CHPC Committee Report

4.1 Fee for carriage

The adoption of a subscription fee for the carriage of OTA television signals by BDUs was raised on a number of occasions in the course of our work. Conventional television broadcasters maintain that such a fee is needed to compensate for the financial losses of general-interest television broadcasters. This request is not new and was discussed in public hearings held by the CRTC in 2006.[27]

CTVglobemedia, Canwest Media, Quebecor, Remstar and CBC/Radio-Canada are in favour of introducing a subscription fee for the carriage of local OTA stations by BDUs. The arguments presented by the general-interest television broadcasters can be summarized as follows: They maintain that cable and satellite companies rebroadcast programming originally created by general-interest television broadcasters and that the latter are suffering as a result. In addition, specialty channels are taking a large share of advertising revenues without creating enough original Canadian programming.

Labour unions in the broadcasting industry also testified in support of introducing a fee for carriage. That support is conditional on the revenues generated by the fee for carriage being channelled into the production of more Canadian programs in various genres (drama, documentaries, etc.).

On the other hand, the cable and satellite BDUs, such as Rogers Communications, Shaw Communications and Bell Video Group, strongly oppose the introduction of a fee for carriage. They contend that the crisis cited by television broadcasters is cyclical and that those broadcasters are partially responsible for their current plight because of poor business decisions. The BDUs doubt that the television broadcasters would reinvest the revenues generated by the fee for carriage in local programming and Canadian content. Furthermore, the BDUs maintain that if such a fee were instituted, the costs would be passed on to their subscribers, which could result in a $6 increase in their monthly bills.

In particular, Astral Media expressed great concern about Quebecor Media’s position on the fee for carriage. Quebecor told the Committee on April 20, 2009, that if it had to negotiate a fee for the carriage of general-interest television stations, that fee would be deducted from the fees that Quebecor pays to the specialty channels. For its part, the Aboriginal Peoples Television Network fears that the imposition of a fee for carriage would disrupt the broadcasting system and increase the costs to the BDUs’ subscribers.[28]

In May 2007, the CRTC decided not to introduce a fee for the carriage of OTA television stations by BDUs.[29] On March 25, Mr. von Finckenstein provided a detailed explanation of the CRTC decision:

The conventional broadcasters were unable to give us a solid commitment on how the fees would be used to improve Canadian broadcasting systems and specifically how they would be used to improve local programming. We also took into consideration the fact that their overall revenues had been stable in recent years, yet their expenditures on foreign programs had been climbing steadily.[30]

In addition, Mr. Von Finckenstein does not believe that a fee for carriage would solve all of local television’s problems. It might be only a partial solution to much larger challenges.

Some members of the Committee asked various television broadcasters if they were willing to reinvest the revenues generated by a fee for carriage in local programming. CTVglobemedia clearly stated that “the money should be used to support local programming.”[31] Remstar also said that the company “agree[s] to investing it in Canadian local production.”[32] Quebecor’s position was not as firm, in that its executives will be “ready to commit to and create the sorts of commitment to invest in Canadian programming.”[33]

CBC/Radio-Canada clearly stated that “any amount we would receive for fee for carriage, the infamous royalty so to speak, should go toward a priority that the CRTC has identified: Canadian programming, dramas, local programming. We are willing to make that commitment, for we have said we would and we have repeated that statement before the CRTC.”[34]

In Mr. von Finckenstein’s second appearance before the Committee, he identified a number of areas that he said require structural reform. One of these areas was funding. He said,

Rather than resorting to fee for carriage, we will seek to provide revenue support for conventional television stations by:

1. Investigating alternative support mechanisms for local programming,
2. Protecting the integrity of Canadian broadcaster signals, and
3. Exploring mechanisms for establishing, through negotiation, the fair market value of these stations’ signals, backed up if necessary by CRTC arbitration.[35]

Regarding the market value of stations’ signals, Mr. von Finckenstein said BDUs distribute the signals because viewers want them. Therefore, the signals have a value and he said the producers of the signals should be remunerated for their value. He said the amount of the fee would depend on the market of the station in question and that the participants in the market should negotiate the fee. He also expressed confidence that the industry groups would be able to negotiate.

