Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 10 - Evidence - March 27, 2007
OTTAWA, Tuesday, March 27, 2007
The Standing Committee on Transport and Communications met this day, at 9:35 a.m., to examine and report on the objectives, operation and governance of the Canadian Television Fund.
The Honourable Lise Bacon (Chairman) in the Chair.
[Translation]
The Chairman: Good morning everyone. Today we are meeting in order to examine the governance of the Canadian Television Fund.
We have before us, from the Canadian Broadcasting Corporation, Mr. Sylvain Lafrance, Executive Vice-President, French Services, and Mr. Richard Stursberg, Executive Vice-President, English Television.
I would like to welcome you to our committee. We will first of all hear what you have to say to us and then we will ask you questions.
Sylvain Lafrance, Executive Vice-President, French Services, Société Radio-Canada: Madam Chairman, thank you for your invitation to appear before you today to discuss the Canadian Television Fund. I am accompanied by Mr. Richard Stursberg, who was introduced as the Executive Vice-President of English television, but who was, I would also like to point out, the former President of the Canadian Television Fund and the former President of the Canadian Cable Television Association. So he is very familiar with the history of the Fund.
At the outset, let me just say that the Canadian Television Fund is a critically important element of the Canadian broadcasting system. Without the support provided by the CTF to independent television producers, there would be very little in the way of Canadian television programs that would capture Canadian experiences, sensibilities, perspectives and showcase actors, writers and directors who are Canadians.
In English Canada, we would be a nation entertained almost completely by themes, experiences and stars of other nations, primarily the United States.
On French television, the Fund ensures a healthy balance between public and private television choices. It ensures a variety of television programs, whether it is in drama, documentaries, or children's television. That balance is one of the goals enshrined in Canada's Broadcasting Act.
Thanks to the CTF, we have a vibrant independent television production sector in every region of the country employing approximately 20,000 people in creating 2,300 hours of prime time Canadian programming. And it is sufficient. Every dollar of CTF money generates more than $3 of Canadian programming. From the viewers' point of view, the CTF is also increasingly successful. Canadian audiences to CTF-financed productions are now up across all programming categories. Across Canada, English television audiences are up from 32 per cent in 2003 to 34 per cent in 2005. On French television, they are up from 32 per cent to 56 per cent for the same period.
[English]
Richard Stursberg, Executive Vice-President, English Television, Canadian Broadcasting Corporation: For broadcasters, the Canadian Television Fund permits the establishment of effective partnerships with the Canadian independent producers for the creation and airing of Canadian programming.
As you can see from the slides we have circulated this morning — these are the English networks — CTV and Global are at the top. If it is in blue, it is foreign programming; this is during prime time from 7 p.m. to 11 p.m. If it is in red or green, it is Canadian, and the green ones are supported by the Canadian Television Fund. The same thing is true for the chart in French, which we will come back to.
The results show that Canadian programming is an important part of CBC/Radio-Canada's prime time schedules. We use the fund extensively to support what is, certainly in English, overwhelmingly the most Canadian schedule available.
These slides also reveal the basis and importance of the so-called CBC/Radio-Canada envelope. The effect of this envelope is to allocate 37 per cent of the Canadian Television Fund money to independent producers whose television programs are broadcast on CBC and Radio-Canada. This is an important point. The money, of course, is not actually subsidizing the CBC directly; it is used to hire independent producers to make programs for the CBC.
The government created this envelope because CBC/Radio-Canada is the only broadcaster with the shelf space in its schedule to offer Canadian programs when most Canadians are watching television, which is during prime time. I pause on this for a minute because I think it is fundamental. Real prime time in Canada, as it is throughout North America, is between 8 p.m. and 11 p.m. in the evening. The CBC is the only major English language broadcaster whose prime time schedule between 8 p.m. and 11 p.m. is available for Canadian programs.
CTV and Global schedules are totally taken up with U.S. programs, because that is their business model. Of course, it is difficult to be successful in terms of Canadian shows for Canadian audiences unless you put them on when Canadians are watching. I just make that point because I think it is at the root of much that is before us today.
As you know from other witnesses who have appeared before you, CBC does not receive CTF money. As I mentioned earlier, independent producers are the recipients of this funding. The CBC/Radio-Canada envelope created by government also recognizes that the mandate of a public broadcaster is different in that it should not simply offer the programs that can chase the largest audience in competition with private broadcasters but should, instead, offer high-quality Canadian programming as per its mandate; although, I must say that we do better in terms of audiences than the private broadcasters do for Canadian programs. We take approximately 50 per cent of the drama money available in English inside the CTF, but we have two thirds of the audiences for English Canadian drama programs. In that sense, it is a more efficient utilization of the money.
By making more and varied Canadian programming available when more Canadians are watching, the CBC envelope is, therefore, an effective mechanism for achieving the objectives of the CTF promoting Canadian culture and identity. I should also point out that in order to promote this objective, the government originally had set aside 50 per cent of the CTF for productions airing on CBC and Radio-Canada.
[Translation]
Mr. Lafrance: Another key aspect of the Canadian Television Fund is its independence. Since its creation, the CTF has been required to act independently of the overriding financial interests of any particular stakeholder, group or corporate interest.
We believe this independence is vital to the continued success of the fund. In fact, we believe that the fund could become even more effective if greater independence was established at the board level. These issues are to be examined further through the CRTC review process now underway. We are participating in this process.
But these kinds of ongoing improvements are part of how the fund works. And let me be clear, the Canadian Television Fund is working extremely well; we need to focus a bit on the results. Without the support of the CTF, there will be very little independent production in Canada, and CBC/Radio-Canada would be hard pressed to continue to offer the Canadian programming that Canadians want; the programming that is essential to our mandate.
We would be pleased to answer your questions.
The Chairman: It seems to me that one of the main causes of the current crisis is the arrival of new broadcasting platforms. Numerous issues with respect to broadcasting and program funding force us to also examine the situation in the wake of recent technological developments. The television world is evolving at breakneck speed, but this is nothing new to you. This industry must constantly adapt. Shaw Communications and Vidéotron sounded an alarm by drawing attention to what they felt were deficiencies in the fund in its present form. There are certainly changes that could be made to the overall way that we fund the CTF, so that more consideration is given to the increasing importance of new broadcasting platforms. Everything is changing very quickly right now.
Do you feel that the sector will be able to respond quickly to new technological advancements? Do you think it is possible to adopt a new approach to broadcasting rights in order to take the Internet or video-on-demand into account? Do you think that the various sector stakeholders will be able to sit down at the same table in order to find a solution that is acceptable to everyone and give consideration to the emergence of multiple broadcasting platforms?
Mr. Lafrance: As regards your diagnosis that changes are occurring rapidly in the world of television, I believe that everyone would agree with that and we see the same symptoms. Things are occurring very quickly and the arrival of new platforms has disrupted the entire economic model for the television industry. That will result in numerous changes. We believe that the CTF can adapt. We will undoubtedly have to suggest changes to its governance system so that it can adapt quickly.
That being said, we must ensure that we do not throw out the baby with the bath water. We must remember that the CTF, as shown by the results, has enabled us to create Canadian programs. It has enabled us to maintain our cultural identity and the growth of an industry.
