Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 16 - Evidence - October 28, 2003
OTTAWA, Wednesday, October 28, 2003
The Standing Senate Committee on Transport and Communications met this day at 9:30 a.m. to examine the current state of Canadian media industries; emerging trends and developments in these industries; the media's role, rights, and responsibilities in Canadian society; and current and appropriate future policies relating thereto.
Senator Joan Fraser (Chairman) in the Chair.
[English]
The Chairman: Welcome to senators, to members of the public, and to our witnesses. This meeting of the Standing Senate Committee on Transport and Communications is being held to continue our examination of the state of the Canadian news media and of the appropriate role of public policy in helping to ensure that the news media remain healthy, independent and diverse in light of the tremendous changes that have occurred in the recent years, notably globalization, technological change, convergence and increased concentration of ownership.
[Translation]
Today, we welcome Mr. Luc Lavoie, who is appearing on behalf of Quebecor, where he is the Executive Vice- President for Corporate Affairs. His long experience in the public and private sectors, as well as within the media, are described in the biographical notes he gave us.
Many senators will not need to read these biographical notes, because Mr. Lavoie spent many years on the Hill and he is very well known around these parts. It is a pleasure to have you with us today.
Mr. Luc Lavoie, Executive Vice-President for Corporate Affairs, Quebecor Inc.: It is a pleasure for me to be with you today. I started out by working in this building. I was in Ottawa for 21 years and it is always a pleasure to come back.
[English]
I see good friends such Senator Graham around the table, and others. Thank you for welcoming me.
[Translation]
Since its creation 53 years ago, the small company which owned a neighbourhood weekly in the Montreal area has become one of the only Canadian multinationals with operations in over 20 countries throughout the world, with over 50,000 employees and earnings exceeding $12 billion a year. This phenomenal growth is based on a logical approach the company never deviated from, namely vertical integration.
The small neighbourhood weekly gave birth to many other weeklies and it was not long before Quebecor became specialized in so-called entertainment weeklies. As a result, it gave a voice and provided an outlet for a new phenomenon, which is taken for granted today, namely Quebec's famous ``Star System.''
After the war, Quebecers were exposed to the same culture as other Canadians, with a few exceptions. Their entertainment consisted in listening to Frank Sinatra, Bing Crosby and Vera Lynn, to name but a few.
They saw movies starring Cary Grant, Clark Gable, Grace Kelly and Esther Williams. As I mentioned, there were exceptions, but they were rare.
Towards the end of the 1950s, home-grown Québécois stars began to emerge. I was recently watching an episode on TVA of the magnificent series Musicographie, about the Michel Louvain phenomenon. It was fascinating to watch Quebecers discover, at the time, how one of their own could also be a successful singer. I am not sure it would be historically accurate to say that the Michel Louvain phenomenon was the starting point of Quebec's star system, but I think that it is fair to say that this reality really began to take root at the beginning of the 1960s, with the development of State television and the private television station which was Télé-Métropole — let us not name names — which we are proud to say is now one of our enterprises.
Pierre Péladeau, the brilliant entrepreneur who founded Quebecor, realized that this phenomenon was not temporary and that fans of Quebec pop culture were no different from American fans in that they wanted to know more about their celebrities. That is why Mr. Péladeau created the many entertainment weeklies which have served as a launching pad for many Quebec artists. Take Pierre Lalonde, Donald Lautrec, Michèle Richard, Renée Claude and so many others. They marked our youth with their unforgettable songs, which were written by authors such as Stéphane Venne, whom Quebecor is proud to have helped make a comeback in 2003. His comeback is even more successful than the first part of his career, when, 33 years ago, he wrote a song called Et c'est pas fini, which won a Félix for song of the year at the ADISQ Gala which was broadcast two days ago on Radio-Canada. People were touched and excited when Stéphane Venne came up to the microphone and spoke about his artistic resurrection.
The entertainment weeklies needed a reliable printer and Pierre Péladeau was the person who firmly believed that ``the only person you can count on is yourself.'' He gradually got into the printing business. Then he launched a new daily, Le Journal de Montréal, a tabloid which targeted the same demographic group. As a result, his printing needs increased considerably and his printing operations grew quickly. Today, that printing operation is called Quebecor World and it is the largest commercial printer in the world. The company prints the products of Quebecor, its dailies, its weeklies, its magazines, and books by Quebec authors printed by the company's publishers, but it also prints magazines like Time, Paris Match, as well as the multilingual IKEA catalogue, the telephone book of the world's most populous city, Mexico City, and one of the most popular books in decades, Harry Potter, to name only those.
All these weeklies, dailies and magazines needed a distributor, and thus Les Messageries Dynamiques was born. The printers needed paper and Quebecor entered the paper business by turning Donohue into the most efficient pulp and paper company in the world, before selling it to Abitibi Consolidated for the benefit of thousands of investors who believed in the undertaking.
In the 1980s, when the cable distribution industry was in full expansion, Mr. Péladeau seriously thought about investing in this area, but it was only after his death that Quebecor, under the guidance of his successor, Mr. Pierre Karl Péladeau, who stayed true to the company's growth and development logic, took advantage of the fact that another family of entrepreneurs from Quebec decided to sell Quebec's biggest, and Canada's third biggest, cable company to bring that project to fruition. Less than a year before his death, the company that Pierre Péladeau founded bought the third biggest mainstream television network in Quebec, Télévision Quatre Saisons. The acquisition was also in line with the growth and development logic which had guided him from the very beginning, an approach which at the time was called vertical integration. By the way, I want to point out that at the time of its acquisition, Télévision Quatre Saisons had a ridiculously small market share, had never generated a profit and was on the verge of bankruptcy. When Quebecor sold the network four years later, TQS — the Black sheep of television — as it had been renamed by Quebecor, had nearly doubled its market share. It was on the threshold of profitability and had added to the diversity of its editorial voices by turning its evening newscast into a must-see program for viewers.