Asked whether the BDUs would pass the fee on to consumers, he said the BDUs “have to be very careful how much they charge otherwise people will abandon the BDU system altogether, or the television system, and try to get their signals over the Internet.”[36]

Mr. von Finckenstein acknowledged that BDU subscriber fees might rise as a result of such a fee. Asked whether this created a two-tier system in which BDU subscribers pay to support conventional television and those who receive their signals over the air do not, he responded that people have the choice of being BDU subscribers or not. Michel Arpin, the CRTC vice-chairman for broadcasting, added that if people left the BDU system, they would also lose their specialty channels. He said, “... there is an equilibrium somewhere where everybody has to play fair ball: the BDU, because they want to protect their base, and the television operators who want to make sure that their specialty services still keep getting their revenues.”[37]

4.2 The Local Programming Improvement Fund

In October 2008, the CRTC announced the establishment of the Local Programming Improvement Fund (LPIF). Stations operating in markets with a population of less than one million would be able to obtain funding to improve their local programming.

The LPIF will be funded through contributions by BDUs and broadcasting companies. Their contribution will be 1 percent of their gross revenues from broadcasting activities. This will raise their contribution from 5 percent to 6 percent. This one-percentage-point increase will generate revenues of about $60 million, with $20 million going to the French-language market and $40 million to the English-language market.

The main objectives of the LPIF are as follows:

• ensure that viewers in smaller Canadian markets continue to receive a diversity of local programming, particularly local news programming;
• improve the quality and diversity of local programming broadcast in those markets; and
• ensure that viewers in French-language markets are not disadvantaged by the smaller size of those markets.[38]

The CRTC recently held consultations on the LPIF’s operating rules and eligibility criteria. The first LPIF allocations will be made in September 2009.

In his testimony to the Committee, the CRTC Chair stated that in his opinion, the LPIF is “part of the answer to the revenue problem conventional broadcasters face.”[39]

When Mr. von Finckenstein came before the Committee the second time, he provided more detail on the LPIF.  Noting the CRTC had not yet determined the final amount of money the Fund will contain, he said:

It is currently set at 1% of revenue, and in actual fact it now totals $68 million. One question that we have talked about and looked at in greater detail is whether this level is sufficient, or whether it should be increased to 2.5% or something like that. You will get the answer once we have made our decision, in July.[40]

Most of the witnesses who appeared before us were in favour of the LPIF. The CAB was in favour but maintained that $60 million is insufficient to address the pressures on local television.[41]

CBC/Radio-Canada requested access to the LPIF so that it can improve its programming at eight English-language stations and 12 French-language stations. In fact, the Corporation’s 2009-2010 budget is based on the assumption that it will have access to the LPIF.[42] The Newfoundland Broadcasting Company objected to the request because the CBC/Radio-Canada would receive the “lion’s share”[43] of the Fund.

CTVglobemedia applauded the initiative but saw it as a band-aid solution to a structural problem.[44] Remstar welcomed the establishment of the LPIF but wanted the rules to be made public soon and the allocations increased.

The Friends of Canadian Broadcasting (FCB), the Communications, Energy and Paperworkers Union of Canada and the Fédération des télévisions communautaires autonomes du Québec (FTCAQ) all stated that the LPIF will not be enough to meet local television’s needs. The FTCAQ was critical of the fact that community television stations will not have access to the Fund, and called for the establishment of a similar fund exclusively for community programming.[45]

