Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 8 - Evidence - February 27, 2007
OTTAWA, Tuesday, February 27, 2007
The Standing Senate Committee on Transport and Communications met this day at 9:36 a.m. to examine and report on the objectives, operation and governance of the Canadian Television Fund.
Senator David Tkachuk (Deputy Chairman) in the chair.
[English]
The Deputy Chairman: Welcome. The Chair of the Committee, Senator Bacon, is away today, so I take the chairman at her request.
Our first witness this morning is Michèle Fortin, President and CEO of Télé-Québec. Ms. Fortin, please proceed with your opening statement.
[Translation]
Michèle Fortin, President and CEO, Télé-Québec: Thank you, Madam Chairman, for inviting me. For the purposes of today's meeting, besides the Télé-Québec hat, I am also wearing two and one half more; please allow me to explain. You may be interested to know that I am a member of the Canadian Television Fund board of directors. I am not an independent member, since I represent the Association for Tele-Education in Canada. I am concerned about the future of education television in Canada, since this type of programming is regional and specialized. I am also the CEO of Télé-Québec. I am therefore most interested in French-language television production and the future of Télé-Québec, something that may temper my comments. I will try to express myself as clearly as possible.
I do not intend to make a lengthy presentation, as I would prefer to answer your questions. As is the case for most people who work in television, I feel that the Canadian Television Fund is a fundamental and essential part of our television industry. We are a small country and we must compete with large English-speaking societies, not the least of which is the United States. Any discussion and any action undertaken by both the Quebec and the Canadian governments at the international level to defend cultural diversity were intended to allow the existence of a system to support Canadian television production and to air programs that reflect our identity, even if it would not be economically feasible to do so independently.
As a Fund member, I know that questions have been asked about the governance, the distribution of the funds, and more particularly, about the CBC's share. I said that I am wearing two and one half hats, and the one half relates to my many years as Executive Vice-President of Radio-Canada. I would like to call your attention the fate of educational television and what I call the small orphan television producers.
Most of the debates surrounding the Canadian Television Fund are related to the rapid changes in the television industry and Canada's new media.
As you know, the CRTC will soon be hearing requests for major acquisitions. These include, on the English- language side, three or four large groups, including Astral Media, which is interested in buying radio stations. On the French side, there are Vidéotron, Astral Media and Radio-Canada, which, even without a distribution system, is nevertheless important.
What television networks remain, besides these groups? There is educational television, which is made up of regional stations. It produces and broadcasts programming which is intended mostly for children and people living in these regions. The programming is different and does not enjoy the support of any groups. These productions are not part of the distribution network. Therefore, they may be neglected in this debate. Regardless of the choices or solutions that are adopted, this type of production may be lost in the shuffle.
That is all I have to say. I will now be happy to answer any questions you may have on the Canadian Television Fund. And if I am unable to answer your questions, I will let you know.
Senator Champagne: You yourself said that the greatest criticism level at the Canadian Television Fund — and I refer to Vidéotron and Shaw Communications — related to governance.
As a member of the Cable Network Fund, are you in agreement? Do you understand their concerns about governance?
Ms. Fortin: Before dealing with governance, we have to speak about philosophy. Are the funds provided by Shaw Communications, Vidéotron and other distributors legitimate or are they simply meeting these CRTC public policy requirements? I think they are trying to turn this into a debate to decide who owns the money; is it the cable industry or the federal government?
With respect to governance, there are two distinct models. The arts and culture model is managed by the industry, something that was not always easy, as evidenced by the recording industry.
There are 22 members in the Canadian Television Fund, a majority of which represent interest groups and industry experts who are both managers and consultants. That makes things rather more complicated.
You must not forget that the fund has recently made an effort in terms of their decision-making process. It now has a double-majority system through which any important policies must have the support of the majority of board members as well as those who are independent. So it has a rather rigid mechanism. For example, the independent members' committee is allowed to vet the agenda before each meeting to ensure that participants will declare any potential conflict of interest. So the fund is being properly managed.
Of course, there are not many fund contributors on this committee since they are not appointed according to the size of their contribution but rather according to the segment of the industry that they represent. For internal reasons, some of them have never managed to delegate a member. The cable distributors were feuding with the satellite distributors, and both wanted a single spot that has never been filled.
Either we continue with a system where the industry is represented on the board, or we move toward a more independent board, where consultations with the industry would take place at another level. We have to choose. In terms of management, things would be much simpler and it would be easier to respond to criticism. This is the model that they have at the CBC and at Telefilm Canada.
Both models are viable. The board has taken steps to ensure independent decision-making. However, this type of management can be quite cumbersome.
Senator Champagne: This question relates to you as CEO of Télé-Québec. Do you have access to the Cable Distributors Fund?
Ms. Fortin: Yes.
Senator Champagne: Do you make regular use of it; if so, what percentage of your productions would that represent?
Ms. Fortin: We do have access to the fund, but we used to have greater access to it. For this year, we will receive about $6.9 million. That amount will likely be lower next year, because our productions involve two Fund priority areas, namely children's programming and documentaries. The other areas, namely arts, variety and drama are generally supported by more robust producers than we are.
In view of the amounts dedicated to Radio-Canada, the new rules are more disruptive for the French side as opposed to the English-language side. Radio-Canada is a big player in the French-language television universe. If Radio-Canada is given a fixed amount, then Radio-Canada will see no increase in its audience share as it will lose viewers to other networks, namely TVA and Télé-Québec.
Senator Champagne: At the outset, the Canadian government contributes $100 million per year to the Canadian Television Fund, and has been doing so for a number of years. Radio-Canada or CBC programming represents 35 per cent to 37 per cent of the $100 million paid by the government, which owns the CBC, but which nevertheless contributes to the fund. With that in mind, do you really feel, as CEO of Télé-Québec and a representative of educational television, that this is unfair to all of the fund contributions, apart from the government?
Ms. Fortin: No. In fact, when I was at Radio-Canada, we applied for funding. In any case, it is the independent producers, and not Radio-Canada, who apply for the funds, regardless of who is the broadcaster.
In my opinion, the burden would be easier to bear if the same rules applied to everyone. If that were the case, perhaps Radio-Canada could receive a larger share of the funding, and I would not be against that.
The fact that part of the fund is managed according to one set of rules and another part according to another set makes it difficult to harmonize the rules for the entire industry. The CBC should be just as eligible as all of the others are. Some companies, like Vidéotron, do not want to contribute to a public fund. But the public fund helps in the production of programming that is broadcast regularly on some of these networks.
Senator Champagne: And Vidéotron broadcasts Radio-Canada's programs.
Ms. Fortin: However, TVA receives $16 million from the fund to produce programming that is aired over a private network.
Senator Fox: Ms. Fortin, I believe that you and the APFTQ are among friends here this morning.
