Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 12 - Evidence for March 22, 2005
OTTAWA, Tuesday, March 22, 2005
The Standing Senate Committee on Transport and Communications, to which was referred Bill C-18, to amend the Telefilm Canada Act and another Act, met this day at 9:32 a.m. to give consideration to the bill.
Senator Joan Fraser (Chairman) in the chair.
[English]
The Chairman: Honourable Senators, the committee is undertaking today its study of Bill C-18, to amend the Telefilm Canada Act and another act.
[Translation]
It is our great pleasure to welcome, for the first time at this committee the Honourable Liza Frulla, P.C., M.P. Minister of Canadian Heritage. We welcome her most cordially.
The minister is joined by Mr. Jean-Pierre Blais, Assistant Deputy Minister, Cultural Affairs. We also have with us Ms. Lynn Foran, Director, Policy and Programs, Film and Video.
Could you identify yourself, sir?
Mr. Charles Bélanger, Chairman of the Board, Telefilm Canada: I am Charles Bélanger, Chairman of the Board, Telefilm Canada.
The Chairman: Welcome.
[English]
Thank you all for joining us this morning. Special thanks to the minister, who only got back to Ottawa at 2:00 a.m. today. It was a wonderful occasion, for those senators who do not know, when our colleague, Senator Lapointe, won a Genie last night, and the minister was there.
[Translation]
Madam Minister, I presume you are familiar with our way of conducting our business. We would ask you to first make a few preliminary remarks. Afterwards we will have a few questions for you and your colleagues.
[English]
The Honourable Liza Frulla, Minister of Canadian Heritage: Thank you. You have a text before you, but since we have an hour I will abbreviate it and then you can go through it, because the text is describing some good things that we do in Canada. We should remind ourselves that we do have a very vibrant industry, and I would have loved for you to have been with me last night at the Genies to see how much talent we do have, talent we must keep here. Those talented people want to work in Canada, but the fact is that if they do not have jobs here, of course they will go to the United States. We should nurture our talent, so that is why we are supporting them.
[Translation]
You are currently undertaking a study on Canadian media, more specifically on the issues of convergence and integration, and I am looking forward to hearing your conclusions. We will begin our study with your report, which will give us food for thought in our own work. We will not begin our study immediately, but rather wait for your report to be tabled before we begin.
It is an honour to appear before you today to discuss Bill C-18, an Act to amend the Telefilm Canada Act and Another Act. I believe very strongly in the importance of Telefilm Canada. Indeed, I spent a good part of my career in the cultural sector, as Minister of Culture in the Government of Quebec, as someone who worked in broadcasting, and now as the Minister of Canadian Heritage. Whatever role I played, I must tell you that I have always had a great deal of respect for the important cultural institution that is Telefilm Canada.
For close to 40 years, Telefilm Canada has been fostering the growth of Canadian feature film industry, as technology and public policy have evolved. The organization has kept pace with these developments and has conceived and delivered quality programs in the areas of television, new media and music.
[English]
Telefilm Canada supports hundreds of audiovisual projects across the country. This funding helps foster and promote the Canadian film television and new media industry.
[Translation]
These investments also help to lever additional funds from the private sector, as well as from some provincial support programs. This has generated numerous direct and indirect jobs in every region of the country.
Thousands of Canadians screenwriters, directors, producers, distributors, technicians, performers and multimedia designers have been able to pursue their careers in Canada and enrich our cultural landscape thanks to the existence of Telefilm. Some 225,000 Canadian men and women are employed in the audiovisual sector, an important component of Canada's knowledge economy. These talented and creative people create cultural goods that we are able to export around the world with pride.
Through its offices in Vancouver, Toronto, Montreal and Halifax, Telefilm fosters regional productions which not only lead to considerable economic activity, but also reflect the diversity of our great country. Telefilm endeavours to invest in the highest-quality works that have the best chance of reaching Canadian audiences and that contribute to the long-term sustainainability of the industry.
Since its creation, Telefilm Canada has supported some 4,000 productions, 1,000 feature films, 1,300 documentary programs and series, 700 drama programs and series, 300 children's series, 300 variety and performing arts programs, and 250 new media products.
Canadian films are winning honours around the world and enjoy untold success. Les invasions barbares won the Academy Award for best foreign language film in 2003, and Atanarjuat, the Fast Runner was recognized at the 2001 Cannes film festival. Séraphin: Un home et son péché was a box-office phenomenon.
[English]
Mambo Italiano is the most successful English-language Canadian film ever, making audiences laugh in more than 50 countries. Telefilm Canada is also an important partner of the Canadian Television Fund, investing approximately $140 million a year in quality Canadian television production.
[Translation]
Aside from its remarkable contribution to the film and cultural industries, Telefilm Canada has also been involved in the new media sector since the late 90s. It made an important contribution to television programs such as Degrassi and The Toy Castle, programs that are becoming more and more popular. Telefilm Canada has supported the development and production of unique Canadian content by using the magic of the new media.
It is also a part of Telefilm's mandate to invest in English, French and aboriginal-language productions. It also has the mandate to encourage francophone productions in minority communities. It invests in productions by both large companies and small and medium-sized enterprises. Most of its clients fall into the latter category. The role that Telefilm plays in this regard is remarkable. Nonetheless, the current context means that the Telefilm Canada Act does require amendment, which is why we have introduced Bill C-18.
Honourable senators, the Auditor General identified an inconsistency within the existing legislation and the actual activities carried out by Telefilm Canada over the years. The bill you are studying will correct that inconsistency. The bill formally extends Telefilm's mandate to cover the entire audiovisual sector, including film, television and new media, as television and new media were excluded.
As I mentioned a moment ago, Telefilm has evolved over the years, entering interrelated fields that strengthen its role in the film sector.
However, its legislation has not kept pace. Bill C-18 addresses that shortcoming, confirming Telefilm's activities in law. It amends pre-existing legislation to reflect the current reality. Telefilm's programs and activities will remain the same; only now they will be more completely stated in the Telefilm Canada Act, as they should be.
As well, I also want to mention the bill's ``validation clause.'' This important mechanism ensures that past activities in television, new media and sound recording are considered valid in law. In the course of the legislative process around Bill C-18, the observation has been made that perhaps the time has come to modernize the Telefilm Canada Act.
I am pleased to tell this committee that once this bill has been passed, the modernization of the act will be the next step.
[English]
In conclusion, I would like to underscore the fact that it is the Government of Canada's policy to ensure that Canadians have diverse Canadian cultural choices. That means we must invest in the cultural institutions that support our artists by helping them to bring their works to life and by enabling them to reach their audiences more effectively. Telefilm is one of those institutions.