During the stock market euphoria at the end of the 1990s, a new buzz word appeared in the financial and media jargon, namely convergence. This concept, which was rather vague, was supposedly a silver bullet. Convergence would marry content and distribution and lead to unlimited prosperity to anyone with the courage to blindly embrace it. However, convergence proved to be the death of a large French conglomerate, which was over 200 years old and specialized in the management of waterworks. Our big Canadian telephone monopoly invested billions of dollars, moneys generated because of its dominance of Canada's telecommunications sector, into convergence, and many other companies embraced the concept to a greater or lesser degree, with varying results.
For Quebecor, convergence was a natural fit: the approach it had adopted since its foundation, vertical integration, had metamorphosed into convergence. This did not prevent Quebecor from ploughing ahead. In 1998, the company bought Sun Média. The marriage of Quebecor's newspapers with those of the newly acquired chain made Quebecor the second largest newspaper publisher in Canada.
In 1999, Quebecor bought World Color Press, an American printer, and so became the world's biggest commercial printer.
In 2000, Quebecor bought the Groupe Vidéotron. Its assets now included a major cable company, the biggest francophone television network in America, an Internet company, another business and telecommunications company, and several major magazines.
In keeping with its cycle of growth, Quebecor then entered a consolidation phase, which unfortunately coincided with the stock market crash, thus rendering this particular phase more painful than we would have hoped. Nevertheless, the experience gained over five decades of growth through acquisition enabled Quebecor to weather this period of ``bad winds'' — to quote Stéphane Venne's magnificent expression, which the composer probably borrowed from Verlaine — better than most of its competitors.
Today, Quebecor's two pillars are Quebecor World and Quebecor Média. This two-headed structure provides investors with more stability, as evidenced by the past few years. During the time we were strategically reorganizing and repositioning the companies acquired under the Vidéotron transaction, Quebecor World was still growing and generating exceptional profits. But now that Quebecor World is going through a more difficult period, which is due to an economic slowdown and to the slow turnaround of the American economy, Quebecor Média has reached its cruising speed.
But let us now address the subject which your committee is interested in and which I would refer to as Quebecor Média's way of managing information. We have never tried or even wanted to centralize the management of information. The TVA network has an exceptionally competent editorial staff and our viewers seem to agree, since a very large number of Quebecers tune in to TVA and LCN each day for their news. TVA's information managers, whose competence is universally recognized, have complete editorial freedom. Newsroom reporters have only one obligation, which is to maintain the highest degree of professionalism while respecting the most rigorous rules of ethics.
Similarly, Le Journal de Montréal, our flagship in Quebec, and the most daily widely read by francophones in Canada, has a newsroom which is the pride of Quebecor. Over the last several weeks, a focused journalistic investigation has revealed the lies of a ridiculous sect, as well as painted the reality of visible minorities living in a so- called multicultural society. Our columnists, be they Michel C. Auger, Bertrand Raymond or Franco Nuovo, are references within the profession. As is the case with their colleagues at the Journal de Québec, the reporters of the Journal de Montréal are true professionals who go about their work with the greatest degree of freedom. The same approach applies to all the Sun newspapers.
When Quebecor acquired TQS in 1997, it promised the CRTC that the newsrooms of its newspapers and its television network would be completely independent from one another. A monitoring committee, accountable to the CRTC, was created to guarantee this independence. When TVA was acquired by Quebecor, the company, of its own volition, told the CRTC that it would apply the same concept of newsroom independence and that it would again have an independent committee monitor its activities. Up to this day, Quebecor has scrupulously respected its commitment in that area. This concept of newsroom independence is unique in Canada and no other so-called ``converged'' group has applied it.
Quebecor is a company which believes in freedom of expression and freedom of the press, and it gives its journalists all the freedom they need to provide their readers and viewers with a product of exceptional quality.
Not only do the company's directors deeply believe that a democratic society must be founded on a free press, but they realized a long time ago that it is in a company's interest to translate their beliefs into action. It is in the company's interest to follow through on this belief, because a highly decentralized approach allows each entity within the corporation to provide a product of such high quality that most citizens choose to come to us for their information, as the data have eloquently shown. I would now be pleased to answer your questions.
[English]
Senator Graham: Mr. Lavoie is an old friend. Welcome back to Parliament Hill.
We are impressed with the holdings and the work that Quebecor generally has done around the world as a business organization headquartered in Canada. You come to us as the as Executive Vice-President of Quebecor Inc. Is that the parent company or the holding company?
Mr. Lavoie: It is the holding company.
Senator Graham: Of Quebecor World and Quebecor Media?
Mr. Lavoie: Exactly, yes.
Senator Graham: Our friend, the former Prime Minister Brian Mulroney, is the chair of Quebecor Inc., Quebecor World or all?
Mr. Lavoie: The Right Honourable Brian Mulroney is chairman of the board of Quebecor World, the printing arm of Quebecor. He is also a member of the board of Quebecor Inc. and a member of the board of Quebecor Media.
Senator Graham: You own the Sun Media chain, which has eight daily newspapers, as I understand it. Do you have any idea of the total circulation of those eight daily newspapers?
Mr. Lavoie: I should know the answer to that, but I do not. In Montreal, our circulation is around 300,000 a day on weekdays. In Toronto, the circulation is around 260,000. In Quebec City, it is around 140,000.
Senator Graham: In Ottawa?
Mr. Lavoie: In Ottawa, I think we are in the neighbourhood of 65,000, but I could be wrong.
Senator Graham: Recently, you attempted to purchase some French radio stations in Quebec. You ran against a stumbling block in the CRTC. They denied approval. They were expressing concerns at the time about concentration and cross-media ownership.
We have heard from witnesses at this committee and elsewhere suggest that this is a reflection of a turf war between the CRTC and the Competition Bureau with respect to which body should have jurisdiction over which situations in broadcasting. Would you care to comment on that?
Mr. Lavoie: With all due respect, Senator Graham, it is hard for me to comment on something like that. The CRTC decided to deny us the licences for these radio stations. They said in their decision that what we were proposing to do with them did not outweigh — I think that was the language — what they saw as the downside of higher levels of concentration.
Beyond that, I am fully aware of the debate. I do not think I am in a comfortable position to comment on this. I would not interfere in that kind of turf battle, if such a thing existed.
