. Bulte and Mr. Bonwick. And then we'll have another round, if time permits.

Mrs. Hinton.

Mrs. Betty Hinton: Thank you.

Thank you for appearing today. It's always better to hear this first-hand than to try to read it and sort through it.

I'm going back to the presentation “Strengthening the Fabric of Canada”. On one of the charts I notice there was a dramatic increase in Atlantic Canada. It shot up tremendously. Could someone explain to me what happened there?

Mr. Robert Soucy: That's a very good question, and I'm not sure I have the answer for you. I would like to be able to explore that more fully when I go back to the office. It seems that indeed, productions did shoot up quite dramatically. I hasten to add that the whole year is not yet complete, as I've explained before, but certainly, there is a dramatic increase that needs an explanation. I would like to furnish one later one.

Mrs. Betty Hinton: It would be nice if we could find out what it was, and maybe we could apply it across the rest of the country and get the same kind of result.

The Chair: Mr. Soucy, could you direct this to the clerk, so that it gets distributed to the members?

Mr. Robert Soucy: Yes.

The Chair: Thank you.

Mrs. Hinton.

Mrs. Betty Hinton: That was the most outstanding thing I noticed, but my colleague would like to add something.

The Chair: Mr. Abbott.

Mr. Jim Abbott: We're wrestling with the whole issue of access and comparing access with quality of programming to attract Canadian viewers. Those seem to be the two parameters within which we can work. When broadcasters make their application to the CRTC for a licence for a given area, they do so on the expectation of being able to derive certain revenues and consequent profits from those revenues. I would like another comment from the CRTC on an area we touched on the last time they so graciously appeared before us.

In pushing the DTH policy quickly to provide an important competitive force to cable, we ended up with choices, but I believe we ended up with specific unintended consequences of those choices. I believe the current policy of the CRTC is harming local broadcasters. For example, I understand in places like Medicine Hat they have over 40% satellite penetration, and basically, the local broadcaster is being stuck in a blind spot. I don't want to limit choices, that isn't my objective, but what I am asking is, what thought has the CRTC given to the decision they made on pushing the DTH policy? These clearly unintended consequences are really very detrimental to the local broadcasters. When we're at a point here in this committee of asking how we are going to regulate, first, would the CRTC agree that this is a regulation that did end up with unintended consequences? Second, is the CRTC going to be making a change, and if so, in what period of time are they going to making the change?

Mr. Jean-Pierre Blais: The image I often use in regulatory policy is that it's like a balloon: when you press one end, something else bulges out. What we intended to do in the DTH policy was provide a competitive framework, which we thought was good for choice and protection of consumers. The DTH providers saw an opportunity to provide different time zones with certain services and not have distributed as much some of the local services out of Medicine Hat. And it is hurting, because as DTH penetration is going, advertisers are saying, I'm not going to buy the advertising out of that market. And we're well aware of the problem. In fact, we issued a public notice a month and a half ago—I want to check that—and it's in the process; tomorrow is the deadline for comments as to how we should approach the distribution for DTH, so that this unintended consequence does not occur for local small market players.

• 1120

There's a variety of options on the board. One can look at the sort of programs that are distributed by the DTH. Or there has been a scheme in place, which maybe needs refinement, to compensate financially those local market players.

[Translation]

The Chair: Mr. Sauvageau.

Mr. Benoît Sauvageau: This is not the time for questions. This is the appointment process, is it not? You say that it is not about that group. Fine. So I have questions about Canadian content.

There is something I am trying to understand. Here, I see the question “When is content 'Canadian”?. Mr. Bensimon of the NFB and Mr. Macerola of Telefilm Canada talked about Canadian content. In order to try to understand what this means, I will provide some examples, and then you can tell me if I am indeed understanding this concept correctly.

Who talked about criteria for tax points? I see, two people talked about them.

Would McLaren's short film Neighbours, which was exported and won an Oscar, have met the 1990 criteria for Canadian content, or today's criteria for Canadian content, since the flag did not appear anywhere, neither did Canada itself, nor the mountains? Would that film have met the criteria? The film Bacon showed neither mountains nor flags either. Lake Louise did not appear. Did that film meet the criteria for Canadian content?

When it comes to quality for export, in my view the short film Neighbours is one of the best short film we have ever exported.

Now, I will make a personal comment. I have young children, and I watch a program entitled “Dans une galaxie près de chez nous”. The program has some Canadian content. It could even be considered a foreign Canadian program. There are little flags everywhere. Is this program exported? My question is to anyone who cares to answer.

Mr. Jacques Bensimon: I would like to make things easier for you. If I may, I would point out that you chose two unfortunate examples, because both are NFB products. Therefore, they did not come under the criteria you are referring to.

McLaren's Neighbours and Latulippe's, Bacon are both 100% NFB- produced films. At the time, there might have been some reaction if those films had been made by the private sector.

Mr. Robert Soucy: Designations of Canadian content for CAVCO and CRTC needs do not have any genuine relation to Canadian content as such. It is more a question of who actually makes the films, who being the film makers involved.

Mr. Benoît Sauvageau: I understand. You are saying that Canadian content has no relation to Canadian content. I understand.

Mr. Robert Soucy: I am not saying this just to be annoying—Telefilm and the Canadian Television Fund do actually look at content. Thus, decisions are made to determine whether those productions have content pertaining to Canada.

Mr. Benoît Sauvageau: I do not know whether you have seen the short film Neighbours, but would you consider it has enough Canadian content? It won an Oscar.

