CHPC Committee Report
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Dissenting Opinion of Conservative Party Members of the Standing Committee on Canadian Heritage Introduction The Conservative members of the Standing Committee on Canadian Heritage, have participated actively for over three months in the Committee’s study of the Evolution of Canadian Television, and disagree strongly with some of the principal recommendations or lack thereof within the Committee’s Report. We are, therefore, submitting this separate Dissenting Report. We acknowledge the importance to communities across Canada of local television broadcasting, particularly as it relates to coverage of news, sports, weather and community affairs. We also acknowledge the current economic recession is having a negative impact on the advertising revenues of most conventional OTA broadcasters, and in turn is making it more difficult for local broadcasters to fulfil their licensing conditions with respect to the provision of high quality local programming. Our Committee heard from a broad range of Canadian senior executives in the field of television broadcasting and distribution, television program producers and representatives of the unions and guilds whose members create television programming. We also heard on two occasions from the Chair and the Vice Chair (Broadcasting) of the CRTC, who reviewed with us the range of public policy initiatives the Commission believes are available to respond to the current financial challenges facing Canada’s local OTA broadcasters. The basic rationale for this Dissenting Report is that the Conservative Party members of the Standing Committee are firmly believe that specific recommendations in the Standing Committee’s Report or lack thereof fail to reflect the best interests of Canadian consumers and, moreover, fail to address the major problem identified by a vast majority of the 45 witnesses that testified. Specifically we believe that the Standing Committee’s recommendations, or lack thereof, in respect of:
Are significant shortfalls of this report which fail to address both the current cyclical and longer term structural challenges facing OTA broadcasters. Analysis Based upon our intensive review of the evidence presented to the Standing Committee, we believe the challenges facing Canada’s local OTA broadcasters are both structural and cyclical. Currently, most sectors of our economy are feeling some financial pain and OTA broadcasters have clearly suffered a loss in revenue as a result of the current economic climate. Although the Canadian broadcasting industry is well situated to benefit from the prompt turnaround of the Canadian economy it is still incumbent upon this committee to address the serious structural problems faced by OTA broadcasters. This is a duty the majority on the committee have abdicated with the main report. These issues must now be addressed in this dissenting opinion. Fee for carriage Many of the 45 witnesses that appeared before the Standing Committee identified the “fee for carriage” issue as one of the main points of contention between broadcasters and distributors and, as such, it was the duty of this committee to examine the issue and offer some guidance and advice on behalf of Parliament and the Canadian public. In fact, the approved mandate of this study included a provision to study fee for carriage. This duty has been ignored by the majority report. It is clear from the evidence presented that the “fee for carriage” debate is far from settled. The majority of conventional broadcasters, including CTV, Global, Quebecor, Remstar and CBC/Radio Canada as well as labour unions representing industry workers testified in favour of a “fee for carriage” model. At the same time, distributors such as Shaw, Rogers Communications and Bell as well as several smaller broadcasters like Corus Entertainment, Astral, The Jim Pattison Group and APTN have indicated their opposition to such a model. In light of this disagreement, the chairman of the CRTC has indicated that he is, “exploring mechanisms for establishing, through negotiation, the fair market value of these stations’ signals, backed up if necessary by CRTC arbitration.” While we agree that it is a fundamental right for individuals, groups and businesses to freely enter into negotiations and come to common agreement for mutual benefit, it was incumbent upon this committee to offer our advice and advocate on behalf of the best interests of the Canadian people that have elected us to do just that. Despite that responsibility, the majority report neglected to offer any guidance, leadership or advice to the CRTC, BDU’s or broadcasters on this vitally important issue of public policy. As such, this dissenting report must now indicate our most fervent and rigorous opposition to any potential fee for carriage system, either negotiated or imposed, that would have a detrimental effect on the consumer. We believe it is fundamentally unfair to expect Canadian consumers to pay new and substantial charges each month to their cable or satellite distributor to reflect such a system. We further believe that Canadians should not be expected to pay new fees to support local programming when no firm commitment was offered that such a fee would lead to improved access to, or quality of, local programming, the rehiring of laid off employees or the return of cancelled programs. In fact, no evidence was presented that such a system would lead to any additional Canadian content commitments of any kind. The 90% of Canadians who currently receive their television signals from a cable or satellite BDU already pay 5% of their monthly subscription fee to support the production of Canadian television programming. In the spirit of accountability and openness the Conservative members on committee would further support a full disclosure of these fees on billing statements sent to subscribers. This would ensure that all Canadians understand and are aware of their mandated support for local programming and Canadian programs. Restriction on Pharmaceutical Advertising The final recommendations of the Committee do not include direction with regard to the broadcasters request for removal of strict restrictions on pharmaceutical advertising in Canada. We believe Health Canada should immediately move toward the removal of said restrictions, which have become completely ineffective as foreign networks regularly broadcast them into Canada with absolutely no benefit to Canadian broadcasters or program creators. Based on a proportional estimate from the U.S. experience, it is reasonable to assume that the lifting of restrictions would provide several hundred million dollars in new revenues to OTA broadcasters with no adverse affect on Canadians already regularly viewing these ads. Limits or Caps to Foreign Spending While the Conservative members expect the CRTC to effectively enforce Canadian Content guidelines, it does have concerns that the motion to “address the growing discrepancy between foreign and Canadian spending” could lead to possible limitations on the broadcasters and their expenditures on foreign programming. While we are mindful of the discrepancy it’s important to recognize that while expenditures on foreign programming have risen dramatically over the past number of years, we feel that the CRTC should allow for the market forces to prevail. Out of control spending on foreign programming are the effects of competition but will eventually be curbed by the income reality of the industry. Administrative Monetary Penalties on Broadcasters and BDU’s While the Conservative members expect the CRTC to enforce Canadian Content guidelines, we have concerns that a heavy handed or an overly intrusive approach could have a destructive effect on the Canadian broadcast industry. In this regard we would suggest that the government consider the evidence heard by Canadian producers and make propose any improvements to the current system of enforcement it deems appropriate. The correct approach should insure compliance but do so in a fair and even handed manner. Conclusion Conservative members of the committee have approached the crisis in local television in an unbiased manner and have came forward with balanced recommendations that will assist broadcasters without hitting Canadians with substantial new television fees. We are standing firmly on the side of Canadian consumers and suggest that all industry leaders do the same. |