Telefilm is also a wise investment. It serves its purpose admirably. It serves creators well and it serves Canadians well. It plays an important role in helping to get Canadian cultural products developed and marketed. Now, with the changes in Bill C-18, it will be able to continue to do its job in the future and respond to the concerns of the Auditor General.
If members of the committee have any questions, we will be pleased to answer them.
Senator Tkachuk: Thank you, Madam Minister. I have a number of questions. From what I understand, Telefilm has been involved in all kinds of cultural investment opportunities outside of film itself. You mentioned music, television and —
Ms. Frulla: New media.
Senator Tkachuk: New media. How much does Telefilm spend on music? When you say ``music,'' what do you mean? Do you mean the actual production of music, do you mean support for people who sing?
Ms. Frulla: First, I want to remind honourable senators that when Telefilm was founded, it was for the film industry. It was founded in 1967, and the need then was to support Canadian films. Then, in 1983, television was added because television production was becoming more and more important. Television production was being supported by the department, so the government decided that it should be put in the same place.
In 1998, new media were added. We have to understand that new media will take on more and more importance with the evolution of technology and the convergence of the Internet, for example, with the telephone. Now we are producing only for the Internet, and this is a sector that will probably expand.
Telefilm is investing $6 million to help support the music industry, basically for the production of records. Telefilm supports not only the individual artists but the industry as well.
Mr. Bélanger: If I may, I can provide further clarification. The program Telefilm administers at this time is called MEP. It is a program designed to finance companies and not projects per se.
Senator Tkachuk: What do you mean by ``finance companies?''
Mr. Bélanger: We do make investments in production companies that make music, sound recording companies. It is a small amount of money at this point.
Senator Tkachuk: However, you want to spend more?
Mr. Bélanger: No, that is not what we are aiming at. This is a new program that was put in place four or five years ago. It helps at least a dozen Canadian sound recording companies to invest in their own future. It was not meant to cover past debts or to try to cover cash flow problems, but really to ensure that they would have an action plan to position themselves in the future.
Senator Tkachuk: Let us sort this out. When you say ``production companies,'' are you talking about the actual music companies that invest in artists who then go to a recording studio and record, or are you talking about the recording studios themselves and production houses that receive cash for producing the record; not the production but the actual hardware of making records? Is that where the money is going?
Mr. Bélanger: Yes, absolutely.
Senator Tkachuk: There are production companies all across Canada. This is not new. They have been here for 30 years. Is this not an economic advantage for those who are building new production companies in competition with the ones that already exist?
Mr. Bélanger: What do you mean?
Senator Tkachuk: There are recording companies in Saskatoon, in Vancouver, in Winnipeg. Would not the ones you have invested in be in competition with some of those?
Ms. Frulla: We are investing in all those companies.
Senator Tkachuk: They all get a cheque?
Ms. Frulla: No, only if they apply and they fit the program. They can all apply. We are not creating competition with existing companies. If they apply and the program applies to them, they all have access to Telefilm's help.
Senator Tkachuk: That confuses me even more. The recording companies already exist, so all of them can apply for a grant to produce a record or to buy equipment? Is that what it is all about?
Ms. Frulla: There are different programs, and they are complementary to other programs we have. Remember that we consolidated our budget in the Tomorrow Starts Today program. Through that program, we also provide financial help, but different kinds of help for different programs in the music sector.
Telefilm invests in industry. Telefilm will not invest in an artist. This is for the arts council, or there are other programs that invest in the artist. Telefilm will invest in the industry to help make it stronger. That is what the $9 million does. If a company wants to either modernize or increase its market, then it can apply. This includes all companies across Canada.
In the music sector, 1,000 new Canadian recordings are produced annually, and the vast majority, 84 per cent of them, are produced by Canadian-controlled labels. We are trying to support the Canadian industry, because if we do not, we will be chewed up.
We are not the only country doing that. France does it, all the industrialized countries do it in different ways, and the United States does it massively.
In order to have our own industry, we must be prepared to help. There are about 45,000 people involved in economic production and distribution in the music industry, Canadian music artists and entrepreneurs, who depend upon the Canadian recording industry to create. In film, editing and music they need our help.
Senator Tkachuk: I want you to understand, minister, I am not arguing about the validity of supporting Canadian artists.
Ms. Frulla: I am happy to hear that.
Senator Tkachuk: I do not think I left the impression that I am arguing against that validity. The bill restructures Telefilm to reflect what it has been doing for the last 20 years and to allow for this expansion of Telefilm's business opportunity, or to justify its expansion.
I am trying to obtain some information as to where the money is spent and how much is spent. This is reasonable to ask about the music business. I would like to know where it is spent, what parts of the country are accessing the money. I do not need speeches about how great Telefilm is. What I want is information.
Ms. Frulla: That is what we are doing; we are giving you information. Telefilm has offices all over Canada. It is not a Toronto-based or a Montreal-based Crown corporation. It is decentralized across Canada.
This bill is presented to you to validate what has been done. This bill is validating the past. The Auditor General is saying that because of different activities added on since 1983, we are supporting activities that are not in the founding bill of Telefilm. That is why we are presenting this bill.
Bill C-18 does not modernize Telefilm; it only supports the activities and the status quo of what Telefilm is doing.
Senator Tkachuk: I want to know where the money for music has been spent.
The Chairman: Is there a regional breakdown?
Ms. Frulla: Absolutely. Telefilm has an annual report with the content of all its activities.
Senator Tkachuk: Can you give me that information?
Senator Chaput: I have the annual report here. On page 30, under music, it talks about the Music Entrepreneur Program and the amount of money that was disbursed to 13 recording companies, providing support for implementation of forward-looking business plans. Both established and emerging companies received financing. It also talks about a market study.
Senator Tkachuk: Perhaps you could tell me in which provinces or regions the money was spent?
Ms. Frulla: Listen, we can provide you with all the information and details that you want. There is no problem. Telefilm has all of the details. You must understand that we do not know everything that we are investing by heart.
The Chairman: We will have other witnesses to address this subject, senator.
Honourable senators, I observe that the minister must leave us in about half an hour, and just about everyone is on the list.
Senator Carney: Welcome to the committee. I wish to follow up on the chair's point about regional breakdowns. The filmmakers in Western Canada tell me frequently that they do not feel that the West gets a share. Traditionally, two thirds of the spending is done in Anglo-Canada — if you want to use that old-fashioned phrase — and one third in francophone Canada. In the meantime, there has been a burst of activity in Vancouver in filmmaking. Could you provide us with a regional breakdown over the last few years so we can answer this criticism?