We have heard so much about the CBC that we sometimes forget the other public, or quasi-public broadcasters who also benefit from the fund. If I am not mistaken, 37 per cent of the fund is dedicated to programming under an agreement between the producer and the CBC.
Is there a similar amount set aside for Télé-Québec and university television?
Ms. Fortin: No, we do operate in the same sphere as private television. There are three specific programs: Radio- Canada, francophones living outside Quebec, which is producer-oriented, because it is more industrial in nature, and aboriginal people. All of the other types of television are part of the same fund redistribution system based on criteria that are predetermined by the Fund.
Senator Fox: Are you happy with that or do you think there should be a special system for public television, apart from Radio-Canada?
Ms. Fortin: In all honesty, I really do not know. Yesterday, we spoke with the public and private television broadcasters from British Columbia, Alberta, Saskatchewan, Ontario, and with educational program broadcasters. The public side does not believe in the fund, but the private side does.
The government wants to increase the number of Canadians who watch Canadian programming. Our ratings at Télé-Québec are not all that bad when it comes to our target audience and the type of programming that we produce. However, in terms of general competition, that is not our main consideration. So it does not present any great advantage for us.
Either model could exist and I am not sure which one I would prefer. What is important to us, and it is difficult to find funding for, is children's programming. The audience numbers are not high enough, the programs are expensive to produce, but there is a potential for foreign sales when the programming is animated rather than a drama. The program called Passe-Partout is only exported in DVD format.
Therefore, either one of the models would be feasible. However, we do not want to end up with a model where the criteria are defined by private broadcasters and with the public broadcasters being relegated to some type of "no man's land.''
Senator Fox: When you say private, do you mean the other board members and not the APFTQ, for example?
Ms. Fortin: The other members of the board of directors. The models that are being put forward should not give more clout to the signal distributors when it comes to policy making. The distributors are not particularly fond of the public broadcasters.
Senator Fox: Since the controversy erupted, following the Vidéotron and Shaw decisions, a number of committees have held public hearings, including the House of Commons, the Senate and the CRTC. Do you think there is a crisis? Or, in other words: Has the crisis passed but does the problem continue? You do not seem to be happy with the solution.
Ms. Fortin: There will always be controversy. That is the way things are in the industry. However, there should be a way to, once and for all, deal with the criticism or the controversy in order to guarantee the continuation and the development of the fund. An organization is always open to criticism by one of its members or one of its partners. That is not helpful in terms of development or growth. The matter must be settled once and for all.
Senator Fox: When the Canadian Television Fund representatives appeared before our committee last week they made four recommendations. However, even if they were accepted by the CRTC, I do not see how these recommendations could represent a solution, even for the next five years, since it would be unrealistic to think that we might ever see the end of this.
Ms. Fortin: I will give you my personal opinion. Because of its make up, it would be very difficult for the fund to introduce a radical solution. There are too many interests at stake. People have worked too hard to improve the system; they will never admit that a complete overhaul is in order. The problem stems from the fact that those who are on the outside and those who are on the inside do not see things in the same way. That is why I find it interesting that the CRTC, the Senate and the House of Commons have become involved, because the view from the outside can mean that people, even though we might be right, do not necessarily agree without our position, and may no longer believe us or put any faith in us. We have to find some way to harmonize things so that the fund can survive and be accepted by the industry. And I am not referring to Vidéotron and to Shaw. Their fight goes beyond the purview of the fund. They want royalties for the specialty networks, deregulation, new media, etc. That is part of a more global strategy.
Senator Fox: The only way we will solve this is if everyone agrees on a basic principle. The private broadcasters, who, only with the federal government and the satellite companies, contribute to this fund, receive, in return, the immense privilege of having licences awarded to them — in the early days of cable television, these broadcasters were monopolies and remain oligopolies — and they should help or contribute to the public system. They represent part of the solution. I remember when the Bell Canada representatives used to sing the praises of free enterprise when all the while they had a monopoly, with no competitors, and it was easy to make record profits under those conditions. Would you agree then, if this principle were to be accepted, or, if not, then imposed, that the private sector as it has evolved over the years in Canada should also contribute to the success of the public sector?
Ms. Fortin: I whole heartily agree. If everyone is given free rein, it will cause a huge upheaval in Canada's broadcasting system. We would be jeopardizing that for which we are fighting, namely, the chance to produce programs of a quality equal to that of our American neighbours, and to respect cultural diversity.
Senator Fox: Should public television, other than the CBC, be treated differently within the fund?
Ms. Fortin: That depends on how the other issues are addressed. If private broadcasters are more involved in making the rules, then I would favour some type of special status for public television. If the fund takes on a greater role in the application of public policy, then things will probably be different.
[English]
The Deputy Chairman: I will try to wrap this part up by 10:15. We will then go to the next set of witnesses.
Senator Zimmer: Thank you for your presentation this morning. My question is about the viewing audiences. As Shaw and Vidéotron objected, in part, to the fact that the CT fund subsidized programs that few Canadians watch, what are your thoughts on this objection? Is there a way for the CT fund can provide incentives for the production of more popular programs?
Ms. Fortin: May I be bold in my response?
Senator Zimmer: Absolutely, if the chairman allows it.
Ms. Fortin: This was said, especially by Shaw, in respect of English Canadians. French Canadians watch their programs.
There are huge audiences for Canadian programs by francophones. I was at Radio-Canada/CBC for a long time, and we struggled with how to increase the audience of English Canadians for English Canadian programs, especially in the area of drama. Perhaps it is a lost cause; I do not know. When people talk about Canadian audiences, they should differentiate between French and English audiences.
Senator Zimmer: Are the less successful programs financed by other Canadian funds, such as the Shaw Rocket Fund, in your opinion?
Ms. Fortin: I do not know about Shaw. In the francophone milieu, they often just chip in with the CT Fund and with other funds, such as Cogeco, Rogers, the National Film Board and the broadcaster because that is the way to build a financial structure. Of course, and I will use a French example, francophone television deals téléréalités, or reality television, and other copycat American programs that attract a large audience of maybe 2 million. Commercially, these programs are viable but they are not the only thing that people want to see on television. Simply making those kinds of programs does not make Canada a different country. That is the way I would answer that question.
Senator Zimmer: Shaw and Vidéotron noted that CT Funds were not available for video-on-demand productions. Given the recent growth in new media, should CT funding be forthcoming to new media?
Ms. Fortin: I was not present when this discussion took place. The CT Fund cannot answer to all the demand for television production. In the background, I believe there was some kind of reflection such that to go into all these other areas, maybe we should receive more money. If we do not receive more money, then we take money from Canadian programming at a time when television needs support to maintain its appeal to a Canadian audience. I do not know more than that.
Senator Zimmer: Thank you for your candour.