Senator Graham: Would it be fair to ask you if you feel that either the CRTC or the Competition Bureau should have sole jurisdiction? Do you have a view on that?
Mr. Lavoie: Should our application have been approved? Is that your question?
Senator Graham: No. There is an overlap in a lot of areas between the CRTC and the Competition Bureau. I am wondering if one of the bodies, in your view, should have sole jurisdiction.
Mr. Lavoie: It is a fair question, but it would be a long debate. To tell you the truth, as far as we were concerned, this was not an issue. There was no turf battle involved.
If you recall the history behind this transaction, Astral Media bought those stations as part of a bigger deal. The Competition Bureau decided that there was something wrong and they asked that Astral Media sell part of what they had bought.
Following the decision by the Competition Bureau these stations were put on the block and Quebecor came up with an offer. We were not involved in a turf battle of any sort. I do not feel that I am competent to make a pronouncement one way or the other regarding who should have jurisdiction over this.
The Chairman: Let me ask some factual questions. If you have the answers with you, you can give them. If not, you can send them to us afterward, okay?
How many journalists do you have?
Mr. Lavoie: I checked yesterday. Sun Media has — give or take 20 — 1,000 editorial writers or personnel.
I got the breakdown this morning for TVA. I am very serious when I say that we do not centralize this aspect of the business. We do not. The notes that I received from TVA this morning is that we have 75 people working for the main network in Montreal. We have six regional stations with 10 people in Rimouski, 8 in Sherbrooke, 8 in Trois Rivieres, 9 in Chicoutimi and 19 in Quebec City.
I do not have the count for the magazines.
The Chairman: Sun Media?
Mr. Lavoie: Sun Media has 1,000.
The Chairman: Does that include the Le Journal de Montréal?
Mr. Lavoie: It does.
The Chairman: That is all of your print daily newspapers?
Mr. Lavoie: The urban dailies, the regional dailies, and the weeklies under Sun Media have 1,000 plus or minus 20 editorial personnel.
The Chairman: Do you have any idea what the trend line has been? Have those numbers been increasing or decreasing?
Mr. Lavoie: I think that it has been stable.
The Chairman: Could you check on that over 10 years? Chose a period long enough to avoid cycles that are related to the advertising cycle. That would be helpful.
Has Quebecor or any section of Quebecor taken any position on the matter of restrictions on foreign ownership?
Mr. Lavoie: Not really. We have never taken any public position.
The Chairman: Do you have any views?
Mr. Lavoie: I do, but do my personal views really matter?
The Chairman: Yes.
Mr. Lavoie: Foreign ownership is a concept that has a different meaning when applied to telecommunication or the media. If you apply it to telecommunications, one comes very rapidly to the conclusion that it has served the monopoly of Bell Canada extraordinarily well. As we speak, Bell Canada's monopoly in local telephony remains at 99.5 per cent in their territories, despite the fact that the Parliament of Canada has expressed the view that it should be open to competition. The CRTC is of the same view. It is there to implement the wish of the elected representatives of Canadians. Once again, the restriction on foreign ownership — in respect of telecommunications — is the best thing that exists as far as Bell Canada is concerned.
As applied to media, my personal view — and I will choose my words carefully — is that perhaps these notions do not have the same meaning in the 21st century that they had 25 to 40 years ago. I am not sure that who owns what and in what way matters any longer in respect of the quality of the product, the ethics involved and so forth.
I do not know that the Daily Telegraph is a better or worse newspaper because it is owned by someone from Canada. It is or it is not a good paper. That has very little to do with what citizenship the owner has or what passport he carries. That is my personal view.
Again, Quebecor has never participated in this debate because we do not think it is relevant to our business.
[Translation]
Senator LaPierre: Would you agree with what the Société de la langue française du Québec has said?
Mr. Lavoie: Pardon me, senator?
Senator LaPierre: Do you share the same opinions with regard to foreign ownership as the Société de la langue française du Québec?
Mr. Lavoie: Why not?
Senator LaPierre: If foreign companies had invested in Quebecor Média, do you think that you could pursue the mission as set out by Mr. Péladeau, which was to give a cultural voice to Quebec's francophones?
Mr. Lavoie: Why would it not be possible to do so? Quebecor's success is due to the quality of its products and to the fact that these products meet market expectations. The company's real owner is not really a factor. In our case, it is a moot point because there is not the shadow of a doubt that the company lies in the hands of Canadians and Quebecers.
The Chairman: It should be said that you are not representing the position of your company. You have stated this clearly and we got the message.
Mr. Lavoie: No, it is my personal point of view.
The Chairman: Your position is very interesting, giving your experience and your long career within media and in the public and private sectors. I have several other questions for you, but I will be patient.
[English]
Senator Merchant: Given the fact that your company has such a dominant position in the media in Quebec, and with other companies across Canada in a similar position, are you concerned that perhaps not every viewpoint is not represented in the media?
Mr. Lavoie: No, I am not.
Senator Merchant: Why is that? Do you not feel that if the same company owns all the different means of getting information, that there is perhaps a danger?
Mr. Lavoie: Well, I certainly do not see a danger today. I live in Montreal. When I wake up in the morning, I can have at my door the Journal de Montréal, La Presse, Le Devoir, The Gazette, The Globe and Mail and the National Post. Before I leave for the office, I can stop in my home office and read everything else on the Internet. I can switch on my television and watch the all news channels of both CBC and TVA, and I can watch Newsworld and CTV news. I can watch all the morning shows.
I am 48 years old and I do not think I have ever been exposed to so many sources. Compared with 25 years ago, I do not feel that there has been a reduction in the number of sources. I see more sources. I receive more news than I ever did. No, I do not share this preoccupation, as the situation stands now.
Senator Tkachuk: Mr. Lavoie, do you think that we require the CRTC?
Mr. Lavoie: Yes, I do.
Senator Tkachuk: Why is that?
Mr. Lavoie: I think that the airwaves belong to all Canadians and that it is a privilege when a licence is granted to operate as a broadcaster. Someone has to act, at the minimum, as some kind of adjudicator of who will broadcast on what wavelength and so on and so forth, at a minimum.