Ms. Frulla: Absolutely.
Senator Carney: Turning to the bill, there are two areas that I am interested in. My twin is a filmmaker, so I know something about this.
Ms. Frulla: We do have now more and more demand for regional productions, and very good ones. It will be a pleasure for us to provide that information.
Senator Carney: Why has it taken 20 years to validate what Telefilm is doing? Is that because it is an agency and beyond the reach of Parliament, or is it sloppy government supervision?
Ms. Frulla: No, I would not use the word ``sloppy.''
Senator Carney: I am not saying it is your position at all, but why has it taken 20 years to address a situation of doing things that are illegal and not in the mandate? This has not occurred on your watch, but why has it taken 20 years?
Ms. Frulla: Telefilm has been doing what it has been doing for years, and it has been done competently.
Senator Carney: That is not the question.
Ms. Frulla: I know, but these activities have been added on. It took, most probably, a red flag in the recent past to say, ``Oh, I think that we should restructure the bill to validate this.'' Mr. Blais has been there for years.
Senator Carney: I used to be President of Treasury Board and I know you cannot —
The Chairman: Senators, you are trying to badger the minister.
Senator Carney: Chairman, I am not badgering the minister. I have a question about the wording of the bill, which does not cover the mandate. I want to know, quite civilly — it is not on the minister's watch — what happened. As a former President of Treasury Board, I want to know how an agency can spend money for 20 years on an area for which it is not mandated. That is a legitimate question.
Ms. Frulla: First of all, it is not 20 years. Television was added on, and television was part of the audiovisual business. We could argue that audiovisual production went into the mandate of Telefilm. Then new media came in. New media are new technology. New technology meant they had to adapt. We are correcting this and ensuring that what Telefilm does, it does legally.
Mr. Jean-Pierre Blais, Assistant Deputy Minister, Cultural Affairs, Canadian Heritage: Honourable senators, the difference between feature films and television was screen to screen, and at the time nobody really focused on that difference. The new media are an extension of television.
It was in 2001 that the government asked the question. Telefilm had an infrastructure in place to deliver the Music Entrepreneur Program. People saw this for the first time and took a second look at it.
Keep in mind that during this period, Parliament amended Telefilm Canada. It used to be called the Canadian Film Development Corporation, and suddenly we called it Telefilm Canada. Even then, no one saw that we perhaps had slipped into areas that were not in the essence of the mandate.
When the Auditor General mentioned it to us in 2003-04, because of the change of government, we could not bring the bill forward then. At the first opportunity, we recommended to the minister to bring the bill forward to make the correction. Throughout this entire period, the Auditor General did not see it either, yet the facts have not changed.
Senator Carney: Under the mandate and the powers of Bill C-18, changes are made to promote the development of the audiovisual industry in Canada. The existing definitions do not mention television, as you pointed out. The definitions deal with Canadian feature film, Canadian feature film production, film activity, filmmaker, film production and film technician, and you are repealing that part.
In new proposed subsection 10(1) it talks about the mandate to promote the development of the audiovisual industry, but there is no definition of what an audiovisual industry is. Why could you not put a definition in the bill so that this mandate problem would not arise? ``Audiovisual'' does not normally cover sound production. Audiovisual is a catch-all word, I would say. It is not defined in this bill. Should it not be?
Mr. Blais: The standard drafting approach has been to use the ordinary meanings of words. ``Audiovisual,'' you are right, has a meaning that includes television, film and new media. It is not the intent that that provision should encompass music. In fact, music is dealt with specifically in proposed section 10 as something supplemental. When we talk about audiovisual, we really mean films or television or new media. It is screen based. It is a form of art that gives the impression of motion. That is the ordinary meaning coming from the dictionaries.
Senator Carney: Can you tell us where music is in this bill? I do not see it.
Mr. Blais: I will point that out to you in a second here — clause 10.
Senator Carney: I am looking at the bill before us and I cannot see that what you are trying to do is reflected here.
Mr. Blais: That would be in the amending clause no. 4.
The Chairman: It is on page 3 of the bill, senators, line 12.
Mr. Blais: This is where, in addition to the mandate in audiovisual production, we would give the opportunity to the sound-recording industries to enter into contribution agreements with the department.
Senator Carney: You have included sound-recording industries, but I am pointing out that we should have a definition in this bill of ``audiovisual,'' otherwise you will have a mandate problem in the future, particularly with new media, as we are not sure what they are. That is not the way to write legislation.
Ms. Frulla: We have a broad mandate based on the definition that the industry is using, and not only in Canada but universally. That is why we have maintained the term ``audiovisual.'' It is hard also to foresee in new media what will be coming out in the future.
Senator Munson: Good morning. The Auditor General's 2004 report notes that the expanded operations of Telefilm Canada with respect to television, music and new media were covered by a memorandum of understanding and contribution agreements. Does this not remove parliamentary approval from a significant change in the operations of an agency covered by federal law?
Mr. Blais: The contribution agreements would have been done with the department. Therefore, the parliamentary appropriations were coming from the Department of Canadian Heritage, and therefore, they would have had parliamentary approval for those. Under reviewed, audited financial accountability, that is normal within the department.
Senator Munson: Now the real nice questions: You said that modernization of the act will be the next step. Can you give specifics of what that modernization will be about, what your next step will be?
Ms. Frulla: First of all, we will answer the Lincoln report. In the Lincoln report we are talking about the whole of the audiovisual industry. We are also trying to see how our Crown corporations are dealing with that. Should it be CBC, Radio-Canada, Telefilm, francophone television? They work well together, but how they can foresee the future? That is why, after tabling the Lincoln report, we will get into a discussion with all the interveners on those elements.
The Heritage Committee is now looking at film and drama in the English milieu, at certain specific answers, out of concern for dramas in English and the production of dramas in English.
Having that in hand, plus the Lincoln report, then we will be in a position to work with our different Crown corporations to see how best they can cooperate to foresee the future of new media, and also the challenge of the future.
Senator Munson: How do you work in the province of Quebec when you have the Bloc Québecois indicating that culture is a provincial matter?
Ms. Frulla: I was cultural minister under the Liberals, and culture is not a provincial matter. The Supreme Court established that culture is a shared matter. I have to tell you — this is very important — the provinces are our partners. All provinces do invest. Not all equally, but they do all invest. For example, the Government of Ontario increased its tax credit to encourage either indigenous films or films coming from co-production or productions coming from outside to be shot in Ontario. B.C. did the same.