In Quebec, the television industry is without doubt the cultural industry that has had the most success in retaining its audience in Canadian programming. French television in the country has been a success story since it was created in 1950 thanks to tools such as the fund. We are saying let us be careful, let us not throw out the baby with the bath water: Yes, we must make changes but we must do so in compliance with the Broadcasting Act, in the spirit of the act and with tools that have ensured our success for 60 years.
[English]
Mr. Stursberg: Mr. Lafrance and I think it is fair to say that all broadcasters in the world today are struggling with this exact point. All of us are in the process of transforming ourselves from television companies to content companies. That means we must ensure that we no longer think of ourselves as offering Canadians content on one platform only but on all platforms in whatever way that Canadians find most convenient and attractive to consume the content that we produce. Whether that content is news, children's shows, sports, documentaries or whatever it happens to be.
The CBC put a significant proposal to the CTF on how to deal with these new rights. The difficulty with the new rights is that no one is clear on what the financial models are that will allow us to monetize. We simply do not understand, because this is new territory. We do not understand the extent and nature of the costs that will be involved in monetizing them.
However, we do understand that for many of the new platforms, whether mobile or internet, the big driver will continue to be television. Therefore, we said to the independent producers that, since no one truly knows yet, perhaps we should venture forward together. The CBC will distribute them across all the platforms — mobile, internet, and television, which we will use to promote to those other platforms. We suggested that we do a deal whereby we simply split the available revenues, whatever they are, 50/50 between ourselves, and we absorb the costs. We thought that would be a good thing because it would allow people to learn together for a brief time and would allow Canada to move forward quickly into these environments. Unfortunately, the television producers declined that opportunity, and now we think that Canada has been constrained from moving forward as quickly as it could have done.
[Translation]
Mr. Lafrance: It is essential that the players come to an agreement because it is the very spirit of the Broadcasting Act that allows for the fact that the public will turn to the private sector and that independent production must play an important role. Many players have to come to an agreement: the cable industry, artists and producers. They must agree because that is the spirit of the act and, furthermore, because we are in a cultural industry that is extremely fragile. We are not in an industry which, in Canada, could survive solely on the basis of market forces. We are in an industry which inevitably will demand some type of regulation. Otherwise, the cultural industry would be under tremendous pressure and, in the final analysis, so would Canadian cultural identity. As I see it, we are not talking about a minor issue here, but rather about a fundamental question, namely our cultural identity.
The Chairman: Radio-Canada has made considerable efforts to remain on the cutting edge of technology and provide its viewers with several platforms they can use to access content. Significant resources have been allocated to the CBC/Radio-Canada's website and now many programs are entirely available on-line and can be viewed whenever we want.
I would like you to tell us about your strategy for integrating the various media platforms at Radio-Canada. Have you given any thought to charging clients for downloading Radio-Canada programming? Will you also let Vidéotron provide its Illico subscribers with video-on-demand for Radio-Canada programming? I would like to have an overview of the work you have done in transitioning to high-definition technology at Radio-Canada.
Mr. Lafrance: That is a broad question. The answer is yes for almost everything. Yes, we do intend to be present on many platforms. First of all, as the largest producer of French-language content in Canada, today we have to be able to provide this content using the platform best suited to the client, and there are differences depending on age, and so on.
The good news is that Radio-Canada has always managed to adapt to the new technologies, whether it be the arrival of colour television, FM stations or specialty channels. Radio-Canada has always been at the cutting edge in terms of the Internet and this applies to our English and French service. Today we are the leader sites for Internet news.
In answer to your question ``will we be providing the service as video-on-demand or using other things?'' I would say yes, of course, subject to some legal issues that are extremely complex at the moment. As a public broadcaster, we cannot play fast and loose with these issues. We have to reach an agreement with licensees and this is important for us. We must participate in creating a model that will ensure that this distribution takes place.
Currently, we are, for example with video-on-demand over the Internet, providing programs for which we hold all the rights, especially news programs. But in the case of other programs, it is naturally more complicated, whether we are talking about programs where we share the rights with producers or with other parties that have rights, musical rights, artistic rights, et cetera. We intend to be present on all of these technologies. I like to say that it is not technology that stops me from sleeping at night, but rather the underlying cultural issues. We know how to deal with the technology. And at Radio-Canada, we have for a long time now also known how to come up with an economic model which will adapt to this technology. Right now, dealing with the multiplicity of media, international media, the arrival of all these airwaves, force us to deal with some fundamental questions regarding content, and we need to devote a great deal of thought to this matter. But yes, we do believe that the public broadcaster in the 21st century must provide content on all of the platforms to Canadian consumers.
[English]
Mr. Stursberg: It is fair to say that both Radio-Canada and the CBC have done a good job. Right now, the number one news and information website in Canada is CBC.ca; it is the same thing in French. We were the first ones to put Newsworld on cell phones. We were the first ones during the Torino Olympics to make arrangements by which people could get the Olympic games not only on television but also on cell phones. You could get them with hourly updates and on a video-on-demand offer we worked out with Rogers. The CBC has spent a lot of time ensuring that we can make the transition.
Mr. Lafrance makes the same point as I would make.
[Translation]
At the end of the day, the technological issues are not the most important issues. It is the cultural issues that are the fundamental considerations.
[English]
If we are to continue to reinforce Canadian identity, then we must keep our eye on precisely that as the key question.
[Translation]
The Chairman: The CRTC has set up a Canadian Television Fund taskforce in order to make recommendations on ways to improve the way that the fund is operated. Is Radio-Canada participating in the first phase, which is currently underway, and whose goal is to consult with the main players in Canada's television sector? Have you already given some thought to options that could be put on the table in order to change the way that the fund operates? And how do you think we should deal with certain issues raised by Shaw Communications and Quebecor, such as the composition of the board of directors?
Mr. Lafrance: Of course we will be participating in the process. We will be meeting with the CRTC very soon on this matter. We are looking at several options at present and we agree that there may be some questions about the governance of the fund. Many of the people sitting around the table, at present, are very close to the decisions. That may be problematical and could lead to us advocating the status quo, which is dangerous at a time where we need to adapt quickly. We will be making some suggestions on that issue.
We also think that the fund should focus on its funding role. The CTF has almost become a regulatory body, an arbitrator between various players and, as far as this aspect is concerned, it has broadened its mandate tremendously. We think that if it reverted to its role as a funding agency, it would perhaps be simpler to manage and it would better achieve its objectives and probably improve its ability to adapt.
Right now, the fund is extremely difficult to manage because it has become involved in managing numerous files that are peripheral to its funding role.
[English]
Senator Tkachuk: Could you help me on the colour coding here? If we go to the CBC, CTV and Global, what is the difference between the red and the green? Blue is non-Canadian.
Mr. Stursberg: Blue is non-Canadian; red and green are Canadian. The green are the Canadian shows supported by the Canadian Television Fund. That is how to read it. For the rest of the shows on CBC — for example, Dragon's Den, Fifth Estate, Under Dogs, Hockey Night in Canada — there is no Canadian Television Fund money in those shows.