Senator Tkachuk: Could they be auctioned off?
Mr. Lavoie: It is a concept that might be considered, but I think we need a regulator. We do not want a situation where anybody can say anything over the air in Canada. We do not want all sorts of lunatics using the public broadcast system — by ``public,'' I do not mean state-owned; I mean the public broadcasting system — to broadcast any old stupid thing. In this way, Canada is no different than the United States, and most other western nations, for that matter.
Senator Tkachuk: Therefore, you are saying that the CRTC should be used as a vehicle to sell the airwaves, or to give permission to someone to use the airwaves, and to ensure that they are not used for hate propaganda or things like that.
Mr. Lavoie: At a minimum, yes.
Senator Tkachuk: If someone wanted to start a news channel, and the CRTC found that the applicant was of sound mind and body — had the money, was sane, had good business people — why should they not?
Mr. Lavoie: So far, the CRTC has demonstrated an open-mindedness that has never led me to think that way. People who come up with honourable, respectable, interesting projects deserve to receive a licence and I think that these groups have received licences.
I will worry about the kind of things that you are raising when I am faced with it, but I have not been faced with it so far. Historically, the CRTC has done an excellent job. I am sure I can be critical of one decision versus another, and I may agree or disagree with this or that, but overall, the CRTC has been an excellent regulator, compared with similar bodies in most other nations in the world. I would add that the Canadian broadcasting system, and once again, I am not referring to the CBC, which is but one important component of it, has turned out to be quite good, considering we are next door to the United States. We may have been overwhelmed by what is coming from there, especially in the nine provinces where English is the language of the majority.
I see that we have TSN, Newsworld, ESPN, CNN and cultural channels, et cetera. The Canadian system, with all its flaws and its positive aspects, has delivered to Canadians quite a good package.
Senator Tkachuk: If someone wanted to start a news channel in Edmonton, could they do that?
Mr. Lavoie: I suppose.
Senator Tkachuk: Dr. Allard wanted to do that a number of years ago. I remember the competition. The competition was not based on money or business. Dr. Allard was an extremely successful entrepreneur in Edmonton in the TV business.
Mr. Lavoie: I remember Dr. Allard.
Senator Tkachuk: He had larger audiences than the CBC. Yet, he was denied the opportunity for a news channel based on competition about the quality of the presentation. Why should it matter? Why should not the airwaves decide who gets to watch what news channel in Canada?
I am glad that we have the French language in Canada; otherwise, all the cable companies would be from Toronto. Right now, there are some in Montreal. The rest are all in Toronto.
Mr. Lavoie: That is not quite correct, with all due respect. I do not know that Shaw Communications is based in Toronto.
Senator Tkachuk: Shaw as a licensed cable deliverer. It does not broadcast.
Mr. Lavoie: It is involved in this as well.
Senator Tkachuk: They are all in Toronto.
Mr. Lavoie: I am not sure.
Senator Tkachuk: From the point of view of a western Canadian, a regulator is to ensure a diversity of opinion, to ensure people can get into the business, to ensure there is a level playing field, and to ensure that there people be competition in the market place. I am not denying that it has been good for Canadians in the sense that we compete with Americans and that people have to get into the cable business or the broadcast business.
However, I am concerned that the market is concentrated. The CRTC, which was supposed to ensure that it was not concentrated, is allowing it to be concentrated.
Concentration is cultural. Currently, all the cable channels emanate out of Toronto for eastern Canada. You can turn on to TSN, but I would like to turn on to ESPN. TSN is a Toronto cable channel. It has less to do with me than it has to do with Toronto.
How do we get around that problem?
Mr. Lavoie: That is a pretty broad debate. It reminds me, Senator Tkachuk, that I am in Ottawa now. I am not sure how to answer you.
In respect of the case of Dr. Allard, I would have to read the decision. You know better than I know why he was denied a licence.
We could go decision by decision through the CRTC history and agree and disagree with this one and that one. My comment was related more to my overall view that the CRTC has been successful in delivering quite a good balance.
You have travelled much yourself. When you are sitting in Pittsburgh or in Seattle, then sometimes you get mad at the fact that all the broadcasting comes from New York. I suppose, that when you are in Lyon, you get mad at the fact that it all comes from Paris. I could go on and on.
I am quite sympathetic to the frustration. I understand the historical roots of your frustration, and you express it well and with conviction. However, as a witness appearing here on behalf of Quebecor, I do not feel that this is an appropriate forum for me to debate those questions with you. I respect what you are saying.
During my career in Ottawa, I was chief of staff to the Minister of Energy, Mines and Resources in the years when the government decided to — you will remember this — to get rid of the National Energy Program. I travelled often to Calgary and Edmonton. In my years as a consultant, I had as a client a company now called EnCana; it was then called the Alberta Energy Company. I assure you that I understand what you are saying. I am quite sympathetic to it. Over the years on several occasions, I have discussed these issues over a few drinks with a few Albertans.
Senator LaPierre: Does Quebecor have any view on the questions you were just asked by Senator Tkachuk?
Mr. Lavoie: No.
[Translation]
Senator Corbin: Can you tell me a little more about what you do within the organization in your capacity as Executive Vice-President for Corporate Affairs?
Mr. Lavoie: It varies from day to day. Under its corporate structure, Quebecor Inc., whom I work for, is a holding company which controls the two other operational branches, namely Quebecor Media and Quebecor World. Quebecor's business culture is such that it basically shuns bureaucracy and the waste it entails. I am sure that many of you sitting around this table would be astounded at what Quebecor Inc.'s headquarters look like.
Quebecor Inc. has five employees. I have the honour of belonging to this group. There is, of course, Pierre Karl Péladeau, my colleague, Jacques Mallette, the other executive vice-president and the head of Quebecor's financial management operations, as well as Mr. Péladeau's chauffeur and secretary. We are a small group which, on a daily basis, works with our various branches to ensure that the budgetary and strategic objectives of each of our various companies is met.