The Chair: We'll take it one at a time. First, we will finish hearing Mr. Soucy, then we will hear Mr. Macerola. Telefilm focuses on content, while the other organizations focus on creation and production. Those are all complimentary.

Go ahead, Mr. Soucy. Finish your answer.

Mr. Robert Soucy: We use key personnel on the creation side as a basic criterion to determine whether a given production was essentially made by Canadians. The producer must be Canadian and have ownership of the film, in other words, he must have the copyright to that production.

The Chair: Mr. Macerola.

Mr. François Macerola: The Canadian Television Fund and Telefilm Canada both look at content. To reassure you, I would say that a film like Norman McLaren's Neighbours would have been funded by the Canadian Television Fund and Telefilm Canada this week. Bacon, the film about pork, could have been funded as well. And Telefilm Canada invests in the program Dans une galaxie près de chez nous.

• 1125

Since there is such enormous demand, the Canadian Television Fund has used Canadian content to prioritize projects. At the end of the day, the higher the Canadian content, the higher the score. Some producers responded in a somewhat... Well, I prefer not to say exactly how they responded. They put in Canadian flags and a beaver, rather than a moose or a lion.

Mr. Benoît Sauvageau: [Editor's Note: Inaudible]

Mr. François Macerola: This gets a bit ridiculous. The Canadian Television Fund is not asking for flags and beavers. The Canadian Television Fund says that, since it is a public organization investing public money, it will invest in Canadian products. At one point, the Fund might have gone too far. However, we are achieving a better balance these days. We are increasingly open to projects that, while describing Canadian life, are not necessarily as anchored in that life, or reality, as some people like to think.

The Chair: Mr. Mills.

[English]

Mr. Dennis Mills: Thank you very much, Mr. Chairman. I have three very short questions.

Mr. Bensimon, are all 10,000 titles of the National Film Board available on nfb.ca?

Ms. Laurie Jones (Director of Communications, National Film Board): If I could answer that, right now we have 800 films available. They are digitized and available to Canadian universities and research centres, as well as the cégeps in Quebec.

Mr. Dennis Mills: Okay. I don't want to take the committee's time today, but I'd like to meet with the person who markets nfb.ca, whoever that top person is. What I'd like to know is, if I put a hot button on my website to go to nfb.ca, would that give me instant access to those 800 digitized films? Just a quick answer is fine.

Ms. Laurie Jones: That is part of our negotiations with the copyright holders, the agreements we have with SOCAN, ACTRA, UDA.

Mr. Dennis Mills: When will you have all this up and ready to go?

Ms. Laurie Jones: We'll be testing with an Internet bed. Right now it's available on CA*net3. We will be testing with an Internet bed in about May of next year.

Mr. Dennis Mills: Okay. Thank you. I was hopeful there for a minute that we would have been ready now, because I think that would be a great jewel.

Moving over to Mr. Soucy, with your page 12, slide 7, if I read this correctly, you're saying the cost to the treasury of the tax credit is $151 million for the approximately $1.8 billion of co-production and other Canadian production budgets. Is that accurate? Do I understand that? That's the total cost to finance on that so-called credit that's kind of controversial right now.

Mr. Robert Soucy: These figures have been provided to CAVCO by the Canada Customs and Revenue Agency as to the amount of credits that have been allowed in a particular fiscal year. So between 2000 and 2001 $151 million may have been given out. It may represent tax credits for productions that have already been in their bank and are just coming through the system during that fiscal year. But you can see $115 million, $116 million, $151 million over the course of three years.

Mr. Dennis Mills: Okay. Fair enough. I understand.

Now here's the question. Pardon me, I just want to get right to the nub of this. As you know, the Minister of Finance, under heavy-duty influence from his officials, is about to shut this tax credit down and essentially sunset the productions that are in process. Are you aware of this?

• 1130

Mr. Robert Soucy: Yes, sir, I'm aware of that, but let me correct a misapprehension that I've seen creep through this committee over the last few weeks. Tax credits that the Canadian government gives to Canadian producers and non-Canadian producers are not tax shelters. A tax shelter is completely different.

Mr. Dennis Mills: So this is separate from the shelters?

Mr. Robert Soucy: It's a totally different instrument.

Mr. Dennis Mills: Do you have any idea of the value of the tax shelters that are being used?

Mr. Robert Soucy: No. These figures might be more properly provided by the Department of Finance. This is not an issue that concerns CAVCO.

Mr. Dennis Mills: So this is one of the instruments that definitely is not under review right now by the finance department. This particular instrument is solid.

Mr. Robert Soucy: The tax credits, yes, but the tax shelters certainly are being discussed, and I presume that some grandfathering approach is being discussed with the industry to try to get out of the shelters.

Mr. Dennis Mills: Is there any reason you wouldn't have talked about the tax shelters today in your presentation?

Mr. Robert Soucy: It's not a matter for CAVCO to administer. Sheltering, in fact, for the purposes of CAVCO was eliminated in 1995.

Mr. Dennis Mills: Okay. Thank you very much.

The Chair: Thank you, Mr. Mills. I think it's an important issue to clear up for us.

Mr. Harvard.