It is the combined action of both governments that makes an industry strong. When the provincial Conservatives and Mr. Harris came on board, they considerably reduced the assistance from 1992 to 2002, and that had a very negative effect on the industry and, I would say, the creative activity of that province. The current government is trying to recuperate from the 10 years of letting things go under the Conservative Party in that province.
We always have to think that at the end of the day there are jobs. It is not only creation, there are jobs. There is an industry, and there is also, for governments, tax recovered from this industry to go back into public funds.
Senator Munson: Is it a level playing field across the country? I am trying to follow up on the questions asked before. There may be a perception that it is not a level playing field in finding where the money is, how to get money and to go about creating a new film. Do you feel it is not politically driven?
Ms. Frulla: It is politically driven, but it depends also on some provincial counterparts. I have to tell you now, in 2005, there is un regain d'activités and a belief that this industry is important. I feel it all over Canada, but it was not always the case.
The Chairman: May I intervene here to get clarification? You said it was politically driven.
Ms. Frulla: Publicly driven, public policy. In light of the context, some believe it more than others. If you consider Quebec, Quebec believes in it because it is a question of protecting our language, culture, the only francophone entity in the Americas. Of course the Government of Quebec is investing, and all governments combined are investing tremendously in culture. It makes Quebec a definite partner.
As I say, Ontario is coming up to par. B.C., especially with 2010 coming, now has some plans to invest in culture, and Manitoba does it beautifully. In Saskatchewan there is a definite support for television and film. It is all of us together, and that is why I say it is a shared commitment.
Senator Munson: Short question: Telefilm Canada does not make any money. It is not in there to make money?
Ms. Frulla: No, not at all.
Senator Munson: What is the return?
Ms. Frulla: It is not there to make money, but not to lose money either.
Senator Munson: What is the return?
Mr. Bélanger: The return is a recoupment policy on investment of roughly $200 million. We recoup roughly between $20 and $25 million, which is plowed back to finance future developments.
[Translation]
Senator Chaput: Telefilm Canada must reflect the cultural diversity of Canada. How is that reflected in the bill we have before us today?
Ms. Frulla: It is in the act which established the corporate body Telefilm Canada. Telefilm Canada also has the mandate to encourage francophone productions, including francophone productions in minority, aboriginal and anglophone communities, throughout the regions. This bill maintains the status quo, and so maintains Telefilm's mandate. This bill simply introduces a technical amendment which will ensure that Telefilm Canada may fulfil the mandates it already has. In other words, this bill corrects past shortcomings while ensuring that Telefilm Canada's mandate is well stated in this bill for the future.
Senator Chaput: So it is subject to the Canadian Multiculturalism Act, the Official Languages Act and to the Employment Equity Act?
Ms. Frulla: Absolutely. It must respect part VII of the Official Languages Act and the Multiculturalism Act.
[English]
Senator Johnson: Welcome, minister.
I understand that the legislation is calling for an updating process. What will this do to our future film industry? I find there are not enough good features being produced in English Canada.
I run a film festival in Gimli, Manitoba. Our biggest challenge is finding family-friendly films to show in public. At the same time, I have been involved with this industry for quite a while. I am supportive, but I am concerned that outside of Quebec, which is producing some superb films, many of which we have used at my festival, this new emphasis of 62 per cent of the budget for television, music and new media will affect film production. What will the future be in terms of monies given for that purpose, which is the original intention of Telefilm?
I understand that new media are critical in terms of the developments of the future, but I am concerned as well about filmmakers. I know last night's Genies were terrific, but again, Quebec is producing the best films in this country right now, with a few exceptions. That is my experience in going across Canada looking for films for my festival.
It is a concern amongst filmmakers, directors and producers. In provinces where many American film companies are coming to make films, there are many tax reductions, which I believe is affecting the film industry as well. I am looking more to the future. I know this proposed legislation is necessary because it regularizes what has been going on for some time.
Can you give me any answers in terms of the future and what kind of focus there will be on film features, even though money is going to other areas that have done significant things in the arts and culture of this country?
Ms. Frulla: Telefilm adopted a policy in 2001 to double its box office in English Canada.
Last night, 60 per cent of the nominees were French. It is hard to compare because the context in French is very different, as you know. There is less competition in Quebec. Quebec has built a definite star system. If you offer Quebecers a big American production or a Quebec production — and for me television and film are complementary — they will choose a Quebec film, if it is a good one. The box office share now is more than 20 per cent. The success of those films attracts millions of viewers in a small market. They built a star system. That is what we need also in English Canada: a Canadian star system.
For that, we need not only the support of the government but the support of the media. We have to build that support. This is one condition for getting better films. We also need more attention and better distribution. We had the same problem in Quebec 20 years ago. Film distribution was scarce. There were good films, but they lasted only two or three weeks because the Americans brought in their films and kicked ours out. The Americans consider us to be a domestic market. It is exactly the same for English Canada.
Now the distribution is better because the films are light; they do have an audience, so the cinemas are interested in showing those films.
There is a problem in English Canada with films and dramas, not only in feature films but in television. They go together. What makes the industry so strong in Quebec is that people watch their French television and French television productions, and it brings them to appreciate and be willing to pay for Quebec film production.
In English Canada, they both go together. That is why the heritage committee is doing a report. They are doing interviews all over Canada to try to seize the problem.
As far as Telefilm goes, Telefilm has had a policy since 2001 to double its box office in Canada. It has an objective. What does that do? It also orients Telefilm in its choice of scenarios, for example. It is conscious of the fact that it is hard for the English market because it has to compete with American productions. ``Hard'' does not mean not feasible. On the contrary, it is a challenge, and we have to seize that challenge.
Senator Johnson: I understand what you are saying and I know what has evolved. I am very concerned, this proposed legislation aside, as to the direction Telefilm will take in the future in terms of funding of films with Canadian content.
There are better films coming out of Australia, and even out of the Nordic countries, if you are talking about our culture and our stories. It is not in French Canada, but in English Canada. I am emphatic about this. I am in the business in a small way in my other life; I am trying to run a film festival to expose rural Manitobans to new kinds of films, to French films, to subtitled films from Nordic countries and Iceland. I am struggling with the Canadian side. I wanted to put that on the record because I support totally the need for Canadian films. That is why I am wondering about the financial side and how much money is going to these other activities.
I understand that television is important as well, but if you look at who is watching Rough Cuts and The Passionate Eye, or Canadian films on television, it is 14 per cent of the population in Canada.
Ms. Frulla: I will let Mr. Bélanger talk about the policy. In terms of the modernization of Telefilm, everything is in the script. Telefilm now is looking at putting more into the research and development part. Let's face it: that is what they do in the United States. They do research and development, and go to research companies just to see if it tackles ``la bonne fibre sensible.'' They come back and readjust.