Of course, part of my role is to participate in those many discussions. Since you who assiduously read newspapers, you have surely noted that I am the official spokesperson for the company with regard to any issue affecting Quebecor, be it financial, regulatory or other issues. I am therefore responsible for the company's communication policy within a structure which, in that regard, is almost unique in Canada.
The fact that a corporation the size of Quebecor has such a decentralized vision of management probably makes it unique. This approach is largely responsible for the company's success. My job description is no more specific than what I have just told you.
Senator Corbin: Would it be correct to say that you are mostly in charge of public relations?
Mr. Lavoie: It would not be wrong to say that I spend a lot of time on that aspect.
Senator Corbin: Mr. Lavoie, you insisted on the fact that there is absolutely no overlap between the print newsrooms and the television newsrooms. I cannot imagine that.
Ideally and in theory, that must be possible, but given the ``Péladeau culture,'' there surely must be a common denominator in the approach taken by the independent newsrooms, at least in practice.
By quickly leafing through any of your newspapers, I feel there is such a common denominator. In other words, they are typical Péladeau products.
Mr. Lavoie: That is the key to our success.
Senator Corbin: Yes, but success is a relative notion. Success can be measured in terms of the number of subscriptions or generated revenue. But I do not necessarily define success in those terms. Are you really insisting on the fact that the newsrooms are completely independent from one another?
Mr. Lavoie: Under the CRTC licence conditions, our print newsrooms must be completely independent of the TVA television network. An independent monitoring committee was created to receive complaints. This committee has the power to force us to answer any questions it feels are appropriate, following which it reports back to the CRTC.
I believe this committee was created, I repeat, in 1997, when the company bought Télévision Quatre Saisons, which has been renamed TQS, that is, in the fall of 1997, when the licence was transferred to Quebecor, until October 2001, when we sold Télévision Quatre Saisons to a consortium representing Cogeco and BCE.
No single complaint was ever upheld. Since receiving the licence for TVA, to my knowledge, there have been two or three complaints and none was upheld. We are extremely rigorous in applying that condition of the licence, because, on the one hand, it was imposed at our initiative — and I insist on the fact that it is unique in Canada, that is, other converged companies are not subject to the same rigorous conditions with regard to newsroom independence. It is truly unique in Canada. The licence was awarded under these conditions and it is in our interest to ensure that they are respected, which they will be.
Senator Corbin: You say that this newsroom independence does not exist elsewhere because you are the only ones who made that commitment to the CRTC. But how do you know, in the ordinary course of business, that this independence does not exist elsewhere? When you make that assumption, are you targeting a group in particular? Do you have anyone in mind? We are not naive, we know that the Asper group tried to impose a kind of editorial uniformity on its papers.
Are you absolutely certain that this newsroom independence is not practiced elsewhere? Let me take this matter one step further. A former journalist for the Telegraph Journal, one of the papers published by Brunswick News in New Brunswick, one day stated, in answer to criticism that Irving interests controlled public opinion in New Brunswick, that, in fact, Irving did not get involved in its newsroom operations and that they were strictly run along a business model. The Irving family also owns television stations.
Mr. Lavoie: And a fishing camp.
Senator Corbin: Excuse me?
Mr. Lavoie: I said: A fishing camp. It was a joke. I admit it is a bit gratuitous, but I am sure that Senator Corbin has a sense of humour.
Senator Corbin: Well, with certain companies, you have to go on a fishing expedition in order to get information. I was given the impression that the media newsrooms belonging to the Irving empire were completely independent from one another. How can you say you are the only ones? Have you conducted a systematic study of the situation?
Mr. Lavoie: Not at all. I am simply saying that, from a structural, legal and regulatory point of view, we are the only company subject to these licence conditions. However, I should add the following. We are the ones who proposed that the CRTC impose these conditions on us, which it did. I have nothing to say about how other Canadian corporations run their affairs.
Senator Corbin: All that being said, I do not believe in the absolute independence of the newsrooms.
Senator LaPierre: I would like to talk about French-language communities outside Quebec. Do you have any radio or television stations outside Quebec?
Mr. Lavoie: No.
Senator LaPierre: However, you do business with cable companies outside Quebec, do you not?
Mr. Lavoie: From sea to sea, yes.
Senator LaPierre: Do French-language communities outside Quebec have access to your programs if they have cable?
Mr. Lavoie: Yes.
Senator LaPierre: Are you working on any projects to better serve French-language communities outside Quebec through relay stations?
Mr. Lavoie: We are not working on any projects per se, but apart from cable, which can deliver TVA's signal, there are also Hertzian waves. For instance, TVA is broadcast in the Acadian region without cable. In Eastern Ontario, which has a very lively francophone community, people also get TVA. I cannot say there are other projects, but I know that we have a very strong connection with francophone communities outside Quebec.
The program Salut Bonjour has the highest ratings by far within the francophone community. A while ago, for a week, it was even produced in the Acadian region and broadcast from there.
And we cannot forget the Wilfred Lebouthillier phenomenon, the grand winner of Star Académie, who hails from Tracadie-Sheila. The event created an extraordinary rapprochement between Quebecor's products and the Acadian region.
[English]
Senator LaPierre: I would like to ask you about the Internet. Do you think the day will come when you get up in the morning and, instead of opening your door to pick up the seven or eight newspaper you have on the porch, you will go on the Internet an read all the news of the day there without ever physically holding a newspaper?
Mr. Lavoie: No, I do not.
Senator LaPierre: Why?
Mr. Lavoie: Why? Well, I love books. I think you too are a book lover, Senator LaPierre. A couple of years ago, people were talking about the crazy, late-1990s notion of e-books — electronic books. We would download books and read them on some kind of a hand-held screen. Obviously, that did not happen. There is a physical relationship between the reader and the object that is being read. I do not know how to describe it, but I need to have it in my hands. I want to have it in my hands.
The Internet will always be there and will always be a source of information. As many of you do, I quite often during the day click on my Internet and read the latest headlines and so on. However, when I want to read an in-depth analysis of world affairs, I open The Globe and Mail or I read the Journal de Montréal and The New York Times and those newspapers. I do not know why. Perhaps it is because I am getting older, and maybe my children will not feel the same way, but I do not see the day when people will abandon newspapers and go strictly to electronic sources of information.