Senator Tkachuk: Is there Telefilm Canada money in those shows?
Mr. Stursberg: No.
Senator Tkachuk: That is CBC money. Is that correct?
Mr. Stursberg: Yes.
Senator Tkachuk: Are there any shows made in Canada that have no government subsidies?
Mr. Stursberg: Yes; Hockey Night in Canada, for example.
Senator Tkachuk: The CBC is funded by the taxpayer, though.
Mr. Stursberg: Let me do it this way. For CBC English television services, about 55 per cent of the total money comes from private sources. There are two kinds of private sources. Private source No. 1 is for Newsworld, for example. It is financed like any other cable channel. It is financed by cable fees, plus advertising.
For the CBC main channel, approximately $200 million of its financing comes from advertising. For certain properties like Hockey Night in Canada, their rights costs, plus production costs, are more than completely covered by advertising revenues. They generate a positive margin that we use to finance some of the shows that do not make as much money or that do not make any money, for that matter — that is, shows that are difficult to finance, such as Canadian drama.
Senator Tkachuk: You named one. Are there others?
Mr. Stursberg: Professional sports make money and Hockey Night in Canada makes money. Those are the ones that make money at this point.
Senator Tkachuk: Basically, our landscape of production in Canada is financed by the taxpayer. Whether it is the Canadian Television Fund, Telefilm Canada or the National Film Board, it is some government entity.
I will get to the other part of it now, which is cable. How much money does CBC receive in its cable fees for its news shows?
Mr. Stursberg: Right now it would be about $65 million in cable fees for Newsworld.
Senator Tkachuk: When I watch the cable channel, many of the shows are the same as on CBC. In other words, your national news is just rebroadcast. You run your programming back and forth quite substantially. How much of that $80 million is spent on independent new production? What shows are produced out of that?
Mr. Stursberg: I want to back this up. It is important to understand that there are no Canadian shows — that is, no comedy, no drama, no children's program that I know of, no documentaries done by Canadians that make money. Period. This is not new; this has been the case since the beginning of Canadian television. In fact, the economics of Canadian television programming are quite intimidating. That is not new and it is not unique to the CBC. Exactly the same thing would be true of CTV's Canadian shows, or Global's Canadian shows or anyone's Canadian shows.
To come back to your question about Newsworld, it offers more original Canadian programming than any other news network. The only place in which it actually goes back and forth between the two is that we do put The National on at 9 p.m. on Newsworld. Aside from that, every night at 10 p.m. we have independent documentaries. Throughout the course of the day we have a new show that begins at 6 a.m. in the morning and runs right through until we put the BBC news on at 6 p.m. in the evening; these are continuous news breaking shows. There is some overlap.
We have tried to ensure that the totality of the resources available to the news department, which is the largest collection of international bureaus available to Canadians, is used in the most efficient way possible to feed both Newsworld and the main network in terms of its news offerings.
Senator Tkachuk: The $85 million covers an eight-hour segment repeated throughout the day?
Mr. Stursberg: The first news show begins at about 6 a.m. It then runs on until about 9 a.m. or 10 a.m. There is then a second news show that comes on. These are all news shows, so the hosts change because they are tired out. We continue throughout the course of the day like that until we get to the evening.
We have the politics show at 5 p.m.; then we come up to the 6 p.m. show, which is typically the BBC show. On the main channel at 6 p.m., it is the local news, which has gone back up to an hour again. Then we come back into it.
From 7 p.m. to 9 p.m., we have typically more news between 7 p.m. and 8 p.m., followed by George's show and then Peter Mansbridge at 9 p.m. At 10 p.m., the documentaries begin. That is more or less what Newsworld is doing.
Senator Tkachuk: The question concerning the Canadian Television Fund that we have been talking about here is that most of the shows go to CBC. Shaw feels that if they pay the money, they should control the cash. Apart from that, how much of the CBC programming is made up of CTF money?
Mr. Stursberg: It is right there in green.
Senator Tkachuk: What percentage is it of that?
Mr. Stursberg: The CBC's total take out of the CTF would be about $96 million, which is split two thirds-one third for English and French. We would take approximately $60 million and they would take about $30 million. The total budget of CBC Newsworld plus the main network is about $600 million.
May I say one thing on the subject of whose money it is? I have to track back a little bit as to how this happened. I used to work for the cable television industry. I was the head of their association for a number of years. This is what happened in the old days: Because of the way the cable companies were regulated, every time they wanted to make a capital investment to upgrade their systems, they would have to go to the CRTC and tell them they needed to do this. The CRTC would say, ``Fine, we will now allow you to increase your basic rate.'' If they needed an extra dollar to cover their capital costs, the CRTC would say, ``You can have an extra dollar, but when those capital costs are fully paid in five years, the rate comes back down to what it was originally supposed to be.''
What happened was that when the basic rate was supposed to come back down a number of years ago — if I recall it was around 1995 or 1996 — the cable industry said to the CRTC, ``We have a good idea; rather than letting the basic rate come down, let us split it 50/50. We will keep 50 cents of the dollar and we will put 50 cents of the dollar into the Canadian Television Fund.'' Of course, that was never their dollar to begin with. That dollar actually was the consumer's dollar.
As a result, the cable companies got 50 cents that was not otherwise owing to them, and the other 50 cents went into the fund. The irony is that they are now claiming that the 50 cents they paid into the fund is somehow or other their money. It was never their money in the first place. The entirety was consumers' money. They got paid once, the first 50 cents, and now they are claiming the second 50 cents is their own. It is a most curious argument.
The difficulty is that a lot of this has been lost because it is now over 10 years ago. You have to be a little long in the tooth in terms of one's memory of these events to understand that this money was never theirs in the first place.
Senator Tkachuk: We have all these entities that are taxpayers' money, including your corporation. Would we have a successful television industry without any taxpayers' money? Would there be shows made without anyone subsidizing anything?
Mr. Stursberg: Yes, I think there would be some news shows and there would be sports.
Senator Tkachuk: There would be no drama?
Mr. Stursberg: No.
Senator Tkachuk: Nothing?
Mr. Stursberg: There would be no drama, no comedies, no documentaries, nothing — and there would be no public affairs shows. I can see you smiling at me. I know you find that hard to believe.
Senator Tkachuk: I find it impossible to believe.
Mr. Stursberg: I can tell you this. This has been true in Canada since the very beginning of broadcasting — not just since the beginning of television, but since the beginning of broadcasting. If there was no public funding for this, there would be no drama, no comedy, no documentaries, nothing. There would be, I absolutely agree with you, news and sports, but that would be it.
There also would be lots of American programming; there would be even more American programming, if that is humanly possible to imagine.
Senator Munson: Can the CBC survive without the Canadian Television Fund?
Mr. Stursberg: You can see right here; take all those things that are in green and knock them off. That is pretty much what will happen.
Senator Munson: There are those who argue that you have the best of three worlds. You have tax dollars, you have advertising dollars and you have independent producers delivering programming to the CBC through other dollars. I would like to have your arguments.
Mr. Lafrance: We are not the only ones who have a few sources of dollars. If you take Quebecor, for example, they have money from cable subscribers, tax credits and advertising. Television is always a kind of construction of an economic model. They have all those types of revenues, so it is different.
