Proceedings of the Standing Senate Committee on
National Finance
Issue 30 - Evidence - May 6, 2015
OTTAWA, Wednesday, May 6, 2015.
The Standing Senate Committee on National Finance met this day at 6:45 p.m. to continue its study of the Main Estimates for the fiscal year ending March 31, 2016.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this evening, we are continuing our study of the Main Estimates for 2015-16.
[English]
This evening, we are pleased to welcome officials from three different organizations. From the National Film Board of Canada, we welcome Claude Joli-Coeur, Government Film Commissioner and Chairperson of the National Film Board of Canada, Commissioner's Office. He is accompanied by Marina Darveau, Director, Finances.
From the Canadian Radio-television and Telecommunications Commission, we welcome John Traversy, Secretary General; and Jim Stefanik, Director General of Finance.
From the Department of Canadian Heritage, we welcome Patrick Borbey, Associate Deputy Minister; and Andrew Francis, Chief Financial Officer.
Welcome. I understand each organization has a brief opening comment, and we're interested in knowing roughly the type of work you're involved in, your sources of revenue and just how you're going to spend it. That's our committee's mandate. Perhaps we could have comments in the order in which I introduced you.
[Translation]
Claude Joli-Coeur, Government Film Commissioner and Chairperson of the National Film Board of Canada, Office of the Commissioner, National Film Board of Canada: Each year, the NFB produces approximately 75 films and works through 10 production studios located across the country. We are widely recognized for leadership in the production of documentary, animation and interactive works. Since the NFB's creation in 1939, its films have received more than 5,000 awards and prizes. Our online Screening Room, NFB.ca, has recorded more than 30 million views since it was created in 2009, including 11 million views through our CAMPUS platform, which is dedicated to the education sector. Our collection consists of more than 13,000 titles, 500,000 still images and a substantial audio library.
The NFB's operating budget for the 2015-16 fiscal year is $66 million. About 7 per cent of this budget is funded by our commercial activities, which will generate approximately $4.2 million in 2015-16. Our appropriations for this year stand at $59.6 million.
Audiovisual production is our core business and accounts for almost two thirds of the actual expenditures of the NFB, or $38 million. The approximate breakdown of the audiovisual production budget is 60 per cent for English programming and 40 per cent for French programming.
Distribution, marketing and activities in the educational and institutional sectors represent our second centre of activity, with planned actual expenditures of $13.7 million. Note also that the NFB has slated $1.5 million for the conservation and preservation of its collection.
Finally, our third major cost centre is internal services, with a budget of $7.8 million.
[English]
Since 2009-10, the NFB's budget has decreased by almost 15 per cent in current dollars. The bulk of this decline, more than 10 per cent, was the result of savings measures announced in the 2012 federal budget.
The digital revolution has profoundly redefined the audiovisual industry, especially the documentary industry. Like all players in the industry, the NFB has been greatly impacted by the digital shift. The existing business models are affected by the emergence of new distribution platforms. Traditional sources of income, such as television broadcasting, have declined. The NFB operating revenues fell by more than half over the last decade and by 38 per cent over the last five years.
Despite the revenue reductions, the NFB has invested since 2009 more than $15 million to upgrade its infrastructure to meet the digital exploitation needs. Many efforts have been made to improve efficiency at all levels of the organization. The number of NFB staff has been reduced by 16 per cent since 2009 and now totals 373 employees.
A new action plan is being implemented to ensure financial stability for the next five years. The plan aims to protect audiovisual production budgets and to implement a new marketing and distribution strategy for NFB.
The entire organization contributed to balancing the budget and ensuring funds will exist for future costs associated with the relocation of many of our offices, including our headquarters.
[Translation]
Before I conclude, it is important that I present the financial impact of the upcoming move of NFB headquarters to a brand-new building being constructed by the City of Montreal in the Quartier des spectacles district, scheduled to take place in 2017-18. Funding of $14.4 million was granted to the NFB by the Treasury Board for the relocation of our head office. This is a loan without interest, repayable over 12 years.