Senator LaPierre: One of the difficulties of reading on the Internet is that it is difficult to curl up with your laptop. It makes life a little complicated.
What do you think will be the impact of the Internet upon the so-called ``traditional media'' of television, radio and newspapers? Will there be an impact?
Mr. Lavoie: There is an impact.
Senator LaPierre: Already?
Mr. Lavoie: Yes, a major impact. Essentially, the Internet has accelerated the movement of news enormously. It has a positive side and a negative side. The positive side is that you can find out what is going on instantly. You can be updated almost every minute if you know how to navigate on the Internet and jump from one site to the other. It is amazing how fast news can travel the world.
The negative side — and you are talking now to a former journalist — is that you are pushed for speed so much that you do not pay as much attention to details as you used to, because you have no time to do so.
What the Internet is doing to news, the all-news channel is also doing to news. We have seen major news events unfolding on television and things being announced and denied every five minutes, and sources saying one thing and then denying it. Anything goes, because it is live television. I am not even condemning it; it is just a fact of life.
However, when I was a TV reporter in the early 1980s, broadcasting live from a disaster zone was a very complex thing in terms of hardware, transmission and technology. Now it is child's play. It is so simple; it is amazing. It is mind- boggling. They get there with such light equipment and — boom — they are on the air instantly.
The downside to this is that they will do anything to get on the air and put any reporter live on the air because of the competition. Once again, I am speaking as a former journalist, you watch it all unfold and sometimes it is literally funny. You will hear them make a statement with great authority and 10 minutes later the completely contradict themselves without apology and they just keep going and going. I do have sympathy for them; it is not easy to this plug in your ear and different sources keep streaming in.
The Internet has the same type of effect. You are pushed constantly. The Internet is not only pushing the world of news; it is pushing our lives. We have to live faster than ever. Everything moves faster. Everything moves by e-mail. People are no longer willing to wait two days for a letter to arrive; they want it right now by e-mail. It is never fast enough.
On the one hand, it is positive that information is moving faster than ever and people are in a position to talk to one another easier.
Senator LaPierre: The Internet will not replace all the news media?
Mr. Lavoie: No, I do not think so.
Senator Merchant: We are talking about the way we are getting news and how we like to get the news.
How you see young people engaged. Are they engaged at all? Are they interested in the news aspect or news information? Do you think they are? If so, how do they like to get their news? Do they like to get a newspaper? Can you tell by your subscribers whether your audience is older or younger?
I am thinking about the newspapers. I do not think young people are so tactile. We like to hold the newspaper or a book. I am wondering how you see the future when you say that you see the newspaper still as part of the way that we communicate the news. How far forward are you looking?
Mr. Lavoie: Well, we are of a generation for whom all-news channels are still something that is a marvel. My 16- year-old was born two years before Newsworld and six years after CNN. I suppose that for that generation, an all- news channel is just a fact of life. That is the way news moves; that is the way they are informed.
I do not know if I can specifically answer your question. I would just express the hope — and I do my best to teach this to my children — that the printed word will remain something important in their lives. Whatever it is they read, what really matters is that they read. Whatever books they choose to read, what I really care about is that I want to know that they read books. I guess what I am saying now applies to newspapers as well.
I do not know if the statistics still hold, but a few years ago a study indicated that only 34 per cent of Quebecers read at least one daily a day. In English Canada, it was closer to 40 per cent. That is a very low figure. We are talking about one daily a day. I confess that, as many of you must be, I am a bit of a news junkie. I read between five and seven dailies each day. I also confess that it is a bit crazy, and it is pretty close to an addiction. Sometimes I try to get rid of it, but I cannot. It is hard for me to understand how you can evolve in a complex society like ours and be a well-informed citizen if you do not read a newspaper a day, whichever one it is. I think one must know what is going on in the world. I am not factually answering your questions, because I do not have those figures.
The readership of theJournal de Montréal is very broad. Our sales teams base their sales pitch to advertisers on the basis that the paper covers almost the entire spectrum of society. It was originally created as a blue-collar paper. One would say that a blue-collar paper would appeal to the lower middle class and unionized workers. However, that is no longer true. The Journal de Montréal has the same demographics as La Presse. In fact, they are broader one because they go further into the lower middle class. We are covering the entire spectrum, young and old. We are proud of that.
I have been a full-time employee of Quebecor for three years now. A couple of years prior to that, I was a consultant with them. The magic of Quebecor is that some of the senior guys have a feeling for what is happening in society. They have a feeling for what people expect.
Pierre Francoeur, the president of Sun Media, is a low profile, down-to-earth guy. He is the kind of guy who will never boast and or condescend. However, if you say to him, ``Do you think this will work?'' He will say ``Yes'' or ``No,'' and he is generally right. At Quebecor, there is a fundamental understanding of where society is. Our success, of which we are proud, can be explained by that.
Senator Graham: This is a supplementary to what Mr. Lavoie just said. Mr. Lavoie, your reference to the importance of reading newspapers, books and papers and being informed is an eloquent testimony to your values. I congratulate you for that.
For the record, we have been provided information from the Web site of Quebecor. In our earlier conversation, off the record as we greeted each other, I thought that you said that total revenues for Quebecor World were about $8 billion. The Web site tells us that it was $9.8 billion for 2002 with 39,000 employees. The Quebecor Media total revenue was $2.3 billion with 14,000 employees. The grand total in terms of revenue is $12.1 billion actually.
Mr. Lavoie: That is correct. I said $8 or $9 billion, Senator Graham. I was pretty close.
The Chairman: Referring to the readership profiles that you were discussing with Senator Merchant, could you let us have some data on that?
Mr. Lavoie: Yes.
The Chairman: As you note, these are not secret numbers. These are numbers that a newspaper tries to show people. It would be helpful if you could let us have for both the French language papers and the English language papers data on circulation, readership, income levels, age levels, language, occupation, frequency of reading — if there is such a thing. I do not know if you have that. However, it would be helpful.