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

I've got some important questions for the CRTC relative to a situation that currently exists in my hometown of Winnipeg. I'm sure you know all about it, Mr. Blais. This may not go directly to the heart of this broadcast study of ours, but I do think the situation in Winnipeg does have some implications. As you well know, and I'm sure all of us in the room know, Corus Entertainment is shutting down the Women's Television Network facilities in Winnipeg, the city where that television network was founded. Fifty or sixty people are going to be put out of work. This announcement by Corus came very shortly after the CRTC allowed Corus to purchase this television network. According to a newspaper report, Mr. Blais, “the CRTC advised the specialty channel's new owner to recognize WTN's long-standing presence in western Canada and encouraged Corus to build on WTN's orientation as a western-based service.” That was very noble of the CRTC, but it obviously it didn't impress Corus very much. In fact, a Mr. Ellis from Corus is quoted in that newspaper report as saying that they, Corus, did not take that statement from CRTC as a dictate.

So my questions are these, and I hope you can answer, Mr. Blais. First, did Corus pull a fast one on you? In other words, did they deceive you? At any time in the proceedings before you did Corus even hint that if they got purchase of this facility, they would be shutting it down in Winnipeg and apparently, to use that euphemistic term, consolidating operations in Toronto? Did they ever hint that to you?

Second, did you ask what they would do with this new purchase if you so approved? Were they going to move it out of Winnipeg? Did you ask that, and if you didn't ask, why didn't you ask?

I guess another question from me would be, did you have the power to make that a condition of the purchase? If you're going to buy this, you can buy it, but you can't move it out of Winnipeg. After all, we have this feeling that you should be building upon the western orientation of this facility. Did you have the power to impose that condition? If you did have the power, but chose not to exercise it, why didn't you exercise it? If you didn't have the power, is it something you should have? Should you have that kind of power?

I can tell you, Mr. Blais, that people in Winnipeg are rather cheesed off—I could use some other words, but I'll try to keep this as a family show here. People are very upset. This was a network that was founded in 1995 in our city of Winnipeg. We're proud of it, and we're now losing it.

So those are my questions. I don't know what you can do with them, but I sure hope you can answer them.

• 1135

Mr. Jean-Pierre Blais: I have to be careful here, because the matter's before the commission and we'll have to deal with it. The moment we found out that the station was being closed, I immediately sent a letter to Corus asking them to explain how they would be able to live up to the expectation in the decision and fulfil their obligations under that decision, which talked about the role of women in the broadcasting system, as well as the presence in western Canada. We sent that letter immediately, and I think it reflects the disappointment of the commission with that decision within days of the approval. We've received a reply. I'd like to be able to share the result of that with you today, but I can't, because the commissioners have not ruled on it yet. We're examining the response. When that is done, I certainly wish to be able to share that result with you.

In the proceeding that led to the approval of this process this issue certainly was raised. There were some statements made by Corus, and that's the sort of thing we're looking at at this time. We have in other cases put in conditions as to where the physical presence of broadcasters ought to be. Commissioners have to make choices as to where they put obligations. In light of where we are in the study, I hesitate to go further than that in this case.

I understand your preoccupation, and I'm not trying to brush it off, quite the contrary. It's just that I have to use a bit of reserve here, since we are in the midst of a tribunal discussing a matter that's being reviewed.

Mr. John Harvard: Did they hint that they might move? Did you ask?

Mr. Jean-Pierre Blais: I don't think the public record would have included a blatant statement that they were closing the facilities in Winnipeg.

Mr. John Harvard: I appreciate what you've said, but in light of what you've said, could you, given what has happened since the sale was approved, in effect, reverse your decision or impose another decision on them to keep them in Winnipeg?

Mr. Jean-Pierre Blais: As I said, the decision is not entirely silent on these issues. One would have to look at what the exact force of it is. As I said, we wanted the western presence to be maintained. Once the commission has made a decision on a transfer, it is final, although there are always occasions when those companies come back before us, whether it's renewal of that particular licence or other filings in front of the commission. So it's a constant rendezvous with broadcasters, and we'll be able to discuss it further with them, pending the outcome of this.

Mr. John Harvard: So you are disappointed. Do you think they were honest with you?

Mr. Jean-Pierre Blais: I'll leave it at disappointed. I don't want to ascribe motives to their decision.

Mr. John Harvard: Thank you.

The Chair: Mr. Comartin.

Mr. Joe Comartin (Windsor—St. Clair, NDP): Mr. Blais, I 'm sorry, I don't understand your answer to Mr. Harvard. Would you have had the authority? Did the CRTC have the authority to compel them to keep the network and the people there?

Mr. Jean-Pierre Blais: When the commission considers transfer applications, we have the authority to impose conditions on the approval of those transfers. So it was, in theory, possible for the commission to impose that condition.

Mr. Joe Comartin: And if I understand your answers, there was no consideration at that time of imposing that condition when the licence was transferred.

Mr. Jean-Pierre Blais: The subject of a presence in Winnipeg and the continued role of WTN to support women in broadcasting was a matter of public record and the discussions the commission had. The decision actually makes references to that.

Mr. Joe Comartin: But it does not make it a condition of the licence.

Mr. Jean-Piere Blais: We did not go the additional step of imposing it as a condition of approval.

Mr. Joe Comartin: Let's deal with the other situation. CRTC reissued licences to CTV in northern Ontario—that was a seven year renewal—and within weeks NCTV announced the closing of newsrooms in North Bay, Sault Ste. Marie, and Timmins, which effectively killed local television news. My questions are along the same lines. Do you have authority to compel CTV not to do that? Was there consideration given at the time to require them to keep these services? There are 200,000 Canadians in that region who now don't have local television news at all.