The move will mark the beginning of a federal presence in the district of downtown Montreal that is dedicated to the arts, in which the government has invested $40 million. These new facilities are part of our commitment to creating a global centre of innovation and excellence in emerging forms of expression.
Thank you. We would be happy to answer any questions that you have.
[English]
John Traversy, Secretary General, Canadian Radio-television and Telecommunications Commission: We are pleased to have this opportunity to appear before you to discuss the CRTC's Main Estimates for 2015-16. The CRTC is an administrative tribunal that works to ensure Canadians have access to a world-class communications system.
The CRTC regulates and supervises Canadian broadcasting and telecommunications in the public interest. In addition, the CRTC enhances the privacy of Canadians by enforcing the unsolicited telecommunication rules and certain sections of Canada's anti-spam legislation.
The work is carried out under four programs: Canadian content creation, connection to the communication system, protection within the communication system, and internal services. We commonly refer to these as three pillars, create, connect and protect, which are supported by a commitment to management excellence. Details regarding the financial and human resources that will be allocated to these programs, along with the CRTC's organizational priorities, are noted in our Report on Plans and Priorities for 2015-16.
The CRTC's overall operating budget for 2015-16 is $59.9 million. Of this amount, $47.6 million is vote netted and funded by the CRTC fee payers, broadcasting licensees and telecommunications service providers as well as telemarketers that subscribe to the National Do Not Call List.
The remaining $12.3 million is the amount reflected in Part II of the Main Estimates. Of this amount, $5.4 million requires parliamentary approval, while $6.9 million is a statutory vote pertaining to employee benefit plans.
Compared to the Main Estimates for 2014-15, our budget has increased by $1.7 million. This increase is attributable to a number of factors, which are outlined in the CRTC's highlights section in Part II of the estimates. They include the additional funding we received to implement the new Voter Contact Registry.
As a responsible and transparent public organization, the CRTC is mindful of the need for strong financial stewardship. No matter the source of funds we receive, we commit ourselves to using them responsibly. Canadians expect and deserve nothing less.
As such, management excellence is one of the pillars of our organization. Rigorous internal processes have been established, and financial planning is integrated into the CRTC's overall planning cycling. These efforts are reflected in our annual three-year plan, which was updated last week for the years 2015 to 2028.
Soon after his appointment in 2012, our chairman and CEO, Jean-Pierre Blais, made a commitment to reduce the CRTC's operating costs by 5 per cent over a period of three years. These savings have since been achieved and returned to our fee payers: the broadcasting and telecommunications companies we regulate.
I want to highlight one example of our commitment to sound financial stewardship. Between 2012 and 2014, we realized reductions of nearly 50 per cent in our expenses for travel, hospitality and conferences.
Our cost-containment initiatives have not in any way impeded our ability to deliver on our core mandate. In fact, last year the CRTC held an unprecedented number of public proceedings that will redefine Canada's communication system for years to come.
In closing, the CRTC is a prudent administrator of public funds. We invest our resources where it is important for Canadians and to achieve our core mandate.
[Translation]
We would now be happy to answer your questions about our Main Estimates for 2015-16.
[English]
Patrick Borbey, Associate Deputy Minister, Department of Canadian Heritage: Thank you, Mr. Chair. I am pleased to be here today with our chief financial officer, Andrew Francis.
[Translation]
The Department of Canadian Heritage, and Canada's major national cultural institutions, play a vital role in the lives of Canadians. We promote an environment in which all Canadians can take full advantage of dynamic sport and cultural experiences, celebrate their history and heritage, and benefit from our linguistic duality.
[English]
I am pleased to see that in Economic Action Plan 2015, tabled on April 21, there was good news for our department.
For example, through a new program announced in the action plan and launched two weeks ago by my minister, we will invest in activities to support the one hundred and fiftieth anniversary of Canada's Confederation.