It is important to note that other witnesses expressed serious reservations about the LPIF. Shaw Communications believes that this type of fund subsidizes anti-economic behaviour.[46] In the opinion of Cogeco Cable Inc., the LPIF is an additional burden in that the company is required to contribute 1 percent of its cable broadcasting revenues but is not eligible for an LPIF allocation. Rogers Communications stated that the introduction of the LPIF would result in a slight increase in subscribers’ cable bills.[47]

4.3 CBC/Radio-Canada

A number of witnesses questioned the presence of advertising on CBC/Radio-Canada’s English and French television networks. The issue is not new and has been raised in many forums in the past, including the Committee’s study of CBC/Radio-Canada in 2007 and 2008.[48]

Private broadcasters argued that it is unfair competition by a government agency that receives more than $1 billion in parliamentary appropriations. The hope expressed by some witnesses, such as the FCB, is that CBC/Radio-Canada will withdraw from the advertising market (except for professional sports programs) and open up that market share to other broadcasters.[49]

The idea may seem appealing at first glance, but it ignores the unique nature of CBC/Radio-Canada’s complex mandate to disseminate information to a linguistically and culturally diverse population across a large country.

As President and CEO Hubert Lacroix stated in his testimony, reducing the corporation’s advertising revenues would leave it with a large budget shortfall. He said:

If the question is, Lacroix, what kind of model would you present if you took advertising revenues out of the CBC, how many dollars would you need, the answer is pretty simple in terms of what amount of commercial revenues we need to balance our budget. The number is anywhere between $300 million and $325 million in 2009-10 in our budget.[50]

4.4 Licence fees under Part II of the Broadcasting Act

The Broadcasting Licence Fee Regulations, 1997 apply to all licensees except the types of undertakings listed in section 2 thereof. These include student, native, community and campus/community broadcasting undertakings, as well as CBC/Radio-Canada broadcasting undertakings. Every licensee covered by the Regulations is required to pay Part I licence fees and Part II licence fees to the CRTC each year. A portion of the fees goes to the Consolidated Revenue Fund.

Some broadcasters have filed suits in the Federal Court of Canada to challenge the legality of the Part II licence fees. In an initial decision in December 2006, the Federal Court held that the licence fees collected from broadcasters and BDUs were an illegal tax. On April 28, 2008, the Federal Court of Appeal overturned that decision. In December 2008, the Supreme Court of Canada agreed to hear the private broadcasters’ case on licence fees. It is worth noting that the CRTC neither calculated nor collected Part II licence fees for 2007-2008 and 2008-2009. In 2006-2007, it collected $121.9 million in Part II fees.[51]

In our study, a number of broadcasting industry representatives recommended that the federal government assist the industry by halting collection of those licence fees.

In his appearance before the Committee on March 25, CRTC Chair Konrad von Finckenstein clearly stated that resolving the licence fee issue would be good for the entire industry:

There are about $200 million of reserves that they carry on their books. Is this not a time to cut a deal? The government won its case. They’re never going to get the money anyway because these broadcasters are broke. You know that. So why not make a deal here, saying we will stop this unfair tax? If we establish the principle, we can do it, but it makes no sense. On the other hand, you, the broadcasters, give up any claim for refund.[52]

4.5 Local programming obligations and Canadian content

The CRTC’s 1999 television policy set out a framework that requires local and regional reflection whether through news or non-news programming. The policy establishes incentives to provide non-news programming that reflects legitimate community interests during peak viewing periods. For news programming, television stations have to demonstrate how they meet the demands and reflect the particular concerns of their local audiences. The CRTC has the right to impose specific conditions of licence on a case-by-case basis.[53]

Some witnesses suggested reducing obligations for conventional television stations as a way of resolving their financial difficulties. Kenneth Engelhart, senior vice-president, regulatory and chief privacy officer for Rogers Communications, said:

[T]here may have to be some recalibration of the regulatory obligations on over-the-air television. In the past, over-the-air was a licence to print money, and the CRTC loaded them up with obligations. In some cases, they have to do many hours of local and, in addition, Canadian drama in prime time. I could see in the hearings the CRTC initiating a recalibration where more of the Canadian drama obligation falls on the specialty programs. The local television station does local and news but less than before.[54]