• 1140

Mr. Jean-Pierre Blais: The model chosen for CTV to serve northern Ontario is a model to serve the region—and I understand the discussion we had earlier about local versus regional services. The challenge in some of the particularly small markets, and those are small markets, is that these broadcasters are losing money in serving news. News and public affairs programming is extremely expensive. They've made a decision. The TV policy, when we studied it in 1999, really did try to focus on building larger, more solid groups, because we saw the challenges of the future. And in this case, I'm not certain they understood the spirit of that decision, where we were saying we wanted bigger players precisely to effect cross-subsidization towards smaller markets like that. You may be aware that the commission has quite clearly told CTV that we did not think their decision was consistent with the spirit of our decision.

Mr. Joe Comartin: Given the proximity of the two, was CRTC told of their intentions to close those stations?

Mr. Jean-Pierre Blais: I don't believe so.

Mr. Joe Comartin: Then, again, you could have made it a condition that they stay open?

Mr. Jean-Pierre Blais: Yes, we could have, it was within the power of the commission to do so.

Mr. Joe Comartin: You have the authority to compel them, if they're going to do that, to give notice to the local community and come back before the CRTC. Can you make that a condition?

Mr. Jean-Pierre Blais: We've never done it in the past, but I don't think the commission's powers would restrict it from doing that. We just haven't looked at that sort of a model previously. It's an interesting model, but we haven't imposed it or ever considered it, to my knowledge.

Mr. Joe Comartin: One more area that gave us concern was the way Vision was treated when its renewal came up. You were obviously concerned about the record keeping on their part and other things. Recognizing the small size of that channel, you gave them a limited 33-month renewal with some fairly harsh conditions, compared to the way you've treated Global and CTV. Is there a double standard here?

Mr. Jean-Pierre Blais: The Vision situation goes to the heart of what we are discussing today. As I mentioned to you, they had conditions of licence as to what amount of Canadian content they should have been broadcasting. Their record keeping was less than ideal in this area, but since Canadian content is the heart of what we do, when licensees breach those conditions, there are consequences. The first step consequence is a short-term renewal, which we applied here.

In fact, it ends up being an opportunity for Vision, because we're working closely with them to help them. They actually have the Canadian content, they just were challenged in actually reporting it, and we're working with them. We had a meeting with them recently, and they're not only meeting, they're exceeding Canadian content obligations. So we're hopeful about cleaning up that situation, and it's working.

Mr. Joe Comartin: But when Global—

The Chair: Could I come back to you after, Mr. Comartin?

Mr. Joe Comartin: It flows directly from that last thing.

The Chair: All right.

Mr. Joe Comartin: But when Global confirmed this to you, there wasn't an issue of whether the records were accurate or not. When CIII-TV confirmed they had only been doing 13 hours a week, rather than the 17.5 hours they were required to, there was no restriction when you renewed Global's licence. There was no penalty, there was nothing. So again, is there a double standard?

Mr. Jean-Pierre Blais: No, there isn't actually, because it wasn't a condition of licence before, but we imposed the condition in the renewal. So there were consequences in that case.

Mr. Joe Comartin: So there was no requirement before as to how many hours, and you imposed the 17.5 after.

Mr. Jean-Pierre Blais: That's correct.

Mr. Joe Comartin: Thank you, Mr. Chair.

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

Mr. McNally.

Mr. Grant McNally: Thanks, Mr. Chair.

Mr. Blais, I'm wondering, with the CanCon reporting process, if you would have some numbers on what it costs the CRTC to monitor the whole system. Are there a certain number of people who compile these records, enter it into a database?

Mr. Jean-Pierre Blais: The Canadian recognition side?

Mr. Grant McNally: Yes, for all the broadcasters, both television and radio, that have to send in their forms indicating how much content they've been playing, somewhat self-regulated.

• 1145

Mr. Jean-Pierre Blais: With the Canadian recognition side of things, there are a little short of four full-time employees and a little less than $200,000 being dedicated to the Canadian recognition office. I don't have to hand the precise number for the logging side of the issue, which you are asking about, the follow-up when someone enters the logs and we report on that. We did get a question the last time we appeared on this very issue, and we're preparing a written answer that we'll send to the clerk.

Mr. Grant McNally: It would be great to get that.

You mentioned Canadian viewership in prime time, English language versus French language: 13% of Canadians are watching Canadian content during prime time. Is that what...?

Mr. Jean-Pierre Blais: We're looking at all the private conventional stations in Canada during prime time, and viewership of Canadian programming between 7 and 11 p.m. is at 13%. That's the very reason that when we reviewed the regulatory framework for Canadian television in 1999, which came into effect quite recently, we focused on prime time by creating priority programming. It was identified as an issue, and that's where we've put our resources to get that number up.

Mr. Grant McNally: So does the CRTC have an ongoing policy to try to raise those numbers?

Mr. Jean-Pierre Blais: Absolutely. The biggest challenge of Canadian television is prime time viewing. One intervener referred to it as where the fish are; that's where you want to have Canadian programming, because that's going to be the best chance you have for Canadians to be watching it. That's when people are in front of the television sets. I don't want to dismiss other periods of the day, for children and so forth, but the biggest challenge is there. The challenge comes as a result of a large exporter just south of the border and highly promoted programming. That's our big problem.

Mr. Grant McNally: The question that would flow from that, then, is the whole issue we're debating on the role of the CRTC, policy versus regulation, where the balance is, and the notion of whether this should be undertaken by the CRTC or the minister herself through government policy. I throw that out there, because that will be one of the main questions we're going to grapple with here, the role of the CRTC, possibly filling in a policy vacuum, or where te flow is from in the absence of that coming through your department.