The Canada 150 Fund starting in 2015-16 will have at its disposal $210 million to support gatherings and celebrations across Canada.
Also during this Year of Sport in Canada, we are happy to see that the action plan includes up to $20 million over four years, beginning in 2016-17, to support the next generation of Canadian Olympic and Paralympic athletes.
[Translation]
As some of you may know, in recent years, the department has modernized how we deliver our programs and services by streamlining processes and taking advantage of technology. And to help support creative projects, we have set up a small permanent innovation fund to promote a culture of innovation amongst our employees in the context of Blueprint 2020.
[English]
I believe these kinds of initiatives make the department a more productive and collaborative workplace.
Let me give you some highlights on the Main Estimates for the Department of Canadian Heritage.
For the 2015-16 fiscal year the department's budget is $1.25 billion. This sum includes $173.7 million in operating expenses, $1.06 billion in grants and contributions, plus $24.7 million in statutory authorities.
[Translation]
Thus, more than a billion dollars of our budget goes directly to grant or contribution programs that allow us to promote Canadian values and identity, while stimulating sport and cultural life in this country. And we do this through arts, heritage, official languages and Aboriginal programs, among others.
[English]
I would like to point out that this year's Main Estimates represent a reduction of $135.4 million from last year. This is mainly due to the fact that we have contributed most of the $500 million commitment to the Toronto 2015 Pan Am and Parapan Am Games.
I would also like to add that we have allocated $16 million to various commemorative projects to celebrate Canada's history and heritage on the road to the one hundred and fiftieth anniversary of Confederation in 2017. I feel privileged to be part of the department that will lead on this high-priority initiative for the government.
Also in the 2015-16 Main Estimates, the portfolio organizations, separately from Canadian Heritage, are receiving $1.8 billion in appropriations. In addition to these appropriations the portfolio organizations generate revenues totalling $671 million. This brings total resources available in 2015-16 to $2.5 billion.
[Translation]
Representatives of some of these organizations are appearing before your committee with us today, and others are scheduled to appear soon. I trust they will give you more details about their own estimates.
This concludes my presentation. I would now be pleased to respond to any questions you may have.
[English]
The Chair: Could you clarify the amount for Canada 150? You talk about the $210 million, and the minister made the announcement, but that doesn't start until next fiscal year.
Then you also talk about $16 million on various projects, including 150.
Mr. Borbey: There are two different envelopes. One envelope of $16 million is in the Main Estimates, and that is for activities that are leading up to celebrations in 2017. We have various commemorative activities related to the Fathers of Confederation and to the anniversaries of different events during the First and Second World War. We have the one hundredth anniversary of Hockey Canada and the fiftieth anniversary of the Canadian flag.
[Translation]
We also have the anniversary of the birth of Sir Wilfrid Laurier. A number of those types of activities will take place over the next two to three years, in the lead-up to the celebration in 2017.
[English]
The budget of $210 million for the activities for the celebrations of 2017 is in the economic action plan and is not yet in the Main Estimates. It will eventually find its way in through the supplementary estimates process.
There is an amount of that $210 million that will start flowing this year to help groups that will apply for the various funding allocations to start planning their activities now, because some investments will need to start being made well ahead of the celebrations of 2017.
The Chair: We're anticipating Supplementary Estimates (A) any time now, so we'll be looking for you.
Senator Eaton: Mr. Joli-Coeur, to quote you: "Audiovisual production is our core business." You make passing reference to this, but could you tell us what you're doing to rethink how you present your most wonderful documentaries to the generation that watches a computer, looks at YouTube and walks around with their iPhone? Can I get a National Film Board documentary film on my iPhone?
Mr. Joli-Coeur: Yes, absolutely. We have apps that are available for free, so you just have to download the app from the Apple Store and you will get 3,000 films of the NFB free of charge on your iPhone, tablet, Android — any device. We have apps in all the different systems to make our films available, and we regularly add new films to our entire collection.
Senator Eaton: Does having that app give you any income?