Mr. Fecan of CTVglobemedia said:

[W]hen conventional television made a lot of money, the regulator imposed many obligations for the privilege of owning conventional stations. These varied from the amount of local news a station had to produce all the way up to the number of Canadian dramas a station needed to commission from independent producers. As the conventional business deteriorated, the obligations have largely stayed put. This makes no sense.[55]

Regarding the situation in small markets, Mr. Arnish of the Jim Pattison Broadcast Group said:

[O]n all small market stations in populations of under 300,000, there should be no regulatory obligations at all, including the current Canadian content rules, where 50% of our programming must be Canadian in prime time, as well as 60% throughout the broadcast week. This would allow small markets to compete with all distant regional Canadian and American signals, along with foreign services and specialty and pay-per-view, which have severely impacted the tuning and revenues of our stations.[56]

Other groups, particularly those representing those involved in production, said broadcasters should not use the crisis in local television as an reason for reducing programming obligations. Indeed, Maureen Parker, Executive Director of the Writers Guild of Canada Writers’ Guild said some broadcasters were not meeting their current obligations:

At the CRTC hearing, we've heard that several broadcasters are not in compliance with a number of the regulatory obligations, from hours of news to hours of Canadian content.[57]

Claire Samson, president and chief executive officer of the APFTQ, said that her group:

[I]s concerned about the future of our broadcasting system if the difficult economic situation becomes a pretext for relieving corporate broadcasters of their obligations. We continue to believe, very sincerely, that Canadian content must remain central to the broadcasting industry so as to meet the requirements of the Broadcasting Act.[58]

Mr. John Barrack, national executive vice-president and counsel for the Canadian Film and Television Production Association, concurred, saying, “Today, rather than addressing what we believe are relatively low regulatory obligations, private over-the-air television broadcasters are attempting to reduce or outright eliminate their priority programming requirements.”[59]

Brian Anthony, national executive director and chief executive officer of the Directors Guild of Canada, said:

To be granted a licence by the public authority is a privilege. As that privilege is accompanied by the benefits of a protected broadcasting environment, it brings with it certain expectations and requirements, the cost of being allowed to carry out business as a Canadian broadcaster. It is our view that any lessening of current Canadian priority programming requirements would be wholly unacceptable and indefensible.[60]

When Mr. von Finckenstein made his second appearance before the Committee, he spelled out a number of steps the CRTC intends to take regarding programming obligations. He said “Conventional broadcasters need to refocus on the core elements of their service — local news, local programming and programs of national interest.” He went on to say that rather than having different programming requirements from station to station, the amount of local programming should be harmonized depending on the size of the market they serve.[61]

In exchange for harmonization of obligations and negotiated funding, Mr. von Finckenstein said it would be “necessary for broadcasters to provide firm commitments regarding local news, local programming and programs of national interest.”[62]

Mr. von Finckenstein also said that some sort of mechanism appeared to be necessary to restrain spending on foreign programming.[63]

Some Committee members asked whether the CRTC has the necessary tools to enforce commitments to local programming. In particular, they wondered whether the ability to levy monetary penalties would help with enforcement. Mr. von Finckenstein said that the lack on monetary penalties was one of the major shortcomings of the Broadcasting Act and that having them would make his job easier.[64]

4.6 Distant signals

The Committee also heard that distant signals are a financial issue for conventional television. According to the CRTC, the term is, “generally used in connection with the retransmission of signals that originate in one time zone to subscribers in another time zone. The availability of such signals allows subscribers to ’time shift,’ thus providing multiple opportunities to view a given program.”[65]

The problem for local stations is that BDU customers have the option to watch a given program on a station that is located in another part of the country. This can affect the advertising revenue of local stations.