Mr. Jean-Pierre Blais: I can only answer what Mr. Colville answered last week, that there is a difference in policies. There is broad public policy, and then there is regulatory police. When we talk about policy, we mean our regulatory policy. What it does is think out loud. It helps licensees or applicants know the sorts of things we would be looking for in an application. It actually aids the process. The act provides in section 6 that we can make those sorts of statements, and it's actually helpful. There's a different level of policy-making at play there.

Mr. Grant McNally: Thank you.

The Chair: Thank you, Mr. McNally.

Mr. Sauvageau has to leave, so colleagues have agreed to let him go ahead.

[Translation]

Mr. Benoît Sauvageau: Thank you, Mr. Chairman, and I thank my colleagues for their consideration.

First of all, you are here to help us in reviewing the Broadcasting Act. I have a question you may be unable to answer today, but I would appreciate having an answer in writing. I am reiterating the same question.

If you had a single recommendation to put in the report, be it to the NFB or to any other organization, what would that recommendation be? I would like you to write a five- or six-line answer, and send it to us. But if we have time, I would like your answer here.

Earlier on, I heard something about quantitative and qualitative Canadian content. If I remember correctly, that concept was mentioned by Mr. Macerola, though I may be wrong. When you determine the Canadian content of a given program, film or documentary, what percentage is qualitative as opposed to quantitative? For example, if a full Canadian team makes a fully Canadian film, on Canadian territory, about the fire in the Montreal Parliament after the 1937 to 1938 rebellion, what would be the quantitative percentage in relation the qualitative percentage for the team?

• 1150

Mr. François Macerola: I can send you the chart we use to determine these percentages, along with the recommendation we would like to put in your report. Let's say that quantitative is about 60%, and qualitative is about 40%. Quantitative aspects include projected revenue, viewership, potential recovery by Telefilm Canada, teams and funding. Naturally, the script is also read and assessed. I would say it is 60% qualitative and 40% quantitative.

Mr. Benoît Sauvageau: So you will send the chart used by people who determine Canadian content, so that we can see whether—

Mr. François Macerola: Yes, of course.

Now, if I may, I should point out that there are a number of systems used. The CRTC has a system, CAVCO has a system and Telefilm Canada has a system. Telefilm Canada itself has three sub- systems for Canadian content: feature films, television programs and co-productions. I am looking at Johanne, because she is the expert. At some point—and to some extent this comes within the committee's mandate—we will have to see how we can harmonize... [Editor's Note: Inaudible]

Mr. Benoît Sauvageau: In conclusion, I could well say that this would be a very good recommendation—a harmonized, uniform and simple eligibility process that ensures our unfortunate experiences are not repeated.

Mr. François Macerola: That is the kind of recommendation I would like to write.

Mr. Benoît Sauvageau: Thank you. I also thank my colleagues.

The Chair: Thank you, Mr. Sauvageau. Those were very useful comments.

[English]

The Chair: Mrs. Bulte.

Ms. Sarmite Bulte: Thank you, Mr. Chairman.

Thank you, all, for coming again. We have so much information.

Mr. Macerola, you spoke about CRTC spending less money doing policy work, and I want you to elaborate on that.

Mr. Bensimon, I want you tell me about how the NFB should reinvent itself and what you see as the NFB's role. We had before us some members of the CBC producers union saying that more in-house production should be done at CBC itself. How do you see your role now, with the rise of the independent filmmakers, producers, CBC? Where should we be going with the NFB? You have this wonderful history that was celebrated both in California and in New York a couple of years ago, but what is your future? Is there a future—and I mean that with all sincerity?

And Mr. Blais, you have a new chairman. Last week Mr. Colville was here speaking. I think, Mr. Chairman, I would like to invite the new chair, obviously not tomorrow, to come and give his vision of what the CRTC should be. With all respect to Mr. Colville, I think, as we move ahead in and we're looking at the review of the broadcast atmosphere, I would like very much to extend an invitation to have him come back again.

Mr. Jean-Pierre Blais: Mr. Dalfen's term only takes effect on the January 1, so I don't yet have a completely new chair, but we're looking forward to his arrival at the commission.

Ms. Sarmite Bulte: I believe we don't come back until the end of January, so it gives him three weeks.

But I want to start with Mr. Macerola. I think it's very important, as we look at what the role of the CRTC is and what the statute mandates that's used to supervise and regulate. We have our ADM, Mr. Wernick, talking about the important policy work the CRTC does in the way of transparency in bringing issues to the table, but at the same time, we have an act that says its role is to supervise and regulate. When you were doing your review of the CBC, there was some concern out there that you were getting close to that line of affecting policy or making policy, not just implementing it. So I'd very much like you to expand on these things.

Mr. François Macerola: First, I would like to make a nuance on the policies Monsieur Blais was referring to, used by the CRTC to provide its role as a regulator. I remember that I made that recommendation to the special committee, but I was very young at the time. I personally believe tthis government should establish an audiovisual committee, and that committee should be composed of people directly involved in the day-to-day administration of television, like Telefilm Canada, Canadian Television Fund, NFB, Radio Canada, with some other organizations also. They should be used to develop the general and overall policies, to act as a sounding board for the government, and to establish, create, and foster a better relationship and synergy among the cultural agencies involved in television.

• 1155

I know this kind of committee does exist in Europe, and what I like is that it does have also an aspect of continuity. So it's not every five years that you go through the Broadcasting Act, but with that kind of approach it will be a more dynamic and continuous process, so that everybody can be involved on a regular basis, not to reinvent the wheel every time, but to make adjustments.