In Canada, we sometimes do not have the means to do that research. What happens is we take a chance. You see it on the screen, and if it is a success, it is a success, but we do not have the means to be able to go as far in research. When we talk about modernizing Telefilm, that is what we are all talking about.
Everything is in the script.
Mr. Bélanger: If you go back a little in history, to 10 or12 years ago, the box office in Quebec was the pits. It took a little while before people finally understood that you had to invest in script development and in the story itself; it starts with a good story. Then it is the cast, a good production, distribution and marketing and so forth.
The aim of the 2001 policy is to make sure that all the components in the chain are well linked and solid in their own areas. However, we have been very serious about investing more in script development, and we are starting to see some results in English Canada, to be honest with you.
When I came to the helm with my colleague, the executive director, three years ago, the English Canada box office was roughly around 0.6 per cent. In less than three years, we have more than doubled that. We are at 1.8, which is not perfect, but it has only been three years. You have to be patient. An industry that takes years just to produce a film cannot be turned around in three, four or five years. We need to be constantly reminding our producers and our creators that more efforts and more money should be devoted to building a good story.
This is exactly what is going on. We are hopeful that what you are preoccupied with will be answered over the next period. We have to be confident in ourselves. We have to be relentless. We have to be patient and make sure that the best scripts win the day in terms of public financing.
Senator Trenholme Counsell: I want to ask something based on the background information in your speech, minister, and it concerns children. There is reference to financial assistance and strategic leverage in the industry; it lists a number of items and one is children's shows. In your speech, I noticed that 7.5 per cent of the productions, 300 out of 4,000, have been for children's series.
[Translation]
I would like to hear about your intentions, your vision concerning children's programs for the future.
Ms. Frulla: Telefilm Canada supports projects. Telefilm Canada does not create projects, as you know, but supports projects. As for children's programs, we do not earmark a set proportion of our funds for specific objectives, say 7 per cent, and if we go beyond 7 per cent on children's productions, it's over; quite the contrary. As we have extraordinary children's literature in Canada, we should be able to produce extraordinary audiovisual projects for children on television and in film. Indeed, several of these films have already been awarded prizes throughout the world.
So, it simply depends on the will of those on the outside, producers, to produce films or programs, but especially films for children. That said, the CRTC obliges the networks to broadcast. We know, for instance, that Radio-Canada and CBC must also broadcast television programs aimed at children and toddlers.
As I was saying earlier, the system is interconnected. The CRTC obliges our public corporation to broadcast content for children, so there is a need for content. Telefilm Canada is there to support production of various kinds, including production for children. So everything is interrelated. In that regard, on the topic of the modernization of Telefilm Canada, everything will depend as well on the greater synergy we hope to see in the future.
Yesterday we were talking to the new chairman of Telefilm Canada and we confirmed the fact; children's productions are one of our claims to fame. So we have no problem with supporting more production for children, it is simply a matter of the market, the production houses, the stakeholders, deciding to go in that direction. There is an increasing demand for content for children, both on state television and on certain specialty networks. The greater the demand, the greater the experience that is acquired, and the better for all of us. It is what you might call a virtuous circle.
[English]
Senator Trenholme Counsell: I hope you will use your very important voice, minister, across the land to promote this and make a difference.
Senator Eyton: Welcome, minister, and colleagues. I was a little shocked. I was an early investor in Porky's I, II and III, and I thought it had been the most successful Canadian production ever. I am not proud of it. I had a very modest return, but it did make a little money.
The bill before us does two things. First, it subjects Telefilm to the Financial Administration Act, and everyone will applaud and agree with that; second, it enlarges the mandate to conform to what Telefilm has been doing. That is at least questionable, in the sense that it has taken 20 years to look at it and see that it did not have that authority.
I would like to follow the money, if I can. What share of the heritage department budget would be occupied by Telefilm? How important is it in relation to your overall departmental operations?
Ms. Frulla: Our budget is approximately $3 billion, out of which $1 billion goes to CBC and Radio-Canada. Then there is $2 billion to cover the whole sector. We have the most Crown corporations. We have 22 Crown corporations and agencies, including Radio-Canada, and that means museums and so forth. If we take museums out, we are working with approximately $1.2 billion, out of which the total budget of Telefilm Canada is $250 million.
Senator Eyton: We have $250 million coming to Telefilm. I am curious about the budgetary process. We are looking at what you are doing now and trying to make it right in the sense of extending the mandate. With respect to what you are doing right, I assume the senior management and the board at Telefilm have a plan every year; is that correct?
Mr. Bélanger: Absolutely.
Senator Eyton: Would that plan be precise enough to allocate so much for film, TV production, music and for what you call the ``new media?'' Does it go into that detail?
Mr. Bélanger: Absolutely. This plan is developed in conjunction with the officials in the department, so we are working on the same wavelength and trying to achieve the same objectives.
Senator Eyton: I assume the minister is involved, but the debate would also involve the board of Telefilm, who would be fighting for their share?
Mr. Bélanger: First and foremost, the plan is developed by management, questioned by the board, presented to and discussed with the officials of the department and approved at some point, as we did yesterday in Toronto. We had a board meeting to approve the business plan for 2005-06, and the accompanying budget, so that we could start on April 1 on the right footing.
Senator Eyton: There is an overall allocation within that annual plan.
Mr. Bélanger: That is right, and there is more than an annual plan. There is a three-year outlook and a five-year corporate plan that is in discussion with the department. It is an ongoing process. It is not a small exercise on a yearly basis only.
Senator Eyton: I know, but you must approve particular expenditures on an annual basis. Now I have a bundle of money; let us say I have something set aside for music in your plan. I would be curious as to the ratio of successful applications, but what is the process for selecting the happy beneficiary who will be financed and how do you reject someone? I am curious as to how it actually happens on the ground. I have someone in Orillia, Ontario, who wants to make a film. Tell me something of the selection process.
Ms. Frulla: Can I add a little information on what Mr. Bélanger just said? It is an arms-length corporation, as you know. As any government, we cannot make any suggestion about or approbation of creative content. What we can do is what we discussed before; we can, in the broad plan, say we are doing immensely well with children's productions; should we focus more this year on this part and less on others that are not as successful for us?
We talked about scripts. The board says it thinks we should invest in good story scripts, so that goes into their plan. I am not there to say I agree with Porky's or not, but we look at the broad picture and say, ``Well, this is the industry; how can we market ourselves within this industry?'' That is our contribution to Telefilm.