In his first appearance before the Committee, Mr. von Finckenstein, addressed the issue of distant signals. He said:

[W]e settled the question of distance [sic.] signals, better known as time shifting. This is a popular feature that allows satellite and digital cable subscribers to watch local television stations from other provinces. We decided that conventional broadcasters should be fairly compensated for the retransmission of their signals. CTVglobemedia and CanWest estimated lost revenues from time shifting at $47.2 million annually. We have therefore given conventional broadcasters permission to renegotiate with cable and satellite companies for their use. We hope the issue can be resolved through speedy negotiation and will result in an additional source of revenues for local broadcasters.[66]

A number of witnesses discussed distant signals. Peter Viner, president and chief executive officer of Canwest Television identified it as an issue, saying, “Cable companies have been allowed to flood markets with three or four signals, the same signals but on different time shifting,”[67] André Bureau, chairman of the board of Astral Media, said that compensation for distant signals was an immediate regulatory measure that could be taken.[68]

Pierre-Louis Smith, vice-president policy and chief regulatory officer for the Canadian Association of Broadcasters (CAD), discussed the monetary harm to local stations caused by the distribution of distant signals. He said:

CAB estimates that the economic impact of the distribution of Canadian distant signals through the OTA sector was $70 million in lost advertising revenue for the year 2005-06 alone, of which BDUs compensated broadcasters $10 million to offset the loss — clearly not an acceptable level. Therefore, broadcasters have asked for the right to exercise control over the carriage of their signals out of market.[69]

Douglas Neal senior vice-president of the Newfoundland Broadcasting Company, said that fee for carriage and distant signals were linked and that fee for carriage would help to offset the damage caused by distant signals. He said that it should be an industry-to-industry matter, but that the CRTC mediation process or government intervention might be required to solve it.[70]

On the other hand, Mirko Bibic, senior vice-president for regulatory and government affairs for Bell Canada Video Group, said that if satellite companies were forced to pay even more for distant signals, subscriber fees would go up.[71]

In Mr. von Finckenstein’s second appearance before the Committee, he was asked whether why it would not be possible to end distant signals in order to protect local stations. He answered the simple reason is that Canadians want distant signals. He went on to say:

I don't feel that it's our role to tell Canadians what they can or can't have. Let the market decide. What we're trying to do is make sure, to the extent, there is value in it and that value is being given to the broadcasters.[72]

4.7 The shift to digital

The transition to digital mode involves converting the production, distribution and transmission of television programming from analog mode to digital mode. The shift from analog television to digital and high-definition television (HDTV) will provide Canadian audiences with better picture and sound quality. The same transition is taking place in many other countries.

It is a major change for the Canadian broadcasting and telecommunications system. For many years, over-the-air (OTA) broadcasts were the only way of receiving television signals. The arrival of cable television and, later, satellite television led to a steady decline in the use of OTA technology.

In 2007, cable, satellite and multipoint BDUs covered more than 12.4 million Canadian households.[73] In other words, 90 percent of Canadian households subscribed to BDUs to receive programming services. Conversely, less than 10 percent of Canadians received OTA television signals. The corresponding figure in 2000 was 16.4 percent.[74]

For broadcasters and BDUs, the conversion to digital means that more frequencies will be available in the broadcasting spectrum. In other words, more efficient use of the spectrum paves the way for more high-definition television channels and new wireless services.

The CRTC has decided that as of August 31, 2011, analog transmission of television signals will cease. Broadcasting licensees will be permitted to transmit only digital OTA signals. Licences will be issued or renewed accordingly.[75]

CBC/Radio-Canada explained that the conversion to digital was putting financial pressure on its operations. The Corporation noted that under its hybrid plan, 44 transmitters would have to be installed to reach 80 percent of the population. To date, however, it had only eight digital transmitters covering about 47 percent of the population.[76] President and CEO Hubert Lacroix made it very clear that funding is “really a big issue”.[77] In its 2008-2013 Corporate Plan, CBC/Radio-Canada stated that it “will not be able to roll out digital TV transmitters beyond the eight markets already delivered.”[78]

Private OTA broadcasters are also facing the challenge of the digital transition. It is a major challenge for the industry in terms of time and money, and the current economic situation is not ideal.