I will give the example for French programming. We have public money, it is true; but we have to be present all across Canada. We have to produce, and we do produce, more information. We launched 14 new French Canadian dramas this year. We have shows about science, about religion. We are a very different division and so we participate in the enrichment of the system, and that is very important. That is why we have this difference with public money, and that is why we are different.
Senator Munson: Tell me how those tax credits work in the private sector.
Mr. Stursberg: The point that Mr. Lafrance makes is fundamental. If I can pause on it for a second, there are many different kinds of public preferences that are granted in this country for broadcasting. All broadcasting is built on public preferences, whether those grants are licences that are protected by foreign ownership rules or licences that protect people from entry by other competitors; whether it is simultaneous substitution rules in English that, in fact, protect their advertising market; whether it is access to tax credits — tax credits simply finance the labour component of productions; whether it is access to the Canadian Television Fund; whether it is access to cable subscription fees that are dictated by the CRTC; these are all public preferences.
Of these public preferences, some are available to the private sector and some are available to the CBC. We obviously have nothing available to us by way of simultaneous substitution because we do not put on American shows. They put on American shows and they get that preference.
In common, we have access to cable fees, tax credits and the CTF. However, the idea that somehow or other in this country there is a public sector and a private sector, with an absolutely clean cut between the two, is not how the broadcasting system has ever worked.
One thing about the question on whether we should have 37 per cent of the fund, interestingly, the fund goes back a long way; Francis Fox was the inventor of the fund when he was there. He invented many good things when he was the Minister of Communications.
I had the pleasure of being his flunky at the time — not in his political office, I might add. I was an official in the department at the time when he was the minister; and when the fund was first established in 1983, it was structured so that 50 per cent of the fund would go to the CBC. Then when the cable industry set up its first round of contributions to what was then called the licence fee program, up to 50 per cent of that money also went to the CBC. The reason they did that was in recognition of the fact that the CBC had a unique opportunity to be able to put programming on in real prime time when Canadians were actually watching television.
If you want to spend your money efficiently through the CTF, then 50 per cent of the drama money comes to us. Two thirds of the viewing of Canadian drama is on the CBC. The reason for that is simple: deep primetime in English Canadian television is only available for Canadian programs on the CBC. Everyone else's network is taken up with U.S. programs during the times when Canadians are watching television.
Senator Munson: Vidéotron argued to Quebecor that they wanted to go their own way, have their own production houses, hire their own producers, and do all of it in their own way. All of that would be new for them in comparison with what has been described as the shared way on the television highway. There is a task force and everyone is trying to work together again but Vidéotron might go its own way. Are independent producers able to raise their own funds to be able to work within the confines of the CBC and while allowing the private sector to do its own thing?
Mr. Lafrance: First, Quebecor argues in the proposal that the money, as Mr. Stursberg explained, is from their subscribers, who have paid for the television service that they receive. They receive television from Radio-Canada, CBC and many other players. The subscribers pay that money to enrich their own system. First, the money does not belong to Vidéotron or Quebecor but to the subscribers. We have to remember that.
Second, the proposal for Quebecor raised the question of concentration, in particular the Quebec market. We have never seen such a large horizontal and vertical concentration in media and culture anywhere in Canada. It is a big problem for the future. If we want to respect the spirit of the Canadian Broadcasting Act, there should be some independent producers as well and an assurance that all players can participate in the creation of programming for television. We must be prudent in that style.
There is a great deal of intellectual scope and the spirit of the law is such that all players should work together to enrich the Canadian system as opposed to all players operating from one side only. That is important to keep in mind.
There is likely a balance between the money that the independents put in and what they take out. However, it would set a precedent if each player were to play alone. That would be quite dangerous for the health of our current system. We are in a cultural industry, which is an unusual market.
Senator Munson: My question is for Mr. Stursberg. What does the CBC receive in terms of tax dollars? Is it enough?
Mr. Stursberg: Is it enough? I would not put it that way; I would say it slightly differently. I would say that it depends on what you want the CBC to do. It is impossible to answer the question of what the right amount of financing is without asking the question: ``What do you want us to do?'' We have, for a short time, taken the view that the right way to approach this question is not in the abstract but is in the way that the British government approaches the BBC. The British government and the BBC enter into what constitutes a contract. The government tells the BBC what programming it wants to see on BBC in the various categories, including drama, comedy, news, children's shows, as well as the number of channels, et cetera. The government and the BBC then discuss, negotiate and conclude the costs, which includes signing a 10-year deal. Seven years into the contract, they reopen the discussions for the next contract.
The best way to approach the issue of the right level of financing for the CBC is to have exactly the same kind of conversation between the government and the CBC. If people believe deeply that we should have great Canadian drama and comedy for Canadians to watch and listen to, then we are perfectly happy to tell the government what it will cost. There are no secrets in any of this, because it is completely straightforward.
Senator Tkachuk: Should the people not decide that?
Mr. Stursberg: Absolutely. I agree with you that they should decide.
Senator Tkachuk: Why should they not decide it through the cable industry? In other words, if they wish to buy this Canadian drama content, for example, then they can pay for it directly from their homes.
Mr. Stursberg: I am not sure how that model would work.
Senator Tkachuk: The model would work without the government, whereby Canadians would decide what they want and pay CBC directly for it. If they did not want the program, they would not pay for it.
Mr. Stursberg: I take your point. I actually agree with you, although I do not think the mechanism that you propose would make that happen. When we finance cable channels, people go to the CRTC, apply for a channel, and tell the CRTC how much money they want. The CRTC then agrees to the amount of money and how the channel will be carried on the cable company. The cable channels are not decided by the people. However, I take your point that we truly need a conversation between Parliament and the CBC, with Parliament reflecting what Canadians want as to what this contract should look like and how it should be structured and financed. I take your point, senator, that the contract should be between Canadians and the CBC and, presumably, mediated by Parliament.
Senator Munson: Briefly, in a perfect world the CBC should get out of advertising, tax us a bit more, or have a contract like that of the BBC, where it is written in that you pay for it and you watch it.
Mr. Stursberg: I think it might work a little differently. The BBC is one of the few public broadcasters in the world that does not have advertising. It would have to be determined what kind of mix we want for the CBC, and whether there would be an advertising base or public-subsidy base or both and for which programs, such as professional sports, if it were decided to continue with that programming. There are many ways in which we could do this, but that is the kind of conversation that would be useful to the future of the corporation.
Senator Munson: In terms of jobs, how many does the CTF create? What would happen if the private partners went their own way? Would there be job losses?
Mr. Stursberg: Currently, the CTF creates about 20,000 jobs in Canada. If the money were pulled out by the cable companies, the independent producers certainly would not be able to replace that money.
[Translation]
Senator Dawson: Mr. Stursberg, when you were the minister's ``flunkey,'' I was sitting in the other Chamber when you testified before the committee. Had I known that you were his flunkey, I would have phrased my questions differently. But 25 years later, it's too late!
But indeed, 25 years ago, when we asked questions about production, we looked at the charts and ascertained that Quebecers produced and consumed 80 per cent of their television product and, in English Canada, the situation was just about the opposite. Is that still the case?