Also, you cannot forget CTF, the Canadian Television Fund. Telefilm is putting up approximately $5 million for television, but we also have the cable money. This is a rule of the CRTC, so the cable companies do have to put money into production. Then there is the CTF, where Telefilm is also part of the Canadian fund, and this also distributes money that goes to production. I will leave Mr. Bélanger to tell you how they succeed.
Mr. Bélanger: Whether it is music, films or television programming, we receive on an annual basis roughly 1,000 applications, which must meet certain criteria. These are not barriers to entry per se, but they are expectations that if they want to be funded, they must go through a process: the script would be questioned; the casting would be questioned; the financing structure would be questioned. We are trying to get the best projects out of this analysis grid. We finance those that, in our best judgment, expertise and experience, would fit the marketplace and meet Canadian expectations.
Senator Eyton: What is the percentage? You said 1,000 applications; how many are successful?
Mr. Bélanger: We roughly finance between 35 and 40 long and short films. I do not recall exactly the number of television programs, but we would finance a fairly large number of hours. It is not per program; it is per hours. I would say that we must contribute to at least 1,000 hours, with our colleagues at the Canadian Television Fund, to make sure that there is Canadian content in four genres. This is what Telefilm and the CTF finance. It is not everything on Canadian television; it is what was called way back then the ``underrepresented categories'': Canadian drama; children's programming, which the minister alluded to; documentaries, which are a Canadian feature, there is no doubt; and variety and performing arts programming. These are the four categories where public money is really behind television programming.
In music, the difference is we are not financing projects, but financing companies that apply according to a certain grid, and they must validate their —
Senator Eyton: Are they part of the 1,000 applications?
Mr. Bélanger: Yes, they are part of it. It is quite a huge undertaking, to be honest with you. We are very proud to be part of this Canadian culture environment, and we try our best to make sure that Canadians get the maximum for their tax money.
Senator Eyton: In general terms, what percentage of the total cost would you fund in these many applications?
Mr. Bélanger: The public sector money represents between 50 and 60 per cent of the cost of production. That includes tax credits as well. Telefilm usually puts in between 20 and 25 per cent of cash that goes into production.
The Chairman: Minister, I would like to follow on from Senator Carney's questions about governance and clarity.
You have explained to us that this bill is a tidying-up transition measure. I note with some interest that the old bill was not very satisfactory in terms of definitions either; it defined ``Canadian'' but did not define ``feature film.''
Would it be reasonable to expect that when you come forward with modernizing legislation, we could look for rather more specific definitions about the fields in which the corporation or the agency or whatever new body we are talking about will be operating?
Ms. Frulla: I am not promising we will define ``audiovisual.'' It depends on the way technology goes; it is changing so fast now that we have to project what it will be in five years. I met with the president of Bell Canada consumer marketing, and even they are saying that now you will have movies on your computer screen that are made for the Internet. They are being made now — series done for the Internet and shown to the world — so how do we adapt?
That is why it is difficult when you are talking about modernizing — there are new technologies and also new patterns for our consumers. Youth are using that. I do not and I do not know if you do; I am still with my television, but they do not compartmentalize. You are saying, ``Will we have a better definition?'' I can only promise that when we present that modernizing bill to you, it will reflect what Telefilm is doing.
The Chairman: That is what we are talking about.
Ms. Frulla: When Mr. Blais said that we have to technically readjust the bill, I had the same questions as you. Why now? Why not two, five, six or ten years ago? Sometimes you get on a roll and you need a red flag to stop you.
The Chairman: The Auditor General says ``pay attention.''
Ms. Frulla: Yes. I appreciate your question. We are doing it, but if there is another bill, it will reflect the activity of the Crown corporation.
The Chairman: My second question has to do with what has been happening. There seems to be general agreement that whatever the old bill meant by ``feature film,'' it did not stretch quite as far as Telefilm has been going. The actual programs that Telefilm has been administering have not been a secret. It has not been a rogue operation. This has been before Parliament.
We understand that this bill is technically necessary. We have been told by the appropriate authorities that the definition no longer works, but in terms of what the agency has been doing, am I correct that there has been the normal budgetary oversight and authorization by Parliament to do all these things?
Ms. Frulla: Absolutely. It is in their annual report. It is in their three- and five-year plans. They have appeared before the Heritage Committee frequently. In my personal analysis, it took the Auditor General to say, ``Wait a minute.'' I have only been here six months, but I do not think it is due to bad intentions because everything is so public. We just needed someone to make us realize.
Senator Tkachuk: I will just make a comment, and Senator Carney will get to the nub of the question that concerns us. You talked about the star system in Quebec and its relative absence in English Canada. I would like to remind you that in English Canada, Michael Boublé, Bryan Adams, Martin Short, Dan Ackroyd, Michael Fox, Keiffer Sutherland, Jim Carrey, Alanis Morissette, Rich Little, Paul Anka, Neil Young and Paul Schaffer are all cultural icons, Canadian stars. Just because they work in American movies does not mean that they are not Canadian.
Throughout all of Canada, we have a star system that we should all be proud of, none of which has to do with Telefilm.
Ms. Frulla: If you ask Canadians whether Paul Schaffer is American or Canadian, I am not sure that people would instantly say that he is Canadian. The same is true of Dan Ackroyd. It does not mean they are not proud Canadians. We met Canadian actors yesterday who work in Los Angeles who said that they want to work in Canada and would even work for less here.
If that is their will, let us take advantage of it and make it happen.
Senator Carney: The minister said that the flaw in the mandate was identified in the year 2003-04. It should be noted for the record that it was flagged by the Juneau commission in the mandated review of Telefilm in 1996.
The chair has offered a possible solution to the problem that some of us have with the lack of definitions in this bill. You are removing the definitions that flow from the mandate and you are not replacing the definition clauses. For instance, the word ``music'' is not defined in this bill. There is no definition of ``audiovisual,'' ``sound recording'' or ``Canadian corporation.'' We are being asked to pass a bill that is an empty shell.
We have two options. We can reject this bill until it has a definition clause, or we could take the chair's suggestion that a commitment be made within a specific time frame, such as one year, that this will be corrected. Without a specific time frame, it goes on and on.
There is no definition of ``music industry'' in the bill. The music industry is not a sound-recording industry.
I would vote for this bill, chair, if we could have that clarification. I do not know if it is in the French version of the bill, but we need a commitment, otherwise this is a flawed attempt to correct a flawed bill.
The Chairman: The minister did say that the new legislation would give very specific —
Senator Carney: She did not say when. She said if she brought it in.
The Chairman: No, she said when, but she did not say when that would be.