For example, the Friends of Public Broadcasting this morning were saying, let's get rid of the Canadian Television Fund and transfer the money to Telefilm Canada. I didn't even smile, because for me the relationship between Telefilm Canada and the cable fund is a fantastic experience. For the first time in this country you have public sector people and private sector people working together trying to develop guidelines. We know we're all in a conflict of interest around the table, you have broadcasters there, but at least it's known.

A question like this one, for example, could very well at a certain point be tabled before this new audiovisual committee. That new audiovisual committee, as I said, in a dynamic and continuous relationship with the authority, could make regular recommendations and always have the objective of improving the broadcasting system in this country.

Ms. Sarmite Bulte: Do you see it as a SAGIT, the international trade arrangement?

Mr. François Macerola: It's a little bit more than a SAGIT. If I may, Mr. Chairman, I've already written a two-pager on that, and I can send you a copy.

The Chair: Please do.

Mr. François Macerola: It would be my pleasure.

The Chair: Thank you.

Mr. Jacques Bensimon: It would be very hard to give you my program in a few minutes. Let me just give you a few ideas of the things I think we should do.

First, to pick up on what Mr. Macerola has said, I think we have come to a time where there is to be a more important consolidation between the government agencies and institutions. That includes all of us, and I can speak for the Film Board in being very open to dealing with those issues.

As to how the Film Board can be useful, it's very simple. One thing is with emerging filmmakers. There is a need still in this country, when you are out of school and you're about to do that first, second, and third film, to have a place where you can be welcomed, in order to do your film or your first new media project. For the time being there are very few places that dedicate themselves to that. What we do is get people out of different film schools and send them into the industry, and pretty much they're caught in the cobwebs of the rules of the industry. There's got to be a kind of public place where a young filmmaker can come for their emerging development, at the same time linked with a mentorship of the great talent we have in this country, so that we can match them together.

Second, there is cultural diversity. It is extremely important, and even more important since September 11, that we be aware of the plurality of this country. I speak as an immigrant, as somebody who has been given the chance to express myself as to my origins. I think it is important that we continue to maintain that. I can tell you of an Iranian filmmaker who is just completing a film at the Film Board, and it drives you to tears, because he's showing you from the inside what it is to have lived in his country and to have come to this place.

The Film Board has to also be a partner with the industry. There's no doubt that for a long period of time we have been like a sign on Metropolitan Boulevard—the cars keep passing by. We're stopping the traffic this time and we're getting involved with the industry as much as possible across the country. My first 90 days in my job have consisted in crossing this country back and forth and saying the Film Board is open for business.

As to visibility of the Film Board, I spoke about storefront ability to open up the Film Board, so that distribution is coming. I'll just cite two examples on the visibility of the Film Board. There is Atanarjuat, the Inuit film that has been selected. Of all the films that have been selected it is the three Canadian agencies, the Film Board, Telefilm, and the Arts Council, who financed this film. It is low-budget, so low I can't even say how low it is, but it is the film that Canada has chosen to represent it worldwide at the Academy Awards.

• 1200

Also, we have, just to identify the cultural diversity, a film that we hope is going to be part of the Academy's selection. It's called Obachan's Garden, and it's by a west coast filmmaker of Japanese origin who made it about her grandmother. Again, it is that kind of thing that the film board should be about. I will stop it at that.

The Chair: Thank you very much.

Mr. Bonwick.

Mr. Paul Bonwick: Thank you, Mr. Chair.

I have a few points I want to touch, and first, I'll direct my comments to Mr. Blais from the CRTC. From time to time the CRTC is viewed in a critical fashion when we look at some of the impacts of decisions that have been made. When I listen to Mr. Harvard on this specific issue, this is a perfect example of why the committee, and I guess members of Parliament on a general level, become concerned about some of the decisions and the long-term impact of those decisions. As the committee is reviewing the role of the CRTC and how it pertains to the Broadcast Act, I'd like to put a couple of specific questions to you, Mr. Blais.

First, I'm trying to get my mind around how these decisions are rendered and how they're articulated by the commission itself. Is it typical for the CRTC—and I'm talking on a general level, not specific to this one issue—to render a decision and in doing so, simply express their desires during the meeting, rather than actually making them conditions? I'm talking about specifics like regional representation and infrastructure. It's nice to express those things verbally, but unless such things are put in as conditions, they're less than binding.

Second, when a decision is made, it is final, I understand, unless the minister, through Order in Council, wishes to change the decision. But you made a suggestion, and I'd like you to expand on it. The commission has the ability to link disappointment regarding the fallout of one decision to future requests. Did I understand you properly when you were saying that? If you aren't satisfied with an applicant based on how they conducted themselves after a decision was rendered on one situation, in future situations, should that applicant come back, you can deal with them in a different fashion.

That would be my questions to them, and then I have a couple more to share.

Mr. Jean-Pierre Blais: With respect to the second issue, I was referring to the renewal of that particular licence. The process we go through in deciding these matters is generally to issue a public notice based on the application file of the applicants, and the decision often reflects the concerns of interveners, in this particular case the concerns as well of regional commissioners and national commissioners who sit at the table.

I'm trying to avoid this particular case, as you know, but the commission has in other cases imposed specific conditions. It chose not to in this case. There is a written decision, where there are clear statements. It's not uncommon for the commission to grade its concerns by using different language, going from condition of licence, which is the highest expectation, moving towards requirements, which are quasi-obligatory. We've actually seen people apply for changes of requirements, which is strictly not required in procedural terms. And then we have other situations where we speak out loud, we just note, or we expect. This was more on the level of an expectation—hindsight's 20/20 sometimes.