Mr. Joli-Coeur: No. Most of our films are freely accessible to Canadians. We just launched last week or two weeks ago a pay part of our site where you can rent a film for a 48-hour period, but it's very limited in terms of revenues.
Our films are accessible, free, for all Canadians.
Senator Eaton: I didn't find anything in your budget. You have 13,000 titles and 500,000 still images. How good is your storage? How fireproof is it?
Mr. Joli-Coeur: It's key to our operations. We have a vault in Montreal that is three floors of eight, and it's under rigorous climate-control conditions. It's totally hazard-proof. We have a duplicative feature element that is in another location, so whatever disaster might happen in one or the other storage location, we'll always be able to recreate a film from our collection.
We have a digitization plan that will have everything digitized for 2017.
Senator Eaton: Thank you. I will look for your app.
Mr. Francis, some of us sat last year for the new Canadian Museum of History, and how is that coming? Is that on budget and on time?
Andrew Francis, Chief Financial Officer, Department of Canadian Heritage: In terms of the museum switchover, the Department of Canadian Heritage had a transfer in the estimates to the Canadian museum for the virtual museum, and things, to the best of my knowledge, have gone just fine. When we were doing the transfer, everything was quite smooth.
Senator Eaton: So you're hands-off now; it is its own separate corporation?
Mr. Francis: It falls under the Museum of History, which is its own organization, autonomous from the department, in terms of its still being part of the Heritage portfolio but independent from the department itself.
The Chair: Honourable senators will be interested in knowing that we have the Museum of History with us next week. You can prepare your questions.
[Translation]
Senator Chaput: My first question is for Mr. Traversy, from the CRTC. In your 2015-16 Report on Plans and Priorities, you talk about consultations with Canadians to better understand their needs.
When were those consultations held and how did you consult? Did you hold public meetings, online or in person? Can you tell us about the needs that were identified as a result of those consultations?
[English]
Mr. Traversy: Just to start, a big part of the CRTC's process is to try to get as much input from Canadians as possible. It's really the only way to gather all the information we need to make well-informed and evidence-based decisions.
I think the process you're talking about is a large one we did last year — what we called the Let's Talk TV proposal.
Senator Chaput: That's the one.
Mr. Traversy: We did a multi-stage process there where we started out with a fact-finding gathering online, where we had Canadians come and tell us what they think. They could do it online, through email or provide submissions to tell us what they think the television system should look like going forward, to give us an indication of how they are viewing television, how they access programming. We know times are changing, and we wanted to get an indication of just how that took place.
We followed that up with a further process, which was the first time we did this. We thought it was innovative. We called it a "choice book." We gathered the information together and put different potential policy approaches to Canadians based on the facts that they provided to us, and we provided some potential outcomes and asked them what they thought about these potential outcomes.
That was followed up, then, with a working draft policy document — a straw man, so to speak — before we went into a public hearing process that took two weeks, where we allowed as many participants from across Canada as possible to participate. During this process, they were still able to comment online as to what they felt about what other people were thinking, or if they had other ideas.
It was quite an all-inclusive consultation process that we used.
We came up with another one early on that we called "flash conferences." We would fund them if necessary, but we had grassroots organizations across the country that got together and had a debate amongst themselves and provided a report to the CRTC that we took into consideration in the deliberations for the policy.
[Translation]
Senator Chaput: I commend you, because you truly consulted with Canadians.
Mr. Traversy: Thank you.
Senator Chaput: Now could you tell us which needs, or priorities, emerged from those consultations? What mattered most to Canadians?
[English]
Mr. Traversy: A lot came out that they were looking for more choice in how they determine what programs they wanted to get from the program distributors. So that was the pick-and-pay part of it. It came out clear that Canadians were looking for a little bit more choice in determining what programs they wanted for their particular circumstances, and the way they liked to view programs. Instead of being offered large packages of programming from distributors, they were looking for a little bit more choice.
That is one example, but there were many others that came out of it, also.