Senator Adams: Ms. Fortin, I come from the North where we have Aboriginal programming and broadcasting in radio and television thanks to Senator Fox, who was the minister-of-the-day who put up the money. That was a long time ago.
Thanks to cable company policy we have Aboriginal programming across Canada. However, I heard some people say that the satellite companies need to include at least one Aboriginal program. The argument by some is that if they do not understand the program, why should they pay more money per month for that satellite service? Have you heard about that?
Ms. Fortin: No, but I have heard that Aboriginal people wonder why they do not have more money for programming and that francophones outside Quebec receive more money than they receive. The only real comment I have heard is about Aboriginals not having a right to that money. I have not seen it anyway.
Senator Adams: We have about four different languages, Inuit, Cree, French and English. There are good programs. There has been talk about the service provided by the cable and satellite companies because of the grey area and how some people receive the satellite signal without paying for it. Now, the signal is locked but in many rural areas, the people cannot afford to pay for the cable or satellite signal. Are there still grey areas for signals?
Ms. Fortin: At the Canadian Radio-television and Telecommunications Commission, CRTC, there was a debate about whether we should continue broadcasting in the North via cable and satellite. However, this debate has nothing to do with the CT Fund and pertains more to broader general broadcast policy.
Senator Adams: CBC has an Aboriginal channel provided by the cable company but in the North, we receive the signal through an aerial, not a physical cable. The reception was not good, it was always snowy. Is there a kind of cable or aerial that could be used for the community to receive the Aboriginal channel from CBC? I ask because many in the community cannot afford cable or satellite service.
Ms. Fortin: With apologies, I would not know about that.
Senator Adams: The co-op has set up cable in the community. Is there a monopoly on satellite dishes in Canada?
Ms. Fortin: I do not know. I am sorry that I cannot be more helpful.
[Translation]
Senator Munson: Do you think Vidéotron contributes enough to the Canadian Television Fund?
Ms. Fortin: As I understand the rule, the signal distributors contribute a percentage of their revenue which varies according to whether or not they distribute community channels. Vidéotron operates in a level-playing field with all the other signal distributors. Since part of Vidéotron includes television, in general, its television network — at least last year — received a little more than it contributed. However, I must emphasize that they are treated as two different undertakings, one being a contributor and the other being a television network — in fact, the most popular television network in Quebec.
Senator Munson: Do you feel the same way about Shaw Communications?
Ms. Fortin: Shaw Communications pays its percentage too. Should the percentage be changed? I do not know. I have not thought about that. From our point of view, perhaps it should be changed; the more money there is, the better things are, but when it comes to the overall economic health of the system, I think that there are other considerations which need to be factored in and it is up to the CRTC to make those kinds of decisions.
[English]
Senator Munson: I hope that one day some part of this fund can be used for the program, Têtes à claques, to invade the rest of English Canada with characters such as Willi Waller. It would be a great cultural experience for all of us.
Ms. Fortin: I did not understand that comment.
Senator Munson: I speak of my new television friends in Quebec.
Ms. Fortin: Yes, of course. Such programs are all over Canada and they did not need public funding. They are making a huge amount of money without the benefit of the fund.
Senator Munson: I think Pierre Péladeau would like to get his hands on that program.
Ms. Fortin: He can always invent something else because that is the privilege of the creators. He should have come up with the idea.
The Deputy Chairman: With the popularity of French productions in Quebec, do you have information as to how many Quebec productions are independently funded by investors and a profit is made?
Ms. Fortin: I would say that news, magazines, quiz shows — all those popular types of programs do not use the fund. It is almost impossible to make dramas, serious documentaries and children programs — except light children's programming — without the fund. That is the breakdown.
The less money we have in the fund, the more magazines we do. That is what I will do next year, along with lighter things. If we want to go into drama for children, documentaries, and especially drama for adults, we need money from the fund; everyone does.
The broadcaster puts a lot of money into programming, too, and we have the tax credit and the fund. Basically, those sources of financing are the three major ones.
The Deputy Chairman: Is the 5 per cent that Vidéotron and Shaw pay a never-ending payment for the right to have cable? Is the fee a tax? You talked about how they see it. How do you see it and how do members of the board of the fund see that 5 per cent? Is it a user fee, a tax or a payment for the right to have a license? What is it exactly? What do you think it is? We will ask Shaw and Vidéotron as well, when they come.
Ms. Fortin: I am not a lawyer.
The Deputy Chairman: You are on the board.
Ms. Fortin: I do not know what all those arguments would be.
The Deputy Chairman: Neither am I a lawyer.
Ms. Fortin: I think if we want to maintain a Canadian system of television with Canadian programs, with 30 million people and programming in French as well as English, we need some kind of infrastructure for financing. If not, Canada will become a satellite of the United States. In French, we will have only poor types of programming because we do not have the population to support the quality of television that is seen here now if we do not have any help. Is it a tax or not a tax? I think the system was built that way to provide something for Canadians that reflects what they are and what they aspire to do. If we do not have that, we better forget about it.
The Deputy Chairman: Residents in Canada pay a cable bill, and in that bill they pay anywhere from $40 to $100, depending on how much cable they have. Within that bill, they pay not only for the right to carry that programming, but also a fee charged by the cable companies to cover the costs of programs — many of which they never watch. They must take them because if they want one channel, they must take the other four in the package. They pay for this TV production. The networks such as Global and CTV have tried to make the argument that networks should receive some of that money, too, to fund production.
The way I see it, that is a lot of money to fund production. I do not know how much of that $100 cable bill is fees for cable companies to produce television shows, but that amount of money is substantial from every resident in the country that has cable. Is that money not enough to fund television programming?
Ms. Fortin: If they were to buy only one channel and pay for all the costs to receive the sports channel or the drama channel, maybe they could not afford it. Making television programs costs a lot of money. The only way to have cheap programs is to buy them from the U.S, which dumps them here. To make television programs here, we pay for a lot of channels and the money is redistributed. When we go to the theatre or the opera, we pay for one show at a time. Opera on television is expensive. It is like à la carte: when we pay à la carte, we do not pay for the real costs. We do not even pay for the marginal costs. That is the way the system is built.
I would like to discuss with you how it could be built differently, but we need important amounts of money to make programs in Canada for Canadians. Canadians will not pay for programs, one by one. If we do not make programs, we will not have Canadian culture anymore. It is that simple.
Maybe if we were 300 million people, that situation would be different. We are not. When I was at Radio Canada, we were often compared to the British Broadcasting System, BBC, and to France but those countries have 80 million people and they have a huge amount of money to make their programs — far more than here.
Senator Zimmer: I understand that Shaw wrote a letter last December and indicated that it was their understanding, that after a five-year initial period, the fund would be self-sustaining and self-sufficient; and that a sunset clause was provided in for private contributions to the CTF. Do you know anything about that five-year period? Was anything ever in writing on that?