Ms. Frulla: Exactly. I cannot commit to when a new bill would be brought in.
The Chairman: What would your deadline be?
Ms. Frulla: That is difficult to say. It could be within a year and a half. We have to work with the Department of Justice to get specific definitions. This was approved by Justice. ``L'enregistrement sonore'' means the music industry in our jargon. If the Department of Justice makes it more specific, so be it, but we draft bills with Justice. We do not draft bills on our own. It has to be in concordance with what has been done in the past and with how the provinces define ``l'enregistrement sonore.''
[Translation]
How do you define sound recording? In Quebec, that is how we refer to the music industry. I cannot define the music industry if our definition is not in keeping with the definition in other provinces.
The Chairman: It is the recording industry, but excludes the live-performance industry.
Ms. Frulla: It is not performance, either: we help sound recording. It is not assistance to musical performance, nor to artists. But assistance to sound recording has a meaning and a scope which exists as well in the definition agreed to by the provinces as a whole and the world in general. It is in keeping with our activity.
[English]
Senator Carney: If sound recording is a broadly defined area, then state that. Bring forward a definition, but to ask us to replace a bill because the mandate is flawed with another bill that does not define the mandate is asking a lot.
In terms of drafting it with Justice, that does not impress me; all bills are drafted with Justice. The fact is this bill does not, in the wording, do what you say it does.
I appreciate your efforts on it, but I have to have some idea of what Telefilm Canada's mandate is. You are bringing forward this new bill without any definitions of anything. There is no definition clause in this bill. I cannot support it.
Ms. Frulla: On this bill and this correction, permit me to disagree, but I will let Jean-Pierre Blais speak.
Mr. Blais: With respect to the notion of sound recording, there are a number of pieces of legislation, and I am thinking particularly of the copyright legislation. The definition of ``sound recording'' is inherent in that federal statute, and therefore you have to read it in concordance. It is a certain definition. Some people from Justice are here. I understand your preoccupation that there may not be definitions, but as I said earlier, the legislative drafting style is to take the ordinary meaning of the word, which is supported by other federal legislation in this very field. It is a related field, it is at the heart of the federal jurisdiction over culture — the copyright legislation — and the notion of sound recording is in fact defined because there is a neighbouring right associated with sound recordings.
Senator Tkachuk: Just so I am clear about the definition, if you do not mind, chairman. The minister said earlier that when you talk about audiovisual it is difficult because everything is changing. What you are saying is that the people at Telefilm will then just take that word ``audiovisual'' and interpret it as they see fit, without concurrence of Parliament, as to what they are giving the money to or loaning the money to or granting the money to? Who will make that decision when things are changing? Should that bill come back to Parliament? So what if it changes in three years? Bring another amendment.
Mr. Blais: What I was saying is that it was a legislative style to sometimes use the ordinary meaning of a word, the ordinary meaning of the word ``audiovisual.'' It is not a decision for Telefilm; it is the definition of the act when Parliament says that there will be this corporation that can invest in audiovisual works. Anyone looking at that will say ``Okay, what is the ordinary meaning according to the Interpretation Act of audiovisual?'' It will be based on what people understand it to be, which is film, television and new media. Sound recording, as I mentioned earlier, is used in proposed section 10, and the ordinary meaning of that term certainly is fed by the term in the copyright legislation.
Senator Carney: There was a definition in the last act. What amazes me is there is no definition of any form in this act. That is the part that bothers me. I do not care how difficult it is or whether it simply says the definitions used in this act will be consistent with those used in associated industries, or something like that.
The Chairman: Senator Carney, in fact, ``feature film'' was never defined. In the old act, subsection 10(2), which is what we have referred to for the definition of feature film, goes on and on about what it means to be Canadian. It never says what a feature film is.
Senator Carney: We know what a feature film is.
Senator Tkachuk: We do not know what an audiovisual work is.
Senator Carney: They have said they used this term because it was loose enough to cover a lot of activities. We know what a feature film is; we know what a filmmaker is, a film activity, a film production and a film technician. The central point is there is no definition clause in this bill, none.
The Chairman: I understand.
Senator Carney: That is a flaw.
The Chairman: I think that the witnesses understand that point. Do you have anything to add to your responses on that?
Ms. Frulla: The only thing I have to add is we know what an audiovisual work is, we know what ``l'enregistrement sonore'' is, and it is the same as when we say ``film.'' Now, if we come back with a modernization of the bill, as I said, there is one thing that will be for sure — we will cover the actual activity of Telefilm. If there is a definition to be added, it will work in concordance with the meaning of those words in the industry and in concordance with Justice.
Senator Tkachuk: Why should we trust you to do that when you have not done it in the last 20-some years?
Ms. Frulla: I have been here six months and I am before you with this bill.
Senator Tkachuk: You represent the government, and I am asking you why we should believe that that could happen, when in the last 20 years you took the word ``film'' and interpreted it to mean television, music and all kinds of things without coming back to Parliament?
Ms. Frulla: Senator, again, the question was asked, and I think that we are all responsible, not only the government. Telefilm's activity has been analyzed and re-analyzed in parliamentary committees, and we did not realize, perhaps, or see the need — I was not there — to bring this technical bill forward to reflect what Telefilm does. I think that all the people involved did not feel or see, for good reasons, the need for doing so.
Therefore, we are doing it now; we are bringing it before you and saying we want to clarify things. As I said, for me, it is important to have a bill that reflects the activity based on the general definition of certain sectors that is generally accepted, and if we change or modernize Telefilm, the next bill will reflect what Telefilm does based on this experience. If you do not trust me, based on this experience, I am sure that you will ask us to make sure that the bill is reflecting the activity of Telefilm.
The Chairman: The next item on our agenda is clause-by-clause consideration of Bill C-18. Is it agreed, honourable senators, that the committee proceed to clause-by-clause consideration of Bill C-18, an act to amend the Telefilm Canada Act and another act?
Senator Tkachuk: On the basis that we will make an observation.
The Chairman: Are senators agreed, report with observations?
Hon. Senators: Agreed.
Senator Tkachuk: The observations should say?
Senator Carney: I leave it to the chair, who brought up the same point. Basically, the minister has made commitments to the committee to include definitions of the elements in this bill in the new bill that will deal with the modernization of Telefilm.
I am not saying you have to use those words, but the point is that we have observed that there is a flaw in this bill due to the lack of definitions. That was the problem with the old mandate, and the minister has given assurances that within a reasonable length of time, a new bill modernizing Telefilm will address this matter and we can unanimously support that.