Mr. Lafrance: Yes, it is true that Quebecers are very attached to their television. On Sunday evenings, probably 75 per cent or 80 per cent of Quebecers tune in to one of the general-interest channels. They are very attached to their television; it is not just a successful sector.
That being said, today we can see the impact of audience fragmentation, which the chairman alluded to earlier. Audiences have become fragmented as a result of the impact of the new technologies. I will give you an example that will make you smile. Do you know how many people tuned in to the program L'heure des quilles in 1964 on Radio- Canada? When the program L'heure des quilles was broadcast on Saturday afternoons, the viewing audience totalled 2.6 million. You can imagine the production costs for this program! Today, when a program attracts more than a million viewers, it becomes a television phenomenon. The television industry has changed tremendously. The fact remains, however, that Quebecers have remained extremely attached to their television. Back then, there were two channels whereas today there are many. It is true that they have remained extremely attached to their television — this is not so true in English Canada — but the same can also be said of their music and film industries.
Senator Dawson: I would like to go back to this concept of communicating vessels. We will take you at your word with respect to the equal distribution of funding versus the money that you receive from the cable sector, the public sector or advertising. Let us say that yesterday you and other private companies negotiated with Hockey Night in Canada and La soirée du hockey and that you won. You make a profit with hockey. But you are already subsidized. Regardless of whether the 20 cents comes from advertising or the cable sector, how can we not think that you are using public money to compete with the private networks?
Mr. Stursberg: As far as hockey is concerned, the key for us is that hockey will be profitable for the CBC. When we negotiated the agreement that was announced yesterday, we made it very clear that hockey broadcasts will be funded solely by advertising. So in that sense, no public money is being used to fund hockey now. That is an absolutely pivotal point for me. We find ourselves in a rather odd position. It all comes back to the fact that we are a public broadcaster.
Indeed, right now we are more like a private broadcaster given that 55 per cent of our revenues come from the private sector. We always try to emphasize the fact that some of our programs are not funded through public money whereas others, such as the documentaries, dramas, children's programming are federally funded. It is complicated, but we need to clarify the situation.
Mr. Lafrance: The program schedule for French television is much different from that of TVA and TQS. We are not banking on the same things. This year we aired 14 new dramas such as Sophie Paquin and La Galère, which are dramas that are frequently produced by young authors and there is often risk involved. We have many hours of news and public affairs per week, science programs which are simply not broadcast by TVA. We are not dependent on a Loft Story, an Occupation double or a translation of America's Got Talent. We are not in the same market and our television programming is extremely different. We are not in the same market for 90 per cent of the program schedule.
Senator Dawson: Are there any private producers that are not totally dependent on Radio-Canada? In the agreement announced yesterday with respect to Hockey Night in Canada, you explained that, for the first time, you had forecast what was going to happen with Internet programming, revenues and Internet distribution. That was a first. Could you explain, in terms of revenue and expenditures, the fact that this is, as you said, a program that is self- sufficient through independent revenue?
Mr. Lafrance: There are small production houses that produce only one or two programs. Some of them may be totally dependent on Radio-Canada. Whereas large production houses such as Zone 3 and Sphère Média produce many programs for various broadcasters.
Mr. Stursberg: It is difficult to forecast revenue for the other platforms. For this particular contract, we looked at the revenues generated by the Olympic Games in Torino. We put the Games on the Internet and also on the more mobile services. In the case of Torino, the revenue from the new platforms represented nearly 5 per cent of our gross revenue. As far as this contract is concerned, we estimated 5 per cent to begin with, but we know very well that the value of these rights will increase. Some consultants indicated that, as far as sports programming was concerned, the value of these rights would probably increase by 20 per cent to 30 per cent per year. Accordingly, we built a model indicating that we are expecting, within a seven- to eight-year time frame, that the value of these rights will account for a larger percentage of total revenue. It is difficult to say now, but it will probably be somewhere around 15 per cent.
[English]
Senator Fox: I am glad that both Mr. Lafrance and Mr. Stursberg are here with us this morning. I came into the room just as I was receiving those kudos and I would like to say that it was a function of the quality of advice you received in those days.
Maybe I missed it, Mr. Stursberg; please go over it quickly for me if I have. I want to get back to the Canadian Television Fund if I may. About 37 per cent of Canadian Television Fund money goes, to quote you, ``. . .to independent producers whose television programs are broadcast on CBC and Radio-Canada.'' Is the 37 per cent formula in the fund or is it something that varies from year to year?
Mr. Stursberg: As I mentioned earlier, the original numbers were 50 per cent and up to 50 per cent of the fund. To calculate this 37 per cent, they looked at the historical draw of the CBC against the fund, if memory serves me, across the previous four or five years. That is how they fixed the number. It was not arbitrary; it was based on who actually drew how much over the previous five years.
Senator Fox: That percentage would be subject to change, then.
Mr. Stursberg: The 37 per cent is fixed by the government and dictated to the fund. The other people within the fund each have individual envelopes of money, and the size of the envelopes of money that they have are determined in part by the historical draw and in part by how well they do in terms of attracting audiences to their programs going forward.
Their amounts of money can grow or shrink, depending on how well they do, but ours is fixed unless the government decides to expand or contract it.
[Translation]
It is based on the ratings. One of the reasons for the 37 per cent figure is that we cannot ask Radio-Canada to make distinctions and tie its funding to ratings. We would be in a bit of a different ball game then. We are one of the rare organizations to produce youth programming and documentaries, programs where we would be at a considerable disadvantage if ratings were taken into account. The 37 per cent figure recognizes the distinct nature of public television.
Senator Fox: Given that this is a stable source of funding which you can rely on year after year, it is a bit funny to say —
[English]
— that the CBC does not receive CTF money. Independent producers are recipients of this funding. However, those are all independent producers who have licences from the CBC. That is sort of playing with words. I know that you do not receive it so that you can spend it the way you want on in-house productions, but it is still CBC funding.
Mr. Stursberg: I take the distinction, but the only reason we wanted to emphasize this point is that the way in which it had been characterized by Shaw and Quebecor was that the money had somehow or other gone into the CBC and we were going to use it for in-house production, which is not true. The money actually is used by the CBC exactly as you say, namely to commission independent producers to do it.
This is part of the policy, dare I say. There was a desire on the part of the government, going back well over 20 years now, to build an independent production community in this country as being fundamental to the overall cultural architecture of the country.
When we say that it goes to the independent producers, we think it is important that people understand that the money flows through us, but it goes by way of a licence fee to the independent producers. The other important thing is that the independent producers end up owning the programs. If they want to exploit them in other ways, whether by international sales or whatever, they are at liberty to do so.
Senator Fox: I want to get into the question of independent producers, but before I do, I want to add to what you just said. The policy also allowed this country to develop a great deal of expertise in technical crews. If there are movies being shot in Canada today, it is because over a period of time, through the independent production industry, we also developed some highly skilled crews from one coast to the other.