Ms. Fortin: I do not know anything about that situation. I was not at the fund at the time. I was doing science. If somebody wrote that, they were making a huge mistake or telling a big lie because the fund could never be self- sustaining with the population base in Canada.
Senator Zimmer: Especially after only five years.
Ms. Fortin: Yes, and it could not be sustaining even after a longer period. Look at cinema. A couple of films, one or two per year, make their money back. Even in the U.S., probably one out of 10 pays for all the others — that is the rule of the industry. It is not possible, except if they make programs only to sell to other countries on a format basis or something like that. That is another kind of industry; that programming does not have a cultural bearing on who Canadians are and what they want to see on television.
Of course, a lot of people watched the Oscars; I did, too — part of it — but that is not enough. That is not how you build a country.
Maybe we are not doing it perfectly. I know that in English Canada, especially on the entertainment side, people have problems competing with all the promotions and cash that Americans put into their programs. However, it is not true for children's programming or for documentaries; it is not true for a lot of other types of programs where Canada has a different kind of voice. I think Canadian programming is worth keeping. That is my speech for today.
Senator Munson: Before you go, Senator Tkachuk and I are good friends. He is from Saskatchewan and I am from the Maritimes. He likes Corner Gas, which is set on the Prairies. Do you know if that program is subsidized in any way?
Ms. Fortin: Yes, it is.
Senator Munson: Where do the subsidies come from?
Ms. Fortin: Maybe my friend from the Canadian Film and Television Production Association, CFPTA, would know, but I think the fund has money in it.
Senator Munson: The private sector uses this fund and pours the money back into Canadian programming that is popular in the West. I thought we should have this point on record.
Ms. Fortin: I do not know about Corner Gas. It is a CTV program. Someone else would probably know. I think the program was funded the first year but not in the following years, but I would not swear to that.
The Deputy Chairman: Thank you very much, Ms. Fortin.
I want to call on Vincent Leduc and Jacques Blain, from the Association of Film and Television Producers in Quebec; as well as Scott Garvie, who replaces Guy Mayson this morning. Mr. Garvie is with the Canadian Film and Television Production Association, which is the umbrella national group. With Mr. Garvie is Mario Mota, Senior Director, Broadcasting Relations and Research.
We have papers from both organizations. If you would each like to give us a five-minute summary, then we can then proceed to questions. I will start with Mr. Leduc.
Vincent Leduc, Chair, Board of Directors, Association des producteurs de films et de television du Québec: I do not have a summary, so I will go through my comments rapidly in French so that everyone will be on a level playing field.
The Deputy Chairman: You do not have to rush.
[Translation]
Mr. Leduc: I am chairman of the Association des producteurs de films et de télévision du Québec board of directors. I have with me Mr. Jacques Blain who is a member of the APFTQ board of directors. We represent the vast majority of the independent television and film production companies in Quebec, counting over 130 firms.
As we have stated publicly, the APFTQ considers that the decision by the cable companies Shaw and Vidéotron to suspend their payments to the Canadian Television Fund was unacceptable, and held the entire Canadian television broadcasting system hostage. After repeated appeals by the community, the Canadian government and the CRTC reminded these two companies of their regulatory obligations and they eventually complied.
Support for Canadian production is a fundamental pillar of the regulatory framework for Canadian radio broadcasting, and without this pillar, the entire structure would fall. Without the funding contributions of private cable and satellite companies to the CTF, 60 per cent of Canadian drama, documentary, youth and variety programs would disappear. This would mean a 60 per cent loss in jobs for our broadcasting screenwriters, directors, and so forth. And doubtless many independent production companies would have to close their doors.
The stability of an entire industry is at stake. A general withdrawal of payments to the CTF by the cable and satellite companies would mean a loss of 8,500 jobs in Canada, with 2,500 in Quebec alone.
The Broadcasting Act as well as industry support measures, were put in place to encourage the development and diffusion of our culture, despite the omnipotence of our American cousin. The objectives of this Act are more relevant than ever, in an international context where the promotion of cultural diversity means a battle to be undertaken and won. This fight only makes sense if the cultural diversity in question is first affirmed and promoted country-wide.
Furthermore, one of the particular objectives of the Canadian broadcasting policy is to tap the potential of independent Canadian producers, so as to ensure a greater diversity of creative sources. Other measures have been put in place to instil a balance between the public, private and specialized chains. Canadian content quotas have been said to ensure a predominant place for our programs on our screens. Financial support measures for home-grown productions have been established in response to demand. The rules for Canadian ownership and control of the broadcasting companies exist to protect this system.
The Canadian broadcasting system serves as a model for the rest of the world. Successful Quebec television would have never seen the light of day were it not for a series of support measures. For the last 25 years, our system has fostered protection of the francophone audience, an enormous program popularity and internationally renowned quality.
Cultural promotion is a societal choice that Canadians have affirmed over the years. It would be irresponsible to question these policies without considering their very grounds for existence. The debate concerns all citizens, not just a few firms that are displeased about some rules and regulations.
The objectives underpinning the creation of the Canadian Television Fund were to ensure that the Canadian public had access to quality Canadian programs, to be produced by a large variety of Canadian producers and distributed on all the Canadian channels.
I would like to remind you that the CRTC instituted the principle of mandatory contributions by distributors in order to fund Canadian broadcasts, at a time when it had been decided to authorize radio and television broadcasting firms to compete for television, telephone and new media service offerings. Although opening the way to competition put an end to cable television monopolies, it also conferred enormous advantages in terms of ownership concentration, cross-owned media and the use of privately-owned networks to offer the whole gamut of new and very lucrative services.
The result is that today, five large broadcasting distribution undertakings, what we call BDUs — Rogers, Shaw, Vidéotron, Bell ExpressVu and Cogeco — control 90 per cent of all television broadcasting subscriptions in Canada.
Moreover, all these BDUs are operating intensely as Internet and portal providers as well as residential and wireless telephone service providers. And having opened the way for competition, the broadcasting companies have benefited from the change.
In their television broadcasting activities alone, the BDUs have seen their profits increase 340 per cent from 2001 to 2005.
The BDUs and their associated television services own over 80 per cent of total revenues in the Canadian private broadcasting industry.
Jacques Blain, Vice-Chair, Board of Directors, Association des producteurs de films et de télévision du Québec: And, surprisingly, what is Quebecor proposing now, as one of the five giants controlling the country's broadcasting industry? Nothing less than depriving all the production and television companies who are not associated with them of all financial assistance from the Canadian Television Fund.
In fact, if, as Quebecor proposes, all of these firms are free to withdraw from the Canadian Television Fund and pour their contributions into a private fund that would support only programs destined for and produced by its programming affiliates, what will become of the television firms that are not affiliated with these distributors?