In CTVglobemedia’s view, the change was not driven by consumers or the industry. It resulted from “a bilateral agreement between the U.S. and Canada, where both governments want to auction the conventional TV spectrum for billions of dollars.”[79] The company says that it is unable to invest “several hundreds of millions of dollars to reach 9 percent of the marketplace, particularly when this investment produces no additional revenue in a business that is already teetering on the edge.”[80] Cogeco took a similar position, stating that the federal government will come out the big winner by selling off the reclaimed portion of the broadcasting spectrum.[81] The Newfoundland Broadcasting Company added that a government-funded television advertising campaign was needed to educate the public about the migration to digital television.[82]

Bell Video Group also commented on the issue. The company maintains that converting all analog transmitters to digital would be too costly. In its presentation, the company suggested that some general-interest television broadcasters transmit their signals by satellite instead of OTA, especially in sparsely populated areas. This FreeSat model would enable consumers in those areas to receive conventional television stations by satellite rather than OTA.

Last year, the CRTC established a working group composed of senior executives of broadcasting and distribution companies to find some solutions. The Working Group published its conclusions on April 20, 2009. The industry leaders asserted their position at the very beginning of their report:

The OTA broadcasters have made it clear that this Government policy and the expectations for the accelerated digital transition present an enormous challenge to the broadcasting industry given the magnitude of the digital transition, the significant costs involved, the short time frame remaining before the deadline and the generally unfavourable economics.[83]

The Working Group estimated that it would cost $330 million to convert all existing analog transmitters.[84] The members of the Working Group made three recommendations:

• that changes be made in the appropriate regulations that would allow broadcasters to maintain their must-carry, simultaneous substitution and local advertising entitlements without the requirement of owning or operating a transmitter;
• that steps be taken to ensure that no additional distant signal or copyright liability is created as a consequence of implementing the hybrid model; and
• that, if it remains a public policy objective to convert from analog to digital OTA transmission, then the federal government must establish a funding mechanism (from the proceeds of the spectrum auction) for the digital migration.[85]

The Committee understands the industry leaders’ concerns about the costs of completely converting their analog facilities. However, it believes that it is vital for Canadian citizens in every part of Canada to be able to receive conventional television station signals free of charge.

4.8 Community Television

The Committee heard from several witnesses about the role of community television stations in providing local coverage. Some of these community television stations are run by BDUs, while others are independent.

The Broadcasting Act refers to community broadcasting twice. It establishes “community”, along with “public” and “private”, as one of the three elements of the Canadian broadcasting system.[86] It also states that the programming provided by the Canadian broadcasting system should include educational and community programs.[87]

In 2002, the CRTC released a policy framework for community-based media. The objectives of this policy are to:

• To ensure the creation and exhibition of more locally-produced, locally-reflective community programming.
• To foster a greater diversity of voices and alternative choices by facilitating new entrants at the local level.

The policy goes on to say “the role of the community channel should be primarily of a public service nature, facilitating self-expression through free and open access by members of the community.”[88] During 2009/2010, the CRTC is planning to conduct a public hearing to consider its current community policy and possible changes to it.[89]

Several BDUs described their involvement in community television. Mr. Lind of Rogers Communications said, “Community broadcasting paid for by the cable companies is quickly becoming the most respected source of truly local television in Canada.”[90] This kind of programming varies by market. Where there is no other television broadcaster, the community channel may be involved in a wide range of programming, while in larger markets, it complements the conventional broadcaster by covering high school sports, and city council meetings and by offering multicultural programming.[91]

Mr. Bissonnette of Shaw Communications said, “The government and the CRTC must fully embrace the potential of community channels to provide a diversity of voices through local news and local programming that reaches various geographic, cultural, and linguistic communities.”[92] Yves Mayrand, vice-president of corporate affairs of Cogeco Cable Inc., described the activities of TVCogeco in North Bay, Ontario. He said this showed here are solutions when the broadcasters feel they no longer have a business case for local programming. He went on to say, “We could do more if we had access to our own local resources for that purpose. Oddly enough, our local advertising is restricted by regulation.”[93]

In addition to the BDUs, the Committee also heard from independent community broadcasters.