When I was listening to Mr. Lampron last week, and I will put this question to both Mr. Lafrance and to Mr. Stursberg —
[Translation]
Mr. Lampron appeared to be challenging the entire idea of independent production by saying that the situation had indeed changed a great deal, that these were things that we would have liked to have done in our youth, et cetera, but that today, this sector of private production cannot be effective. He was therefore making a plea to go back to using these funds for in-house production. What is your position on this matter?
Mr. Lafrance: Quebecor's position stems from the fact that they have achieved a very high penetration rate in the television sector. If they were to retrieve all of the rights that independent producers do not have, they could operate on all platforms. The argument is a bit egocentric as far as that is concerned. There is, nevertheless, an extremely vital independent production sector and the sweeping dramas that we see on television are often produced by independent producers who have developed unique expertise. Quebecers are probably so attached to their television because there are numerous creators who come both from the independent production and in-house production side to make programs such as L'auberge du chien noir which was produced in house at Radio-Canada. I would challenge that there is an extremely vital independent production sector. There are independent producers that make high-calibre programming which is sold in many countries around the world. This is important.
Despite the criticism that is sometimes levelled at the Canadian Television Fund, as far as results are concerned, the fund has delivered on expectations.
[English]
Senator Fox: Do you agree, Mr. Stursberg?
Mr. Stursberg: I do. The independent production community is not only important in its own right, it is important for the reasons you adduced as well. Because there is an independent infrastructure within the country, it can attract foreign productions to come and work here. Many independent producers make their money by making Canadian shows as well as foreign shows. If they were not able to make Canadian shows, that infrastructure would wither and they would have more difficulty in attracting foreign shows.
I would also say that I do not want us to make all of our shows internally. I think that that is a recipe for sterility. What we want is to be able to select among the largest number of interesting and amusing ideas out there. I do not think you get that by having monolithic control over the productions that are made. I think you get that by having a variety of ideas and producers you can work with.
I would be opposed to the notion that the CBC would go back to where they were in the 1970s and say, ``We will make all productions in house.'' I think that would be a recipe for cultural weakness and failure.
[Translation]
Mr. Lafrance: Another important thing that the fund enables us to do is to ensure that we provide the full spectrum of programming that television has to offer in the Canadian system, such as youth programs and documentaries. And the Quebecor Fund would not be subject to that. It would be easier to apply public policy to a cultural industry like that one if each independent player had his own fund that he could manage as he saw fit. We would run the risk of moving away from the type of programming that we generally feel is very important in our Canadian television system. So as far as that point is concerned, the fund does act somewhat as a regulator, enabling us to be present in many types of programs. Funding envelopes are thus distributed accordingly.
Senator Fox: What do you think about the Quebecor solution that was presented to us last week, whereby Quebecor sought permission to opt out of the fund, despite the fact that today it receives more money from the fund then it puts in? In some aspects, this is opting out without compensation, while at the same time agreeing to meet national objectives. It would be prepared to make a commitment to put more money into Canadian production providing their productions could be integrated vertically. Second, what would the impact be in Canada if everybody thought like that?
Mr. Lafrance: That is a big part of the answer. At the outset, I see some problems in logic with the Quebecor Fund. This is not Quebecor's money, this is money that comes from cable subscribers who have access to a series of channels that meet certain criteria. Should channels subscribers be able to say: I will contribute to Canal Z? Our system does not work like that. We want to expand the programming available. That is the spirit of the act.
Consequently, I would say that Quebecor's proposal is somewhat contrary to the spirit of the act, which states that there are several players in this sector. The private sector works side by side with the public sector; independent producers must have a major role in production and in creating our television. The fund is designed that way.
A decade ago, the cable industry thought that it was a good idea to regulate everything and set up a fund. Today, cable broadcasters are saying: We have a good idea; we will opt out of the fund, keep the money and produce our own programs. How are we supposed to regulate that in a long term? I do not know. If each player were to decide to opt out of the fund and if that were to occur in the television industry, it could also happen in the music industry. Private broadcasters could say that instead of contributing to the Canadian music sector, as the CRTC obliges them to do, they would keep the money and play their own songs, and the outcome would be better. I do not know how we would manage a public policy like that. Managing a public policy means enforcing a policy that all players have to respect and giving ourselves the tools to ensure that in the long run, a public policy remains just that.
In answer to your final question, namely what impact that would have, in my opinion, this is a threat to our cultural identity in the long term because each player would do his own thing and we would be unable to manage a public policy. In the 21st century, in a country such as Canada, if we cannot manage a strong cultural identity public policy, we will have a big problem on our hands. In my opinion, here again, we are not grappling with a technological or economic issue, but rather a fundamental question of identity and cultural diversity.
[English]
Mr. Stursberg: As I understand the Quebecor position, they say, ``Let us take our money out of the fund and we will double the amount we spend.'' As Mr. Lafrance points out, it is not their money to take out. The premise of the question is bizarre.
Having said that, if they want to increase their spending on Canadian content, there is nothing to stop them from doing that. They are at liberty to do that. I am a bit lost as to what their problem is. Do they want to spend more on Canadian content? I say, God bless them; I wish they would.
Senator Fox: I was reading Mr. Rabinovitch's speech to the House of Commons committee about the CBC. Referring to the contribution rules to the CTF, he indicated that these are rules ``that the industry agreed to in return for an increase in cable rates equivalent to double their contribution to the CTF.''
That is a point you tried to make. To reiterate, it was ``in return for an increase in cable rates equivalent to double their contribution to the CTF.'' It is hard to see how they then disagree with it.
Mr. Stursberg: I am not sure if you were in the room, but we were talking about this before. I was explaining how the capital expenditure —
Senator Fox: That seemed to be a 50/50 proposition.
Mr. Stursberg: It would be doubling in the sense they got their first 50 cents, which they kept in their pocket, and now they are saying, ``Give us the other 50 cents and we will put that in our pocket.'' In that sense, it would be a doubling. Neither 50 cents belonged to the cable companies at any point. That is why there is a certain presumption in claiming any of this money is theirs.
Senator Fox: Bottom line, does this not come down to two different concepts of what the public broadcasting system should be doing in this country and what the private broadcasters should be doing?
Let me rephrase that. Essentially, in spite of the nice words that Mr. Lafrance used in saying that you were not in competition with them, they feel you are in competition with them and that the taxpayers' funds are being used to allow you to take away market share or advertising revenues. There seems to be a clear divide between what you think and what they think, and what I think Canadians think about that.
To my mind, it does not seem to be changes in the governance of the fund that will go to the essence of that problem.
It is a question of policy-makers deciding that funding will go to the CBC out of this and that the cable companies and others, in return for the extraordinary privileges they have been given by the Canadian regulators and policy- makers over the years, must make a contribution to public broadcasting in Canada. Would you agree with that?
[Translation]
Mr. Lafrance: I do agree that there are two very clear, contradictory visions: should culture be left to market forces, or should it be regulated? In this regard, I often say that the people who run the Canadian broadcasting system have shown a great deal of wisdom since the beginning of the 20th century, specifically by offering Canadians diversity, choices, by ensuring that they are involved in all types of productions and by involving both the public and private sectors to ensure this diversity. The airwaves are public property and only the airwaves imply a responsibility to invest in the system to enrich it. In this regard, the basis of our legislation is very clear, and we must ensure we comply with that.