What will happen to Télé-Québec and the Télé Astral, Global, TV5 and MusiquePlus chains in this kind of world? They would be sitting on the bench, deprived of all direct financial assistance from the distributors, who would meanwhile get richer by distributing their services as non-Radio-Canada productions.
Given that Vidéotron controls 80 per cent of cable subscriptions in Quebec, what justifies the fact that TVA and its affiliates receive 80 per cent of all the payments from Quebec broadcasters when they reach only 29 per cent of Quebec francophones?
Why should the Quebec francophone chains that are not associated with Quebecor, while capturing 65 per cent of the audience, be deprived of all support on the part of Quebec's biggest cable provider?
In the early 1980s, TVA, Radio-Canada and Télé-Québec were producing almost all their own Canadian content, and the programs that dominated the audience ratings were not being made here: they were called Dallas and Dynastie. And Quebec francophones deserted French-language television in great numbers to watch the English programs.
Today, 27 of the 30 most-watched programs by Quebeckers, each season, are made in Quebec, and French-language television captures almost 95 per cent of the francophone audience. This situation is largely thanks to the talent and creative production and an expertise developed by the independent producers that we represent.
Do we really want to go back 30 years in time? Do we really want to return to a situation where just a few integrated producer-broadcasters control all broadcasting creation and access? It would benefit neither the public nor anyone in the industry.
At a time when the Minister of Canadian Heritage is taking stock of Canada's and Quebec's efforts to promote cultural diversity around the world, we would like to remind you that this cultural diversity, this diversity of editorial voices, this diversity of creative sources, is threatened right here in Quebec, by Quebecor's Media proposal.
I would like to briefly address the issue of copyright on the new platforms, a subject of concern for Quebecor as well as the entire industry. The APFTQ has thought about this issue a lot in the past year. We formed a special committee to undertake a thorough analysis of the economic evolution of television across the country. The committee defined certain principles that would seem indispensable for a healthy negotiating climate.
It then drew up recommendations for the release and compensation of operating rights for independent television program broadcasts as a video-on-demand service on various platforms. These proposals, based on equity partnerships, were sent to broadcasters and artists' associations. If you are interested, we brought some copies with us.
The approach advocated by the APFTQ was then submitted to all concerned stakeholders as the basis for discussion under a multilateral consultation process. Our hope is that an industry consensus will arise from the current discussions with all our partners. Producers could share with the rights holders (authors, directors, actors) the revenues from works distributed on the new platforms, insofar as they can access revenues. This is not yet the case, unfortunately.
Mr. Leduc: The Association des producteurs de films et de télévision du Québec welcomes with open arms the announced consultation with the CRTC on the Canadian Television Fund. We will actively participate to examine the issues in the use of the contributions paid by the BDU, size and structure of the board of directors, appropriate mechanisms to resolve potential conflicts of interests within the CTF, and any other aspects that are submitted to us. We have already formed a working committee within the APFTQ for this purpose.
We would like to underscore the importance we place on an open and transparent process to address these issues of public interest. The Canadian public is in the front row when it comes to Canadian television, and they have a voice. In the same way, all industry stakeholders have a right to know the justifications for any further changes to this essential fund for Canadian culture. Thank you for your attention.
[English]
Mario Mota, Senior Director, Broadcasting Relations and Research, Canadian Film and Television Production Association: You have before you our opening remarks. We will not read them in the interests of having enough time for your questions. If you will allow me to make some brief points, I will then turn the floor over to Mr. Garvie to introduce himself.
The CTF, in our view, is an essential component of the Canadian broadcasting system and has been extremely successful. Without the fund, many programs that our members make simply would not be made and many distinctive Canadian programs we see on TV that are loved and watched by millions of Canadians would not be watched and seen.
The Canadian Film and Television Production Association, CFTPA, represents almost 400 companies who are engaged in the production of television programs, feature films and new media productions across the country. There is often a bit of confusion about what producers do, so I will now provide you with that information.
We develop the projects, structure the financing and hire the creative talent and crews — often in the hundreds — to turn stories into programs, control the exploitation of the rights and deliver the finished product. We create high quality programming in the financially risky genres of drama, comedy, documentary, kids and performance programming — what the CRTC calls priority programming. We also create content for new digital platforms. Every day, we provide Canadian television viewers with the choice of a Canadian perspective on our country, our world and our place in it. As such, the independent production sector plays a vital role in the Canadian broadcasting system, as recognized in the Canadian Broadcasting Act.
In addition to the cultural objectives that we help achieve, we also contribute significantly to Canada's economy and are responsible for a considerable portion of the more than $4.5 billion in production activity annually in Canada, sustaining over 120,000 direct and indirect jobs. This sector in the economy is not insignificant, in our view.
Senator Fox: Those figures includes both film and TV, I assume?
Mr. Mota: That is right. They also include service production in this country: that is, the work we do on behalf of foreign producers that shoot in this country. It is the global number.
Before I turn to Mr. Garvie, I wish to clarify a couple of things for the public record. The number of 5 per cent has been tossed out a few times in terms of the contribution that broadcasting distribution undertakings, BDUs, must contribute to the production of Canadian programming. That number is actually 3 per cent, because under the CRTC regulations BDUs can use 2 per cent of that 5 per cent to fund their community cable channels — at least the cable companies do. That figure started as 5 per cent and, over the years, has clawed its way back to 3 per cent. I wanted to clarify that number for the record. Over the years, the cable companies tried to eat into that contribution to fund their own interests.
Senator Munson mentioned Corner Gas. For the record, Corner Gas is not supported by the CFT. It is one of those rare programs that managed to succeed without public funding, but a significant amount of money is pumped into that program from a regulatory scheme. When BCE purchased CTV, they had to put public benefits into that transaction, so the money comes largely from the pool of money that BCE pledged to put towards Canadian programming as part of that transaction. Without that transaction and that pledge, we probably would not have Corner Gas today.
Scott Garvie, Member, Board of Directors, Canadian Film and Television Production Association: When you talk to the producers, I suspect you will hear that they will go to the CFT this year as that benefit package is finished and now they will go through CTV.
I do not have as many hats on as my friend Michèle Fortin, but I started life as a lawyer. I think of myself as a lapsed lawyer now. I worked for a number of years at Telefilm Canada as in-house counsel and I have been involved in a production company in Toronto called Shaftesbury Films for 14 years. We do one-hour drama and television movies such as The Terry Fox Story. We recently did a movie based on Margaret Atwood's The Robber Bride. We have done other adaptations of Margaret Atwood's work, as well as adaptations of work by Carol Shields, Timothy Findlay, Mordecai Richler and Morley Callaghan. We recently bought the rights to Vincent Lam's award winning Bloodletting and Miraculous Cures, which we expect to produce next year. We have created children's programming also. We have a successful show on the Family Channel called Life with Derek. We won an international Emmy two years ago for a show with CTV participation called Dark Oracle. We also do miniseries. We have a large-format division, so we paint a wide palette of projects.