Mr. Lavoie: I will provide you with everything that is available to the public.
The Chairman: It is helpful to us to understand what is happening.
As a supplementary, I understand that Quebecor, like others, is heavily engaged in the business special supplements or freebie, giveaway papers to attract young readers, which suggests a consciousness there.
Mr. Lavoie: I agree.
The Chairman: We have to do something special. We just cannot assume that youth will come to the same product that they always came to. Is that accurate?
Mr. Lavoie: Our `` freebie,'' to use your expression —
The Chairman: That is colloquial.
Mr. Lavoie: That is correct. We like to call them something else, but that is what they are. They are free newspapers distributed in the subway in the morning. They are given to everyone, including the youth that are going to the CEGEP or college. If it is helpful in convincing them that that being informed through reading is a good thing, then so much the better.
[Translation]
The Chairman: I was not asking a question, but I reserve my right to ask questions. Senator Corbin is patiently waiting.
Senator Corbin: My question may seem naive, but why are there no accents on ``Quebecor''?
Mr. Lavoie: I do not know the answer, but I think that Pierre Karl Péladeau does write the word with an accent. I know that, officially, there are no accents. I think it is the same issue with Céline Dion who, on her English recordings, does not include the accent, whereas she does on her French recordings. I imagine that, because we are an international company, the decision was taken to remove the accents. But I have to admit that I was not involved in that decision. However, as with you, I note that there are no accents. But ``Quebecor Média'' does have an accent on the letter ``E'' in the word Média.
Senator Corbin: Has the Office de la langue française du Québec ever gone after you?
Mr. Lavoie: No.
Senator Corbin: I was just curious.
The Chairman: Here is my question: who sits on the monitoring committee? How many times a year do the committee's members meet? And what measures have been adopted to make the public aware of its existence? Does the public even know that it exists?
Based on my experience as a former journalist, I cannot believe that the committee has only ever received three complaints. Any media outlet receives tons of complaints.
Mr. Lavoie: You cannot confuse the role of the monitoring committee with that of Radio-Canada's ombudsman. The committee was not struck to look into complaints about the quality or content of information. This committee was created to monitor the independence of news gathering operations.
I would be surprised if the public complained to this committee; any complaints would come from the newsrooms themselves. The journalists who are involved and their unions guard their independence very jealously and would fight to the death for it. It is more likely that complaints would come from within the organization. There is nothing really to prevent the public from filing a complaint with the committee, but its raison d'être was to make sure that the newsrooms operate in complete freedom, just like they did before they were integrated within Quebecor.
The members of the committee are Michel Héroux, a former journalist with Radio-Canada, Denis Tremblay, former vice-president of the Canadian press, and I forget who the third person is, but I will get you that name. The committee only meets when there is a complaint. It does not meet regularly, as its work is based on whether a complaint has been received or not.
The Chairman: Since you have told us that the committee has been created to address the complaints of journalists, are they reminded periodically about the existence of the committee?
Mr. Lavoie: That is not necessary, because they are fully aware it is there.
The Chairman: However, the fact remains that the newsroom independence stands in conflict with the principle of convergence. It seems to me that makes sense. I will mention an example which has already been raised several times on this committee, namely Star Académie, an event which received a great deal of coverage on TVA. The print media also devoted a great deal of coverage to the show, and it even made the front page of the Journal de Montréal and the Journal de Québec.
Mr. Lavoie: It also made the front page of La Presse and Sherbrooke's La Tribune.
The Chairman: But I am referring to your newsrooms. Unless I am mistaken, Quebecor even boasted of this fact. The message it sent out was that it was a package deal. But is it possible to have a package deal and independent newsrooms?
Mr. Lavoie: Star Académie was proof that it is possible. There was no interference with regard to editorial independence. You are right, the event made the first page of the Journal de Montréal, but it also made the first page of Sherbrooke's La Tribune, as well as the front page of many other newspapers, some belonging to the Gesca group, including a paper in Chicoutimi. Star Académie was basically an exceptional phenomenon. On Easter Sunday, three million people watched the same TV show, one which celebrated francophone songs. I think you must agree with me that this was an exceptional phenomenon.
The Chairman: Are you sure there was no coordination among the newsrooms? No contact whatsoever, no planning meeting, nothing?
Mr. Lavoie: Between the newsrooms? There was nothing.
The Chairman: Between the managers?
Mr. Lavoie: It's clear that Quebecor Média has a managing committee whose members are the CEOs of the company's various subsidiaries. Believe me, we discussed this matter at great length, because, from an economic point of view, Star Académie was the biggest investment made in a project in the history of television in Quebec. I can assure you that we discussed the matter at length. Newsroom independence has nothing to do with advertising space in various media. We feel that the word convergence was more or less imposed on us. We were talking about integration. This has been Quebecor's modus operandi since 1950. In our view, integration is just another name for cross promotion. It basically comes down to saying that the Journal de Montréal's advertising space was to a great extent used to promote Star Académie. The Journal de Montréal's advertising space was to a great extent used to promote the rising stars of Star Académie. This is a good thing, because it advances francophone music. Star Académie was a celebration of French music. With their huge capacity, our media promoted the event, and we are proud of their ability to do so. We are proud of the fact that our media promote artists who then go on to sell 565,000 CDs.
I am sorry if I seem to be all over the place. We also talked a lot about the illegal downloading of musical files on the Internet. This problem has hit Quebecor hardest. Why? Because we are the biggest music distributor, that is, the biggest music wholesaler in Quebec with a market share of over 70 per cent. We are also the biggest retailer because the groupe Archambault belongs to us and it has a market share of nearly 30 per cent. We are also music producers.