Mr. Paul Bonwick: You clarified the linkage, because I was curious how you might do that.

I'm going to put a question to Telefilm Canada, but before I do so, let me say that the information provided about the tax credit in this graph was incredibly useful from my standpoint. Mr. Mills had spoken to me about it in the past, and I really didn't clearly comprehend the impact. In comparing your graph from 1996 through to 2000, it is very easy to establish a direct link between the amount of tax credits utilized and the growth in the industry from the budget standpoint. When I look at $39 million in tax credit utilization in 1997 versus $1.4 billion, and then I go to $151 million and $1.8 billion, the parallels are striking. So I hope the committee does continue to support that.

It was brought up by one of the previous witnesses that Telefilm Canada should fill a role presently filled by the Canadian Television Fund. Have you given any consideration to that, how you might do so and why you might do a better job?

The Chair: You addressed it before, but maybe you could just give your answer again for the record.

Mr. François Macerola: The only thing I can say is that Telefilm Canada has been involved in television for close to 20 years. At a certain point the government decided to develop a new approach and the concept of joint ventures between public and private sectors. Mind you, the first year wasn't easy, the second also, but now we're in our fifth year and it's going very well, because you know—

The Chair: The fund, the cable television fund—

Mr. François Macerola: Yes, the Canadian Television Fund. We did harmonize our policies. For example, with the licence fee component, they give contributions; we at Telefilm Canada invest, so we expect to recoup. We use the same grid of evaluation, but with some nuances, and what's great for the television community of this country is that they have two doors to knock on to be able to finance their projects.

There's always room for improvement in that kind of situation, yet my time as executive director of Telefilm Canada has been really challenging, difficult, but the results speak for themselves. This year we've invested in more than 2,000 hours of high-quality Canadian programming content. We've created something like 18,000 jobs, and we've reduced the costs of the administration, and that's very important for me, since we're administering public money.

So it is not a success story for the time being, but it is a success. When the government in its wisdom renews the fund or establishes the fund as a permanent organization, it will become a real success story.

The Chair: Mr. Abbott.

Mr. Jim Abbott: Thank you. So that I read this chart from the CRTC correctly, I wonder if you could help me understand the 50% under Mystery. This is English specialty broadcast during the day, and it says “50% Y/A 1-3, 55% Y/A 4-6”. Can you translate that for me please?

Mr. Jean-Pierre Blais: This is a digital service that was recently licensed.

Mr. Jim Abbott: I'm just wondering what the Y/A is.

Mr. Jean-Pierre Blais: It's the first year of operation. It's a upramping of their obligations on Canadian content. So in your 1-3 the A is anneé in French and the Y is “year”.

Mr. Jim Abbott: I understand. Okay.

Mr. Jean-Pierre Blais: So it's 50% in years 1 to 3, and then it would escalate to 55%, and so on.

Mr. Jim Abbott: Referring to this chart, I would like to ask a question of the CRTC, but I would really also appreciate input on the second part of the question from the rest of the panel.

The first part of the question is this. What is the objective the CRTC is attempting to achieve in licensing all these specialty channels? How does that relate to Canadian content? And the second part of the question, which is directly related, is this. This morning we had the Toronto Arts Council, and we have had others, talking about lack of access. We're spending well over $1 billion of Canadian taxpayers' money on creating Canadian content. We know the specialty channels are just begging for Canadian content. And yet we have a person before this committee today and other people saying there is a lack of ablity to get to air with Canadian content. What's wrong with this picture? If we're spending gobs and gobs of money and there is no access, and yet the CRTC appears to be providing all sorts of access, there's a disconnection here somewhere. Can you help me work that through?

• 1205

Mr. Jean-Pierre Blais: I'll take those in turn.

What is the objective of the commission in licensing all these services? The movement to speciality and pay television is not just a Canadian one, it's occurring in the States and in Europe. There's also a need to provide choices for Canadians, so that's one of the objectives. But when you link it directly to Canadian content, it's to make sure that Canadians occupy that space before others apply to be distributed in Canada. So we wanted a Canadian solution first.

Another option would have been to say, well, welcome 13th Street, which is the American equivalent of a mystery channel. We could have said, come on into Canada, but we decided, no, we will request applications for speciality services, because we know that we, as they are our licensees, can impose Canadian content quotas and create a content and occupy that field. So that's the link to Canadian content.

With respect to the second question, there are windows for that sort of programming. We mentioned Bravo, and on the French side ARTV, which is a window for performance art, but on top of that we asked the CBC and SRC about specific requirements and conditions of licence with respect to performance art. So we're creating the window.

The difficulty with arts programming—and there are better experts at this table about funding of arts programming than I—is that it's very expensive. There are not a lot of companies—Rhombus is one of them—and producing live shows, artistic performances, is very expensive. You have to buy additional rights to film. You actually have to produce differently, so that the on-screen presence has more impact than just putting a camera in front of a stage. You actually have to produce it differently.

Ms. Johanne St-Arnauld (Acting Executive Director, Telefilm Canada): I was confused by the lack of access question, but I understand now what you mean.

Arts programming has always been expensive, and fortunately, the licence from broadcasters represents 15% to 20% in triggering the Telefilm funding. The CTF policies for this year recommend—and it was accepted—that the licence fee be lower. So if you are a producer and you want to produce art, you will need, I think, 10% minimum licence fee. So it's going to be easier to access Telefilm funding, and the LFB cable funding also. So I think it's good news for arts programming this year.