I have been on the CFTPA board for over 10 years and I am currently one of the two representatives on the board of the CFT, which has been an interesting process, even more so in the last few months.
As we said before, there are currently 20 board seats on the CTF. Only 16 are currently in place, with a number that have never been filled and a number of resignations, with six independent members. I have been astounded at the level of expertise and experience on that board. It is a complicated board because we have both the English and the French. We have the funders, heritage representatives, and the cable representatives; we have the makers, which are the producers; and we have the users, which are basically the broadcasters. We have conventional broadcasters, both on the English and the French side. We have paid broadcasters, specialty broadcasters, educational broadcasters and the public broadcasters. When I hear people say that we must need a smaller board, I am not sure who of those people to take away from the mix without causing an uproar, because the mix is both complicated and interesting. While so many different sectors have vying interests, the board tries to make it work for everyone in a Canadian way. As we have said, heritage money has been constant since the fund was created. The BDU monies have increased, but they are not enough. We now have over 400 licensed channels at the CRTC and more are licensed every day. The pot is not getting bigger. I am not sure how many end-users there were 10 years ago, but it is different.
We echo a lot of the comments of our friends about the CRTC. It is healthy to have a review and to look at things critically to see if they work. The review must be effective, transparent and efficient. We need to ensure that happens. I do not think making change for change's sake is necessarily a responsible thing to do.
A number of reviews have been conducted in the past few years, including one by the Auditor General, who has made a report. As our friends from the CTF told you last week, all those recommendations have been implemented. We also have staff and the board of directors reviewing the protocols carefully and we have taken those conflict of interest guidelines and things seriously. We brought in outside consultants to help look at our processes to ensure that we do the best we can do, and that what we do is impeccable and above reproach. Having sat on the board for 18 months, I am astounded at how rigorous that review has been, and the way people take it seriously, as they should.
I can speak to a couple of earlier questions about audience. The CTF increasingly uses audience measurement for how it calibrates who gets what money. It is all broadcast envelopes. If they succeed in driving audiences to the screen, they will get a larger share of the overall pie. The broadcasters, the end-users, are focused on how to ensure they create shows that people will watch? Shows such as Shania: A Life in Eight Albums, a movie of the week, recently had 1.2 million viewers. One Dead Indian, a movie of the week, had one million viewers. Degrassi: The Next Generation, a youth drama program, averages about 737,000 viewers. More recently, Little Mosque On the Prairie, on CBC averages 1.5 million viewers, which is a fantastic thing because the CBC's numbers have been down. It is great that those shows are finding an audience.
In terms of exportable value, CTF supported dramas such as Degrassi: The Next Generation, Da Vinci's Inquest, Cold Squad, and children's programming like Life with Derek, Franny's Feet and Renegade Press are sold and seen in over 100 countries. Life with Derek is now in nine different language versions around the world, and seen in 137 countries. One complaint Shaw had is that people are not watching programs in Canada not exporting programs outside. In our experience, that is not true. I would love to have a Venn diagram on the use side of what shows Shaw has been in that were supported by the CTF. I believe about 80 per cent of the shows supported by the Shaw fund are also supported by the CTF.
With respect to Canadian viewing, there are have shows like Corner Gas. We did a show for CTV called Eight Days to Live, funded outside the system, that received 2 million viewers. We did a second movie that recently aired on CTV, In God's Country, about polygamy in B.C that was watched by over 1.7 million viewers. We made a Terry Fox movie for the twenty-fifth anniversary, that received over 2 million viewers and we expect it will have many viewers every year on the anniversary of the run. Our show Life with Derek, has CTF money in it. We did some research and that show had over 3.36 million viewers in 2006 alone. It was watched 225 times. To put that into context, the best used show in Canada is Sponge Bob, which has 300,000 viewers. Life with Derek has had more than that number of viewers a number of times and averages about 200,000 when it premieres. There is an audience for Canadian shows. The task is finding the right shows and the right market. Producers take all the risk. They conceive the ideas and fund the development, often before a broadcaster is involved. We have research and development costs. We then try to find a home with these broadcasters. We take the financial risks of the production. The broadcasters and the fund put up a portion, but we still must fund the balance. We must go to an interim bank and take the risk that something untoward might happen during production. We take those risks. Then we deliver. We take the risk that we are not making widgets. When we talk about television and feature film, this product is not widgets. We can have the best plan and do everything perfectly and the program may not find an audience. That is the nature of the beast. The creative risk and the financial risk on producers are immense, which cannot be provided.
The Deputy Chairman: How many members did you say you had?
Mr. Mota: We have almost 400 that deal with the English language.
The Deputy Chairman: How many of them are in Ontario?
Mr. Mota: I do not have the split.
Mr. Garvie: It is about 65 per cent of the membership.
The Deputy Chairman: Where is the balance?
Mr. Garvie: Probably the bulk is in Toronto. I was chairman of the Ontario producers panel of CFTPA, so my statistics are a bit out of date. Roughly 65 per cent of the membership in the CFPTA was Ontario and about 90 per cent of that was Toronto-based.
Mr. Mota: I think the balance probably would be in B.C. and the heavy production centres across the country.
The Deputy Chairman: Almost all the cable programmers are in Toronto as well, are they not?
Mr. Mota: The cable distributors? We have Rogers.
The Deputy Chairman: No, the programmers themselves.
Mr. Mota: I would say that is fair.
The Deputy Chairman: Outside the ones that must be in Quebec because they are French language, they are all in Toronto.
Mr. Mota: I think that is fair to say.
Mr. Garvie: CTV has addressed that issue with offices across the country, so they have a Vancouver presence, a Montreal presence and a Halifax presence. I believe Global is doing the same.
The Deputy Chairman: CTV and CBC are also headquartered in Toronto?
Mr. Garvie: For English language, yes.
The Deputy Chairman: It always surprises me, but we have Shaw and Videotron, CTV and Global. They are highly successful. They are worldwide companies. We have CBC, which receives something in the area of $800 million in tax funds. We have all the cable companies in Toronto receiving money from residents who pay for programming. They pay for programming when they subscribe to cable.
These companies are all extremely wealthy and yet they need subsidies to pay for the programming that they sell. All these companies are extremely wealthy. All the owners who have programming companies are all millionaires and they sell programming, and yet all the programming, or a lot of it, seems to be paid for by public funds. It is a paradox. It is strange to me, but nonetheless, it exists. How do you explain that?
Mr. Mota: We are on record as saying that the broadcasters should and can do more for the Canadian system.
The Deputy Chairman: I would hope so.