Yes, we are talking about two contradictory world views. There is one that says we should leave this completely up to market forces and the other that says that the television industry will always need some regulations because, in a country where our population is much smaller than that of our neighbour, if we want to have a strong cultural presence, we must invest in our culture, it cannot be left up to market forces. There are many examples that prove this.
I often draw a parallel to the world of music and radio: when the CRTC introduced quota for French content originally, the other countries in the world had serious doubts about these regulations. However, 20 years later, something that did not make sense was introduced in France because they realized that our regulations had made it possible for a very strong music industry to develop. If we want to develop culture in a country like ours, this is the way we must proceed.
So, while I may be repeating myself, I would say that yes, there are two competing world views, but I think we have to go back to the very basis of the legislation and to the historic reason for the fund: This is not private money, this is the subscribers' money.
[English]
Mr. Stursberg: There is no happy solution to this problem. Let us say, for example, the CAB says: ``You are competing with us for advertising revenues.'' Let us say the CBC was out of advertising revenues and that everything was publicly financed; then the CAB would say: ``You are competing with us for audiences. If you take audiences away from us, inevitably that will diminish our advertising revenues even though you are not competing for advertising money.''
The only solution under those circumstances that could possibly make the private broadcasters happy would be for us to have no audiences. That hardly seems like a happy outcome for anyone.
[Translation]
Mr. Lafrance: When Radio-Canada's radio service enjoyed a great deal of success in the 1990s, the private sector accused us of unfair competition. And yet, we are not in the commercial market, we do not bid on any American programs, we do not do any of that in the world of radio. We are a 100 per cent public radio service. They were criticizing us for advertising our radio programs, and they were accusing us of unfair competition. I think we cannot manage public services and pretend not to exist. There is some type of competition, but once again, the spirit of the system is such that there must be some competition between the public and private sectors. That is the very spirit of the Broadcasting Act.
[English]
Senator Eyton: Thank you for being here this morning. I have an incidental question, not perhaps directly apropos. I have some trouble with your characterization that it is not the cable and satellite companies' money in the first place. Perhaps we will agree to disagree.
Under the CRTC regulations, there is a requirement that each of them pay 5 per cent of their gross revenues into a fund. An important part of that are the required monthly payments. Much of that goes to the television fund we are talking about.
Recently, the chairman of the CRTC commented that monthly payments are customary or traditional but not legally obligatory, which again suggests that it is their money and no one else's. Does the comment by the chairman worry you in any way? I recognize that you are down the path a little as a recipient.
Mr. Stursberg: The comment of the CRTC chairman was accurate. The way the regulation works is that the cable and satellite companies are obligated to pay once a year. I have spent a lot of time in the cable and satellite business. I used to run Starchoice, a satellite company. We would pay monthly, because it was easier for the fund to manage its money; the cash flows were easier to deal with.
What the chairman of the CRTC says is absolutely true. We were not required in those days — or now, for that matter — to make the payment monthly. We could pay the whole in one big lump if we wanted to, but we paid monthly to ease the process.
Senator Eyton: That helps me, if nobody else. I want to pick up on a line of questioning by Senator Fox and talk about the process. On the one hand, I have the fund with lots of money; on the other I have the independent producers and I have the CBC. They come up with programming ideas and produce them. I want to superimpose on that the policy directives given to the fund under its contribution agreement, which are quite complex.
The agreement talks about the creation of high-quality, distinctively Canadian television programming; about allocating one-third of its resources to French-language programming and two-thirds to English-language programming; about supporting the production of Aboriginal-language programming, and about supporting the production of programming produced by francophone producers based outside Quebec. It allocates 37 per cent of its resources to programs licensed by the CBC/SRC. It requires spending a minimum percentage of its revenues on the development of television programming. The agreement also talks about ensuring that the programming it supports is produced in regions across the country in an equitable manner. It supports language versioning and requires the development of a mechanism that enhances access to the fund by programs supported by educational broadcasters.
That is quite a heavy menu. If I understand the mix properly, there is the CBC on one hand, with its requirements, and there are the independent producers with their skills and resources available on the other, and then with a menu like that, I come up with three or four possible programming ideas and not more. Taken all together, it is quite constrained.
Mr. Stursberg: The point you are making is that this is a complicated series of rules. I think everyone would agree with you on that. The rules are so complicated that sometimes they defeat, in a certain sense, the fund itself.
One of the points Mr. Lafrance made earlier, with which we completely agree, is that the fund has two functions, one of which is financing television production. The other function that the fund has drifted into more and more is a quasi-regulatory function, where it spends its time negotiating the arrangements between broadcasters and producers, with a whole series of rules as to how that will work.
We think the fund has become overly complicated. We think the fund, once it is rethought, should refocus itself on something very simple, which is making great Canadian programs that Canadians would like to watch. All the other regulatory functions they should put to one side, letting the broadcasters and producers sort out their relationships themselves, and make it considerably simpler than it is now.
Senator Eyton: I want to better understand the process. The CBC is coming from a certain direction; the independent producers have certain requirements and capabilities; and then the fund has certain obligations. Where do the ideas come from and how do they get dealt with?
Mr. Stursberg: The CBC is the biggest commissioner of English Canadian documentaries, dramas, comedies, et cetera. We tell the producers that the sort of thing we are looking for, for example, is a family show at seven o'clock on Sunday evenings. A number of producers will come to us and give us ideas as to what the show might be. We will take, say, three or four ideas into development, by which I mean that we will give them enough money to be able to write some scripts and see how it goes. Out of the three or four ideas that we get, we will typically choose one, make a pilot of that and see how that goes.
We will finance the pilot in conjunction with the money from the fund. Then we will test the pilot and see what people think of it and how the actors and the stories are working. If it works out well, we will commission the series.
That is how it is. There is a kind of competitive process in which different producers give us their pitch on different ideas, but on the basis of what it is we have defined in general terms as to what we would like.
Senator Eyton: When does the fund first appear on the scene and give some sort of blessing?
Mr. Stursberg: The fund gives very little blessing any more, because they have moved off. In the old days the fund was involved in every single decision, but now there is a new structure, the so-called envelope structure. All of the broadcasters are enveloped. Whether it is money for development or money for production, we decide that and then we advise the fund as to what we have done. So long as we have done that within the context of the fund's general guidelines, everyone is fine.
Senator Eyton: Have you ever run into any of the criteria I have just pointed out?
Mr. Stursberg: Yes, we have; we do. The fund, as you say, is split two-thirds English and one-third French; so we know, for instance, how much money there is for English-language programming. Then it is only for certain categories of programming, such as documentaries, children's programming, a variety of performing arts, and drama and comedy. That is all we can do with it, so we say yes. They would like, for example, that production take place in places other than Toronto, with which we are fine. There are certain guidelines with respect to development versus production, with which we are fine, and then off we go.
That is not so much where the complexity arises. The complexity arises much more in the relationship between negotiating deals as between producers and broadcasters. The chairman's first question about digital rights issues is a perfect example. The fund has inserted itself in this set of negotiations in a way that we have found unhelpful; in the end we found it was unhelpful to the evolution of the industry in Canada. With respect to that kind of thing we say the fund does not have a lot of business in that. We think they should just focus on television production and how that will work.