Mr. Jacques Bensimon: I think you're right, we're multiplying the number of windows, so we've built huge boulevards with a lot of windows in there. The problem is that the products we're capable of putting in there are lower and lower in quality, for the simple reason that despite greater exposure, we still have the same amount of money that we're putting into the production of Canadian programming. Therefore, what we've done is diluted the process, and we have licence fees that, as Johanne was saying, are lower and lower. In every business plan you look at, you will see that the recouping takes longer and longer. So by the time licensers are capable of investing in Canadian products, their business plan has taken quite a long time.

That's why I said very often the Film Board has been—and here I'm coming back with the Film Board—at the base of a lot of the starts, to validate or to be a kind of plus in respect of Canadian content. Immediately Bravo started, WTN started. All those networks use the film board catalogues for their ablity to feed Canadian content, since it is credited as 100% Canadian content.

• 1210

As we have moved ourselves into the broadcasting business, the combination of the Documentary Channel with the NFB and Corus to create one network is a kind of model, where you see public and private mixing together. That's why I'm calling on you here and the Broadcasting Act to reconsider who the licensers could be in the future, who should be eligible to obtain a license, and I'm putting forward the name of the National Film Board as possibly being one of those, because we have the catalogues necessary to get there.

Mr. Robert Soucy: I would add, on behalf of CAVCO, that the integrated support directed to this industry is not alone in funding productions. I would hazard a guess that it is only a small part of what is required for the television production industry to function. The rest comes from pre-sales to international broadcasters, Canadian broadcasters as well, distribution advances that foreign distributors and Canadian distributors are willing to put up against the sale of this material. So a portion of that equation is being reduced for a number of reasons, so that there are many channels perhaps, and that dilutes the amount of money available for each individual program. World sponsorship in television production keeps diminishing because there is certainly a lot of diversity in the new broadcast field. All of these also affect the kinds of productions that will be made.

This morning Mr. Morrison spoke as well about the quality of the productions going to air and the creators themselves losing out along the way, funding productions to such an extent in Canada, but not seeing the creators necessarily benefit. These are the questions this panel certainly has to look at with respect to the amount of money that comes into this system, keeping in mind the market these products have to be delivered into and the extent to which the creators benefit from the amount of money put into the system.

Have we reached the ultimate balance, where things start to tip in either direction and it's time to look at the whole issue yet again? In fact, the Department of Canadian Heritage is proposing to look at the whole issue of Canadian content itself, the points system. Is it still valid? Can it function well with markets that are evolving? As you know, things change day by day, certainly since September. These are very good questions, but there is dilution in the system as we speak.

The Chair: Mr. Soucy, I hope you will take the message to the Department of Canadian Heritage that if they are working on Canadian content, they shouldn't duplicate what we're trying to do here, that they should send us information, so that if we have recommendations to make to the government, these can be incorporated. It would be a pity if we were to make recommendations that weren't in harmony with what the department is working on. I think we should really have some dialogue here.

Mr. Robert Soucy: Quite right.

The Chair: This is really the big issue that's facing us, Canadian content.

Mr. Jim Abbott: With your permission, Mr. Chair, I think we've got a pivotal point here. What I'm hearing—and help me if I'm wrong—is that as we end up with more and more specialty channels, as we end up with more and more choice for Canadians, we are ending up with an ever-increasing dilution of Canadian material available, to a point where it would be like the NHL expanding with another five or ten teams. Heaven only knows, they're diluted enough as it is. Is that really what we're talking about here? Are we at that point?

Mr. Jean-Pierre Blais: I would suggest that it's a bit more complicated, because you're looking at the broadcasting system as a whole, and there are various elements to that. There's a whole series of supply-side and demand-side matters. What we do at the commission is create demand by establishing exhibition quotas for Canadian content. Then there are other parts of the system that help the supply by creating funding. That is not just the creation of funds, although they're an important part, but there are also advertising dollars that go into Canadian material, because there are viewers to it, and so there will be advertising. On the specialty side, there are subscriber fees, so if it's a good programming choice.... I'm not certain all the folks who are listed here, especially from the most recent round, will survive. The subscribers have to be there to support them, and some of them may fall by the wayside. The commission's policy is not necessarily to guarantee their survival

• 1215

But if people are watching and they're particularly wanting to watch Canadian content, on Book Television, for instance, Canadian content related to books, they'll be there and programming will get made, and hopefully, we will have subscriber money and advertising money and public money and cable money supporting that. So it's about the push and pull, if I may express it that way, or supply and demand. It's complicated.

Mr. Jacques Bensimon: Can I just illustrate it?

The Chair: Yes, briefly, Mr. Bensimon.

Mr. Jacques Bensimon: Yes.

Mr. Shaw of Shaw Cable, to a certain extent, came out with a truth this summer when he said there would be a choice to be made. But I would say it has forced all of us in the industry to do something. One thing is to collaborate more with one another. And so, as in the illustration that was given earlier, rather than getting one licence from a broadcaster, you might have a collaboration between two, three, four broadcasters coming to play on one production. That's one way to go. The second is to be more open to international co-production, so that you call upon the international treaties we've put forth in a very important way. So I would go with Mr. Blais in saying that in fact, it's turning out to be a much more complex way of putting deals together than it was in the past.

The Chair: Okay.

Thank you very much. I think this has been extremely interesting and useful for us. We really appreciate your input today. Thank you for coming.

The meeting is adjourned.