Mr. Mota: The CRTC recently held a major review of its over-the-air television policy. We were a party to that proceeding. We made a strong case that broadcasters are not pulling their weight. Yes, they can do more and should do more. They are licensees in the system and we expect them to do more. That has been our position.
Mr. Blain: The kind of shows that the Canadian Television Fund is funding would not be on TV if that kind of money was not available. We would have only téléréalités, magazines, dramas, kids' shows or documentaries. If that kind of money did not exist, that kind of show would not exist on TV. It is important for Canadian culture to have Canadian stories told by Canadian directors and played by Canadian actors.
Mr. Garvie: It is interesting that CBC, CTV, Global and everyone used to have in-house production and they have all gone away from that in-house production capacity.
The Deputy Chairman: Why would they need it?
Mr. Garvie: They do not need to show it on their balance sheets. They have allocated the risk to the production community and we lever the money.
[Translation]
Senator Champagne: You said that independent producers are being favoured over in-house production and that the Broadcasting Act is intended to support independent producers, to help them to survive.
When I hear Vidéotron say that they are no longer going to invest in the regular cable television funds and that they are going to create their own fund, I am surprised, Mr. Leduc and Mr. Blain, that you are not making a bigger fuss.
The risk is that everything may end up being done automatically internally. JPL will get everything and it will be too bad for everyone else, they will have to stand in line and pick up whatever other work is available.
Moreover, the current problem with film and television will be made worse. Radio-Canada will want to cooperate and say that it is going to focus more on services. Post-production will occur in Radio-Canada's own studios. The same will be true of the NFB which operates 24 hours a day seven days a week while the other post-production houses have a hard time making it because there is no work. If, on top of all this, Vidéotron no longer works with the Canadian Television Fund, but with its own fund, everything will be done at JPL. Does the Broadcasting Act really support independent production?
Mr. Leduc: At best, you could call the fund Vidéotron is proposing a business plan, focusing on "free service.'' That flies in the face of the way things have been done for the last quarter of a century and which has been highly successful. You can talk about tax credits, Telefilm Canada, system grants, but the fact is, the model worked.
The francophone viewing public is onboard, and this is increasingly the case with the English-speaking viewership. The production community is creative; the diversity of supplies has created healthy competition between the national public broadcaster and the private broadcasters.
Right now, regardless of whether you make a big fuss or not, it will really depend on who is listening, but we are really astounded by Quebecor's proposal. I think that Senator Fox was referring to the contribution to the cable television system, and it is due to both the broadcasting and territorial privileges and monopoly. We are talking about balance within the system. If you go to the grocery store and you take the can of peas sitting right in the middle of the shelf, well I do not know if the rest will stay sitting where they are or whether the cans will start to wobble and come crashing to the ground. Quebecor wants to go it alone, and in my opinion that goes against the best interests of the whole system.
Senator Champagne: My colleague Senator Tkachuk referred to companies like Astral and Global which are all millionaires. I can see how Astral handles its productions, it goes to the cable TV operators' fund, pays actors a reduced fee because the program will be broadcast on a specialized channel, and they sell advertising time along with the programs. Obviously, it is a way to get very rich. I do not know if that benefits independent production and whether it contributes to actors having trouble making ends meet. When are the producers that are part of your association going to address the problem?
Mr. Blain: I am just going to take a step back and answer your question a little late. Yes, we have made a big fuss. We believe this proposal is completely unacceptable.
Once again, given that cable television operators are allowed to not enjoy monopolies, and basically only transport signals, then they should make a small contribution to the whole program production system.
These corporate citizens behaved very badly and we have an expression for that, and this is that they have tried to take everything but the kitchen sink. They are not good players and we have made a really big fuss.
Then Astral comes on the scene: Astral is a profitable company enjoying a substantial profit margin and it has always behaved like a good corporate citizen. It has never tried to monopolize things. It has given production to independent producers. You may ask whether it is making enough money or not enough money. I cannot answer that question. But I can say, is that Astral has given all its production to independent producers. It is true that it is a smaller market. It is true that you can probably justify less expensive licences because the viewerships are smaller. Some specialty channels boast about ratings of 50,000, which is a drop in the bucket. The fact remains, that it was a new player which generated a lot of production. Part of the production will contribute to the cable television operators' fund. Some productions do not qualify for the Cable Television Fund; I am referring to more lightweight production. But all the same Astral has been a player that has generated a lot of production. I was there at the time when in 1983 Mr. Fox announced the Broadcast Fund. This fund marked the start of Canadian television. Investment started to flow in. They started to produce interesting programs. Canada became a major exporting country of programs recognized internationally. We have been successful in producing shows like C.R.A.Z.Y which was sold in over 50 countries. There is now a lot of Canadian production, and we cannot let it fall by the wayside. The reason why the production side has worked so well in Quebec is that there has been ongoing investment over the years. We have got the Quebec public used to seeing Quebec narratives. This took a little longer in English Canada because of the lack of the language barrier with the main competition, the Americans, but things are moving on that front. It is still going to take a little more time for us to demonstrate that we are capable of producing interesting programs in Canada. Now is not the time to abandon the system and to listen to proposals like the one Quebecor is making.
These people seem to think that the money is theirs when that is not true. They are collecting money which needs to be shared around. They are carriers.
I would like to finish by saying that this is perhaps one of the unusual consequences of media concentration. When a cable television distributor owns channels it becomes a little more selfish than if it was simply just transporting the signal.
Senator Champagne: Fifty years later, Quebecers still watch Les belles histoires des pays d'en haut. This program still enjoys ratings of 250,000 to 300,000 viewers on Art TV. That is pretty amazing.
Mr. Leduc: Is there much in the way of operating rights?
Senator Champagne: Very little on Art TV.
Mr. Leduc: Had I known, I would not have asked the question.
Senator Champagne: Very, very little.
[English]
Senator Munson: I want to follow up on Senator Tkachuk's statement about millionaires. They are all millionaires who buy cheap American shows that saturate the Canadian market with a lot of garbage. It is simple.
Last night, I went home, and you talk about tears. There are 73 channels — thank God the Montreal Canadiens beat Toronto last night because, besides that, someone has his head chopped off or a cop chases someone down the street. We watch and watch, and what do we get? If that is the way they want to be millionaires, so be it. It is simple. That has nothing to do with my question. Senator Tkachuk likes to get me going on these things. He is a private-sector guy.
Quebecor puts in $18 million and gets back $16 million, on my understanding.
Mr. Blain: It is the reverse of that.
Senator Munson: How does that work? What do they do with the money, and what is their problem? I can ask them next week.
Mr. Leduc: You may ask them. Truly, I would not presume to know what the game plan is, but I read the proceedings of the CRTC hearings in November, I believe, and I read the proposition for opting out. At the CRTC hearings, Quebecor asked for a few things. They asked that TVA access money directly from the cable. TVA cannot do that now because the bylaws are not built that way. Broadcasters that send a terrestrial signal are not paid money from the cable company, so they asked to access that money.