Senator Eyton: Even in the face of other new media, such as video-on-demand and the like?
Mr. Stursberg: Yes, exactly. We think there are lots of ways to work with the producers so that we will be able to do Internet television offers or mobile television offers on cell phones, or mobile hand-held devices, whatever they are, in a way that both benefits the producers and us and ensures that we can use television to promote those new media.
One thing is for sure: What we do not want to do in this country is fall behind with respect to the exploitation of those new platforms. Right now we find ourselves in a difficult circumstance. The majority of the most important new platforms, whether it is YouTube, MySpace or whatever it happens to be, are not resident in Canada. They are resident in the United States. Most of the new platforms are there.
We already find ourselves in a tricky circumstance, unlike broadcasting where at least the broadcasters are owned and resident in Canada. The difficulty of staying abreast of it and maintaining both our cultural and industrial competitiveness in the area is rendered more problematic by virtue of the location of many of these things. Any impediment that we put in our way to maintaining our cultural and industrial presence in these areas redounds to our disadvantage and will make it difficult for us to be competitive in the future.
Senator Adams: We began with the CBC in the Arctic; it was our first station with the Anik satellite which was put up around 1970. That was the first time we saw television up in the Arctic. At that time we had a little difficulty with the broadcasting from Vancouver, B.C. Usually a movie would come on at one o'clock in the morning and the kids would not go to school the next morning because they would stay up until four o'clock in the morning watching television.
My mother lived in Churchill, where the CBC would broadcast up to Rankin Inlet. If you ever go to the CBC headquarters in Montreal, my mother is in a picture there.
Nowadays I can watch our question period from our legislature in Iqaluit in Inuktitut. In fact the night before last it was in Inuktitut and last night it was in English. We can watch the national news and everything.
Today in Nunavut we have a program called Window on the North. It is in both English and Inuktitut and is a very good program. Every night at six o'clock we have the national news in Nunavut, the Northwest Territories and the Yukon. At CBC Radio we have broadcasting in Inuktitut and musical programs that record Inuktitut songs.
With that preamble this is my question: If the CBC privatizes, what will happen to those programs?
Some would say that the CBC uses too much tax money, but I have never seen private broadcasting companies in television using any of the Aboriginal people for their broadcasting. I think if we lose the CBC, we will lose our culture up North.
Mr. Stursberg: In the northern service we do a daily television program in Inuktitut and, as you were saying, we also broadcast the question period from the legislature in Inuktitut. We also broadcast, but on radio, in seven — if memory serves I think it is seven — seven other Aboriginal languages. We broadcast in Dene, Cree, Gwich'in and Dogrib.
It is interesting, and this is a small aside, that when I was in Yellowknife a while back I realized that many of these languages are not written languages. In fact, the entire historical archive of the people themselves is the CBC archives. It is the whole history of the people and what has been going on.
The Northwest Territories asked us to deposit the entire CBC archive of the Northwest Territories for precisely this reason, because the history of all these people was the CBC archives, which they did and then they sent us back copies of all the tapes and recordings. We have had a very profound commitment to these things. However, as you say, I know for sure that none of this could be financed on a private basis.
Senator Zimmer: I am a strong believer in CBC and the public service it provides. What annoys me is that on a Saturday night, when I am trying to watch a good program, some of the channels put on four and one-half hours of The Simpsons. I hope you do not do that. Nothing is more annoying than that. I want to see something about my country, a documentary or something that expands my knowledge of the world.
I want to clarify one point in the area of new media. Shaw and Vidéotron claim that there is recent growth in new media, and they believe that some of that CTF funding should go to new media. Can you expand further on that? How would it affect your network if some of the CTF money went to new media?
Mr. Stursberg: I used to be the chairman of the board of the CTF, but that was a while ago. If I am not mistaken, however, if you want to build a new media component into a television program, then that can be already accommodated within the existing CTF rules.
I will give you an example. The most famous example would be Degrassi High, a show that started on CBC and is now on CTV. It is about children in high school. The producers wanted to build an opportunity on the Internet for people to sign up at the school, to get a student number, and to have a locker, and then to be able to attend class. There would be two streams of storytelling: One that would run through the television shows; the other that would run on the Internet. There would be secrets, gossip, and this and that. The two streams would be integrated but different.
That was fine and both pieces were financed by the Canadian Television Fund. We would agree with everyone else that it is very important for us to rethink our financing model to make sure that these more advanced platform pieces can be taken into account when we finance things. If we do not do that, as I was saying earlier, I am very concerned that we will fall behind. That would be bad for us culturally. I think these things will be more and more important for us industrially, as well. There are potentially very valuable opportunities here.
Mr. Lafrance: If I may add something, there is incredible pressure for financing in television because of the fragmentation, and so on. Should they use the money from the television subscriber to finance the new media system or should we find another way to do it? That is a good question. If you add pressure on the financing problem of the television industry, in the long run you will continuously diminish the quality of what you do and you will then be less competitive with the U.S, or with France in our case. There is a danger there.
We should take another look at the new media financing and at the Canadian content on new media, which is a very complicated question also.
Senator Zimmer: Thank you for that information.
The Chairman: Senator Eyton wanted to ask another question.
Senator Eyton: It is a supplementary. There are various commentators looking at new media and at developments generally. There is a school of thought that suggests that traditional television is dead; it is still with us, but it will be a diminishing force and influence in our lives and in 20 or 25 years from now it will be gone. Can you comment on that?
Mr. Stursberg: I do not know what will happen in 25 years, but the amount of consumption of television has actually increased over the course of the last few years. We are also seeing a parallel, but faster, increase in the use of the Internet. It also seems to be age-skewed, in the sense that obviously the younger you are the more likely you are to consume content on the Internet than you are on conventional television.
It is an interesting question. People have predicted the demise of many things as media have changed; for example, it was suggested that radio was dead. Well, radio never died; it just changed. Newspapers are not dead; they will be changing. Is television dead? Probably not. Will it change? For sure. I think absolutely that new media will increase in terms of their importance and centrality in our lives. Will that kill television? No, but will it change? Absolutely.
Mr. Lafrance: In 1950, there was a royal commission in Canada about communication and newspapers. The Association of Newspaper Editors was there to launch a warning because there was a new technology in the U.S. that would kill Canadian newspapers before 1960. It was called the fax. There was then the statement that you would receive your newspaper by phone and the industry would collapse because everyone would get their newspaper by phone by 1960. It is always interesting to look at the development of media.
I will give you this advice: Do not throw out your television set right now. Wait a few weeks.
Senator Tkachuk: We all remember that television was supposed to kill the movies, too.
[Translation]
The Chairman: I would like to thank Mr. Lafrance and Mr. Stursberg for their testimony. We appreciated their appearance before the committee. I think their contribution will help us prepare our report, which we will be presenting soon.
[English]
We are adjourning the meeting until tomorrow. We will then have Mr. Ken Stein from Shaw Communications with us.
The committee adjourned.