Global music sales have fallen by about 30 per cent. The music business is changing dramatically. But in Quebec, music sales in 2003 fell by 25 to 30 per cent under the global average. Why is that? Because 565,000 Star Académie CDs were sold. That means CDs sold and money spent on Canadian products, on Quebec products. The CDs included songs written by Stéphane Venne, Jacques Michel, Pierre Létourneau, Nanette Workman and Angelo Finaldi, all Quebecers. The musicians on the CD were also Quebecers, including Scott Price, who conducted the orchestra for Charles Aznavour during his last world tour. He is from Montreal. He wrote the music for Star Académie. Homegrown photographers designed and developed the booklet. We are extremely proud to have made such a huge contribution to the dynamic Quebec culture. But culture is more than just moments of anxious and sleepless creation. It is also a business. Artists create products, but they also have to be broadcast. With Star Académie, Quebecor helped francophone music, which is basically a major Quebec export.
Just look at the success of Quebec singers in France and throughout the francophone world. We have provided francophone music with a showcase the likes of which has not been seen in at least a decade. As long as Star Académie was broadcast every Sunday, between 2.5 and 3 million viewers were glued in front of their television sets to watch Quebec singers sing Quebec songs. That increased CD sales.
Dany Bédard is making a name for himself. He is an extremely promising writer and composer, and his songs are well crafted. Until recently, Mr. Bédard was hardly known to the public. But after appearing on Star Académie one evening, his CD sales surged. And when this happens, it basically means that Quebec's entire music industry flourishes.
When the newspapers in the Quebecor group gave Star Académie a great deal of coverage, that was something quite extraordinary. What they were talking about, was our music, our artists and all the work that was being done. I brought in some press clippings. I had fun looking at them, knowing this was an issue that concerned you, Madam Chair.
I had a good idea: I read the transcripts of some of your earlier meetings. There was a great deal of coverage of Star Académie in La Presse as well. And La Presse is not part of our group. There was a great deal of coverage in The Globe and Mail as well. I will repeat this for the third time: we discussed this phenomenon with a tremendous amount of pride. There was also some very critical coverage in the Journal de Montréal. There were some pretty nasty articles in the Journal de Montréal. I was reading them yesterday in preparation for this meeting. Some people at the Journal de Montréal did not like us very much.
The Chairman: Perhaps you could leave your file of clippings with the committee.
Mr. Lavoie: I would be pleased to do so, but I would point out that it is a biased selection. I chose the articles with a view to answering your questions.
The Chairman: I did not ask for an encyclopedia, just a sample.
Mr. Lavoie: I would be pleased to do that. This article is from the Sherbrooke Tribune, which belongs to Gesca. The headline on the first page was: ``Long Live Wilfred the First.'' That was the headline. The Chicoutimi newspaper, which is owned by Gesca, said: ``Frenzy.'' Why did we discuss this so much in the Journal de Montréal? Because it was an extraordinary phenomenon of Quebec society!
The Chairman: We are trying to understand the institutional dynamics that exist in various cases and Star Académie was an event, as you say. That is why it is mentioned.
I would like to ask you another question, Mr. Lavoie. Has Quebec ever had or considered having a statement of principles to guide its journalists regarding what they should do in their work without regard for the other interests of their owner? The reason I ask the question is that I have asked it of others, because we have heard from two former newspaper publishers, from different companies, who explain that when they worked for large companies a statement of principles of this type had been helpful to them, because everyone understood the rules of the game. There are certainly others who did not choose to proceed in this way. Has Quebecor ever considered such an approach?
Mr. Lavoie: No.
The Chairman: Why?
Mr. Lavoie: Because this is the first time I have heard about such a suggestion. We certainly do not see any need for such a statement of principles. Our journalists, in the large Quebec dailies at least, are unionized. They have very serious collective agreements that protect their independence, which is exceptional compared to that of other journalists in the western world. You worked in the Montreal media for a long time, Madam Chair, and you know that it was a well-known fact in this milieu that the journalists at the Journal de Montréal probably had the best collective agreement in the business, and that includes independence.
I fail to see what a statement of principles, as you have described it, would add. I fail to see why journalists would need such a thing and I have never heard them say they would like to have a statement of principles of the type you described.
The Chairman: Is Quebecor involved in the Quebec Press Council?
Mr. Lavoie: Yes.
The Chairman: I come to my last question:
[English]
Quebecor is a closely held company. The family control two-thirds of it.
Mr. Lavoie: Yes, the family holds 67 per cent of the voting shares.
The Chairman: What difference does that make to the company?
Mr. Lavoie: In what sense?
The Chairman: In any sense? Does it make any difference in terms of the cost of capital that you raise or the priorities you set? Does it make any difference to the freedom from or vulnerability to any kind of pressures? I am trying to understand what that ownership means as Quebecor goes through the daily life.
Mr. Lavoie: In terms of corporate governance it is certainly very clear who is in charge. You could compare our situation with the situation of a company that is very widely held with no controlling shareholder, I am of the opinion that the best possible package is to have a controlling shareholder because the controlling shareholder's interests are to ensure that the company will succeed. He has everything invested in it.
I have referred several times during my presence here to the corporate culture of Quebecor. I said that we were allergic to bureaucracy, superstructures and committees for this and that. Quebecor cannot stand that kind of approach to business. We tell our shareholders that the money is invested in a smart way. We do not waste money on this kind of thing.
This kind of corporate culture can be maintained, and we are proud of it, because there is a controlling shareholder there. If we did not have a controlling shareholder, this culture would probably disappear. When you are in my position at the holding level, the temptation is always there to hire some other consultant and create a committee to advise you on this and that.
At Quebecor, you do not do that because the controlling shareholder would not tolerate it. The controlling shareholder is also at the root of the culture of the company.
Why is it that our dailies are so successful? It is because somebody, somewhere, understands what the market is expecting. That is the controlling shareholder. There is something that comes from Pierre Péladeau, the founder, that has been transmitted to his sons. They are the two controlling shareholders, and Pierre Karl is the CEO. That will probably keep moving down the generations. I hope so. I hope so because Quebecor is a very exciting company to work for. It is a company that should make Canadians proud.
[Translation]
The Chairman: Thank you very much, that was most interesting. I hope you will send us the additional information we requested. I must tell you that you are brave to come alone. Few people appear before parliamentary committees alone. It is always impressive to see that.
Mr. Lavoie: I knew I would be among friends.
The committee is adjourned.