Sylvain Racine of the FTCAQ du Québec agreed, saying, “The independent ... community television stations are part of the range of news voices and they need better financial support.”[94] He said the 2002 CRTC policy framework has not forced cable companies to fund the independent community television stations, yet if a cable operator maintains a community channel, it may deduct all or part of the percentage of its gross revenue that must go to Canadian programming. As a result, the situation of community television stations is uneven. He said an appropriate way need to be found to fund local, independent community television stations, and that the solution lies in the creation of a dedicated local community and access programming fund.[95]

Gérald Gauthier of the FTCAQ said that independent community television stations require $60 million — the same amount provided for the LPIF. Even if community producers have access to the LPIF, he asked: “How can $60 million be enough to meet the financial needs of both private broadcasters and community producers?”[96] Mr. Gauthier also asked that community television stations be permitted to air conventional, commercial and local advertising. He said community television stations need such new income sources to enhance the amount and quality of local and access programming, as well as to keep up with technological developments.[97]

Michael Lithgow, research associate for the Campaign for Democratic Media, testified that local programming improvement fund should be made available for use by independent community broadcasters.[98]

Catherine Edwards, spokesperson for the Canadian Association of Community Television Users and Stations (CACTUS), recommended that “the $120 million being spent yearly by cable companies on so-called ‘community programming’ be liberated for independently run community channels that are accessible to all, representative of their communities, and present in those communities.” She also called for non-cable BDUs to contribute to local reflection, for technological options to be explored so that DTH can carry local channels, that space be made on all BDU basic services for a national public access channel, and that an ombudsman's office be created within the CRTC to monitor the coherence of the CRTC's decisions and their impact on the community sector.[99]

The Committee also heard from Donna Skelly, a CHCH co-host representing a group of employees trying to save the station, which Canwest said it was considering selling.  She proposed community ownership, under which CHCH would be governed by a board of directors made up of “leaders and the people who understand the communities they live in.” The station would focus on news and information.  Financing would involve soliciting advertising from within the local business community.  She also said the local program improvement fund (LPIF) would play a critical role.  In addition, she proposed that a fee for carriage be collected from all the distributors carrying CHCH, with carriage being mandatory.[100]

In response, Peter Viner of Canwest Television said that the proposed format would not generate enough revenue and would have fewer viewers than the current fare.  Yves Mayrand of Cogeco Cable said that a community-owned station had been tried before and had not been sustainable.[101]

On the other hand, Lise Lareau of the Canadian Media Guild said the LPIF should be used to help support local ownership at CHCH.[102]

4.9 Aboriginal Television

During its hearings, the Committee heard testimony from the Aboriginal Peoples’ Television Network (APTN) and Northern Native Broadcasting, Yukon. It also received a brief from the Inuit Broadcasting Corporation. They pointed out the distinctive aspects of Aboriginal television.