The Chairman: Comments? I personally have no difficulties at all with that. Are we in agreement?
Hon. Senators: Agreed.
The Chairman: We are then in agreement to proceed with clause-by-clause consideration of this bill?
Hon. Senators: Agreed.
The Chairman: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chairman: Senators, I can ask you for approval on literally a clause-by-clause basis or we can group clauses 1 to 9. I propose to group them unless there is an objection.
Shall clauses 1 to 9 carry? Is everyone in favour?
Hon. Senators: Agreed.
The Chairman: Opposed? Carried.
Senator Carney: I have a question. I am sorry, but I am trying to look at my notes and at the bill. The problem is that I would like to have an explanation of clause 8.
The Chairman: Are we in agreement to interrupt briefly our clause-by-clause consideration while we contemplate clause 8?
Senator Carney: It is on page 4 and deals with the Financial Administration Act.
The Chairman: We do have explanations.
Senator Carney: Our notes from the Library of Parliament say clause 8 amends subsection 85(1) of the Financial Administration Act by deleting Telefilm Canada from the list of Crown corporations exempted from Divisions I to IV of that act. The exemption is immediately restored in the newly created subsection 85(1.1). What exactly does this mean? Why do you repeal an exemption and immediately restore it?
The Chairman: Is there an official here?
Senator Tkachuk: The Bank of Canada, the Canada Council and the Canada Pension Plan are all exempted presently, and I believe that Telefilm was part of that.
Senator Carney: They have immediately restored it in the newly created section.
The Chairman: This is an unusual way of proceeding with clause by clause. Never mind.
Mr. Blais: We will try to explain it. It is technical, but it is not clear when you look at it. Once the act proposes to give the power of a natural person, there are consequences because the powers are vast. One has to restrict them consistent with the previous mandate.
The way the act proposes to do that is to take Telefilm out of the old 85(1), but restore it in 85(1.1). That makes it subject to 21(2), which is in clause 7. However, it is not putting it back in as an exception entirely. It is an exception to an exception. In 21(2) it would say 90 to 93, 94(2), 95, 99, 100 and 102 would apply to Telefilm, which are activities that you would not want Telefilm to be doing. It is borrowing money. To come back to what it is doing now, the status quo ante, one has to make the exception to the exception.
Senator Tkachuk: Does that fulfill what you originally said about the bill, that it is subject to the Financial Administration Act? Will it be subject to that act, as the précis says?
Mr. Jeff Richstone, General Counsel, Legal Services, Canadian Heritage: Telefilm was always subject to the Financial Administration Act. However, under section 85, prior to this amendment, it was subject to old provisions of the act as it applied prior to the 1984 reforms.
It was subject to those provisions of the Financial Administration Act prior to the 1984 reforms.
It will still be subject to those provisions of the Financial Administration Act. On top of those disciplines, it will now be subject to the new disciplines of the Financial Administration Act as they apply to all Crown corporations, those specific disciplines you see in 21(2). That is to ensure they are on the same playing field as current Crown corporations because of the provision in subclause 10(2), which gives it the powers of a natural person. Because of that amendment, you have to ensure they are subject to the current disciplines of Crown corporations today. We had to move it, because of that, from the old Financial Administration Act to be currently governed by certain provisions of the new Financial Administration Act as they apply to Crown corporations. They have always been subject to the Financial Administration Act, but they are now subject to the post-1984 disciplines applying to Crown corporations, those specified in subclause 21(2).
Senator Carney: We have to take your word for it, but it is as clear as mud to me.
Mr. Blais: We agree it is not the clearest.
The Chairman: I wonder if we could ask, for our information and greater understanding, and in preparation for the next time we are looking at Telefilm, if you could write us a letter setting out in plain English or French, or both, preferably, exactly what all this ends up meaning.
Mr. Blais: We will do that. It is precisely for some of these reasons one needs to modernize the act. It is an old statute drafted in the 1960s that does not reflect the way we would do it if we were doing it from scratch today. It is a patchwork right now to get through the difficulty and uncertainty this creates in the industry. I agree that this is not the clearest way of drafting it and we will try to be of more assistance next time.
The Chairman: We will look forward to your letter in the meantime.
Mr. Richstone: Certainly, we can go into greater detail in that letter.
The Chairman: Subsection (2) is distinct from subsection (1). It is not as clear to those of us who have not spent our lives immersed in the Financial Administration Act.
Senator Carney: Or even to those of us who have.
Senator Eyton: Is Telefilm exempt then from the Financial Administration Act?
Mr. Richstone: It is not exempt from the Financial Administration Act. It is exempt under 85 from that —
Senator Eyton: If you look at 85, you will see Divisions I to IV do not apply to — and there is a list of exemptions. That is the exemption available. Then I look below and I see that subject to subsection 21(2) of the Telefilm Act — I do not have it in front of me — Divisions I to IV do not apply, so it is the same exemption.
Mr. Richstone: Twenty-one is in the clause immediately before that section. It is a new 21(2) as enacted by this bill. The two provisions are to be read together. The idea is that Telefilm was not subject to —
Senator Eyton: The clear answer is it does apply.
Mr. Richstone: It does apply. What apply to Telefilm now are the old provisions of the Financial Administration Act, the pre-1984 reforms. On top of that, under subclause 21(2), the specific provisions of the Financial Administration Act applying to Crown corporations listed there will apply, but not the rest of the post-1984 reforms applying to Crown corporations. Telefilm continues to be exempt from those new provisions.
Mr. Blais: The rationale for that is that institutions that have been involved in the field of culture have not been subject to the full regime of Part X of the Financial Administration Act because there is a desire to keep a distance between government and cultural decisions.
Mr. Richstone: There were certain intrusive provisions in the post-1985 reforms that the Parliament of the day deemed should not apply to cultural institutions.
The Chairman: This has been very useful. Put that in the letter and explain it in great detail.
Resuming clause-by-clause consideration of Bill C-18, senators, we had not carried the clauses, so I shall repeat my question.
Shall clauses 1 to 9 carry? All in favour?
Hon. Senators: Agreed.
The Chairman: Opposed?
Carried.
Shall the title carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall the bill carry?
Hon. Senators: Agreed.
The Chairman: Opposed? Carried.
Shall I report the bill to the Senate without amendment but with observations?
Hon. Senators: Agreed.
The Chairman: Am I authorized to finalize those observations following the very specific discussion we had a few moments ago?
Senator Tkachuk: Can we get agreement that Senator Carney and —
The Chairman: We will figure it out.
Senator Tkachuk: I will leave it in your capable hands.
The Chairman: Thank you very much, senators.
The committee adjourned.