They also asked to be relieved of the maximum of 12 minutes per hour for commercials. They asked to be released from their mandatory CRTC obligation of priority programming regarding drama, variety and documentaries in prime time.
I am not presuming, but I would say, that they do not like regulation. The industry has been a regulated business so far.
Mr. Mota: The question from our perspective is, should commercial or corporate self-interest unilaterally decide what kind of funding system we should have in this country to support Canadian television and feature films? In supporting cultural policy objectives, in our view, two corporate groups should not dictate what those terms should be. That is why we have a comprehensive board at the CTF. Various stakeholders bring expertise to the table to make sure that the system is the one that benefits everyone as a whole in the end, and not only one or two individual groups.
Senator Fox: My first question is to the CFTPA. Is it not a fact of commercial life that if there were no regulations and no broadcast fund, the economic interests of the broadcasters and cablecasters of the country would be to broadcast essentially American programming, since they could buy it cheap and sell it high in the advertising marketplace? That reality would determine the type of broadcasting system we have in Canada.
Mr. Mota: I think that assessment is fair. One thing we have been saying in the television policy review is that in this new world with new media and the opportunity where producers can bypass broadcasters — Hollywood studios can bypass broadcasters and sell directly to Canadians — we would think broadcasters in this country would take notice and perhaps put more money into producing homegrown Canadian television, and to make it succeed and be successful on par with American fare. Frankly, there is no guarantee in the future that they will be able to buy that cheap U.S. programming. At some point, some company in the U.S. may determine that it does not want to sell to a Canadian broadcaster anymore. What then happens to their business?
We think broadcasters need to think long term and spend more to make sure we have more Corner Gas success stories, and the many others we have cited for you.
Senator Fox: We may think we have a lot of American programming on our channels now, but absent the regulatory framework that was set up over a period of years, which includes the broadcast fund, we would be totally dominated culturally by the U.S. system because of the economics. Whether people like it or not, if broadcasters act in the interests of their shareholders, they will buy American programming. We all know the numbers. It is inexpensive to buy an hour of prime-time American programming. In addition, advertising, compared to what they would receive by putting on a Canadian show, is much higher. Basically, the marketplace would lead us directly to an American broadcasting system.
Mr. Mota: Absolutely.
Senator Fox: I want to come back to a few things that Vincent Leduc and Jacques Blain said. It is a back to the future.
[Translation]
It is not the first time in our history that we are asking cable television operators to help fund Canadian programming. There were quotas developed by Pierre Juneau and then the CRTC.
There was quite a sea change several years ago when Telefilm Canada was created and a tax on cable television operators was instituted. That is when the operators realized that in exchange for their monopoly they would have to make a financial contribution to Canadian production. The Canadian Film Development Corporation was operating at that time.
[English]
The Canadian Film Development Corporation, CFDC, has a total budget of $4 million. Perhaps Ms. Fortin will remember that their overhead was about $1 million. That left $3 million for Canadian program production. Because of that budget, there was little private program production in this country; and all of this in-house production was done by related companies.
That 9 per cent created the broadcast production fund, which was subsequently replaced — with the support of all subsequent governments — to ensure that we had a strong private sector. What do I say when people tell me we have strong players in this area at the moment? I say fantastic, great, it is a success story. We started the turnaround some time ago and because of that turnaround, there are strong Canadian players like Astral Media, and strong cablecasters like Rogers, Videotron and Shaw. Their development happened, in part, because they are smart business people, but also in part because of the environment they were entitled to operate in. If they did not have that environment, they would not have been as successful as they have been.
This continuum in Canadian broadcasting policy has been supported by all governments over a period of time, and it seems to me that it is not a novel idea to say that cable companies should make a contribution to Canadian programming. I would say, and I wonder if you agree with me, that it is fantastic that we have strong Canadian players now. Not only do we have strong Canadian broadcast players, we have a strong industry.
[Translation]
These groups are quite capable. Nowadays, we have first-class technicians working for us. I do not want to talk about the current problems with the IATSE, the APFTQ and the AQTIS. More and more Americans are coming to shoot their films in Canada. This is because over the last 30 years we have developed expertise when it comes to development, production, financing, and labour. If we were to take away one of these components, the whole system might fall apart.
I would be tempted to ask you if you agree with me, but I think I already know the answer. Nevertheless, I would like you to comment on this Mr. Leduc.
Mr. Leduc: You have raised an important point. The industry is quite solid in Quebec. But this independent sector might really be shaken up by what is going on right now.
I spoke with a colleague of mine who is a producer last week and he never uses the Canadian Television Fund. He said that a strong and well-developed Canadian production system keeps him in work and brings Americans here. I might go so far as to say that it is excellent that IATSE is interested in a small union like AQTIS — the problem may be the way it is going about it. This means that they want to come and produce in Quebec, British Columbia, Ontario and Nova Scotia, using American money, thereby benefiting Quebec's and Canada's economies. But you need to be skilled to be of service to these big international experts. If you chip away at the system and if the broadcasters producing these kinds of shows are not skilled enough, you will see the demise of this industry.
[English]
Senator Fox: I mentioned the private sector being successful and that is fantastic. I also want to say that I think French CBC in particular — and Ms. Fortin has a long association with the French CBC — has been an extraordinary success story. I think English CBC under Robert Rabinovitch will also continue to occupy an important place and make the CBC, which is an essential public service in the country, an even better one.
Senator Zimmer: I have a supplementary question to Senator Fox's, and I enjoyed his passionate statement. He is bang-on in that there is economic viability — and you have hit the matter on the head, too. Economics is important, but Senator Fox said it clearly. I become frustrated when I watch programs in the evening. I want to see Canadian content; I want to see my country; and I want to see the values and the culture.
I tune in to four one-half hours of The Simpsons and the values are not there. I see the lack of values demonstrated in the streets, and can demonstrate that they are watching these programs when they quote from The Simpsons and the bad attitudes and values that come with it.
I totally support that statement and the fact that we have to have an equal balance here. Yes, we have to be economically successful. However, the Canadian content is not only Canadian content. We must make sure of the quality and the values that it teaches our young people. When I see those programs, I become upset by the fact they are not teaching any values to young people. It is demonstrated on the streets that they use those as values to go out into the world and demonstrate what they do. Whatever you do to continue what you are doing, I support you.
Mr. Leduc: I add only that Têtes à claques is popular in Quebec. Young kids on the street use all kinds of expressions from that show.
Senator Munson: For a point of edification, two nights ago I watched La grande seduction with my wife, which is not a documentary but a film based on a Montreal or Quebec City doctor that was forced to serve as a doctor in a little village in the Gaspé. I recommend this show to everyone.
The committee adjourned.