The Broadcasting Act mentions Aboriginal peoples twice. It says “the Canadian broadcasting system should ... reflect ... the special place of Aboriginal peoples within [Canadian] society.”[103] It also says, “programming that reflects the aboriginal cultures of Canada should be provided within the Canadian broadcasting system as resources become available for the purpose.”[104] To support Northern native broadcasting, the Department of Canadian Heritage has the Northern Native Broadcast Access Program, which, among other things, supports the production of culturally-relevant Aboriginal programming.[105]

Jean LaRose, chief executive officer for APTN, pointed out,

APTN is a national network. We strive to reflect all aboriginal communities—first nations, Inuit, and Métis—and we act as a bridge between aboriginal peoples and the broader Canadian population. We deliver three separate regional feeds directed to the west, the east, and the north of the country, as well as a high-definition feed.[106]

APTN schedules 40.5 hours each week of distinctive northern programming, which it licenses from general revenues. These revenues come from the subscription fees earned from BDUs and from advertising. The northern broadcasting societies receive additional funding for this programming from the Government of Canada through the northern aboriginal broadcasting program.[107]

Mr. LaRose noted that funding through that program has not changed for many years. As a result, the northern broadcasting societies have not been able to stay current with technology and increased production costs.[108]

Stanley James, chair of the board of directors of Northern Native Broadcasting, Yukon said that his organization is funded through the aboriginal peoples program directorate of Canadian Heritage, and the this funding had remained almost unchanged since its creation. He went on to point out the problems this causes:

Static funding can only be translated as a decrease, as the cost of living and the cost of business escalate consistently each year. The changes to industry standards, particularly in high definition and digital radio, have an immediate impact on us. We have had to lay off personnel and close down our analog television production unit, putting seven people out of work.

Although advertising has augmented the funding from Canadian Heritage, in the current economic downturn, advertising revenues have dropped faster for us than they have for others throughout the industry. Business does not view the aboriginal audience in remote northern communities as a good investment for their diminishing advertising dollars.

New media, changing viewing habits, audience fragmentation, and convergence are having their effects on us. We have not had the necessary funding to meet the needs of a fast-growing youth population who do not view the world as our ancestors did. We need to be able to produce programming that interests the youth of today, delivering the programming in the media of today. As a communications network, we need to continue to play a critical role in keeping the language, culture, and customs of the aboriginal people alive and in use.[109]

Mr. James went on to say the federal government must continue to assist local aboriginal broadcasters and to assist in meeting the cost of digital transmission.[110]

The Inuit Broadcasting Corporation also noted the decline in funding in real terms. It said this resulted in a decrease in the amount of programming. It also made it difficult to meet broadcasters’ standards, to train staff, and to maintain adequate facilities. It called for a revitalized Northern Aboriginal Broadcasting Program.[111]

4.10 Educational Television

The Committee heard from Michèle Fortin, president and chief executive officer of Télé-Québec, Quebec’s educational network.  She pointed out that educational networks are often overlooked in the debates on the future of television. 

The Broadcasting Act includes two references to educational programming.  It says that programming provided by the Canadian broadcasting system should include educational and community programs.   It also says “... educational programming, particularly where provided through the facilities of an independent educational authority, is an integral part of the Canadian broadcasting system.”[112]

There are five provincial educational broadcasters: Knowledge Network in British Columbia, Access in Alberta, Saskatchewan Community Network, TVOntario/TFO, and Télé-Québec.

Ms. Fortin pointed out that because educational networks are not specialty channels, they do not receive the fees the latter enjoy.  She said that like other broadcasters, educational networks need adequate resources to carry out their mandates and expand access to new platforms. Unlike other networks, however, educational networks cannot rely on auxiliary sources of revenue. Ms. Fortin said:

It is thus vital that the educational networks not be excluded from any program that may be set up to assist the industry.  […]  It is also important that the unique features of educational networks be taken into account when new rules are formulated for funding allocation by the new Canada Media Fund.[113]

Regarding the distribution of educational networks, Ms. Fortin said:

[I]t is becoming increasingly crucial to ensure: that it be mandatory to distribute educational television networks on all platforms available in their province of origin; that educational networks be able to obtain distribution throughout the country if they so wish...; that the French-language educational networks be made accessible throughout the country, given the limited supply of French-language products for the country’s francophone minority communities; that Canadian networks’ HD television signals be given priority distribution by satellite throughout the country.[114]