[Translation]
Senator Chaput: Have you incorporated the input you gathered during your consultations into your strategic plan?
[English]
Mr. Traversy: Policy decisions already have been made on that, so there were a few different policy decisions that came out of the Let's Talk TV process. That started in November 2014, and we had three other decisions, January through March, early in 2015. Policy processes have been set up, and we'll be following up through most of this current fiscal year to implement a lot of those policies in an efficient manner.
[Translation]
Senator Chaput: My second question is for Mr. Joli-Cœur. NFB headquarters will be moving. Where are you currently located?
Mr. Joli-Coeur: In Montreal.
Senator Chaput: And you'll be moving where?
Mr. Joli-Coeur: Downtown Montreal.
Senator Chaput: Do you lease or own the building you're currently in?
Mr. Joli-Coeur: We've been in that building since 1957; it's a government-owned building that we lease through Public Works and Government Services Canada. We are tenants.
Senator Chaput: Will you be tenants in the new building, as well?
Mr. Joli-Coeur: Yes, we will be tenants. A real property agency of the City of Montreal is constructing the building, and Public Works, our landlord, reached an agreement with the city to lease the space for 20 years.
Senator Chaput: So the government will not own the building. A private company will?
Mr. Joli-Coeur: No. The building will belong to the city of Montreal through the Société d'habitation et de développement de Montréal.
Senator Chaput: Your role has clearly changed a lot over the past few years. You had projects that brought in revenue but that no longer do given how much the landscape has changed. Is that one of the reasons you're moving? Does it have to do with the fact that you're no longer in a creative centre?
Mr. Joli-Coeur: There are a lot of reasons for the move. The government would have to make a major investment in order to bring the building we are in now up to standard. We'll be moving to a brand-new building that won't require that kind of investment.
It will be located in the heart of Montreal's Quartier des spectacles district, a creative hub. Right now, we're next to a highway, in an industrial area that isn't easy to get to for the people we work with. The new location will facilitate synergies, and what's really meaningful is that the federal government will have a major presence in the heart of Montreal's cultural district, it's only significant footprint in the area. The NFB is a strong Canadian symbol.
Senator Chaput: What kind of advertising do you do, Mr. Joli-Coeur? I've always thought, and still do, that people aren't as familiar with the NFB as they should be. It's doing some incredible work.
Mr. Joli-Coeur: That's something I hear a lot, and I'm always finding that our audiovisual works could be more popular with people.
Senator Chaput: Do you spend any money to that end? Do you have an advertising budget?
Mr. Joli-Coeur: Yes, we do, but it isn't very big. We do a lot of advertising online and through media relations and events. We try to be as synergistic as possible with the limited resources at our disposal. We have to work within legislative constraints; we aren't allowed to do much advertising, and what we do do has to focus on our films. So we have to operate within somewhat restricted parameters.
Nevertheless, nearly 30 million Canadians will have seen our films this year, whether on TV, online or as part of public screenings. So that's still not too bad in terms of audience size.
Senator Chaput: You have a smaller staff than you used to. You used to have people out in the regions. Do you still have staff in certain regions, or is your entire workforce centralized at the Montreal headquarters?
Mr. Joli-Coeur: There's no denying that a large chunk of our workforce is located in Montreal, because that's where our main office is, but we also have regional production centres in St. John's, Halifax, Moncton, Toronto, Winnipeg, Regina, Edmonton and Vancouver. So we do make sure that we have a presence throughout the country, which is essential for us. During the next five years of our mandate, one of my priorities will be to solidify our presence among all Canadian creators and audiences, and our regional offices will be the ones making that happen.
Senator Chaput: Do those production centres have physical locations? Do they have staff?
Mr. Joli-Coeur: Yes. In every one of those centres, we have producers and employees who work to ensure our films are accessible to Canadians and marketed throughout the country.
Senator Chaput: Do I have time to ask the Department of Canadian Heritage officials another question?
The Chair: A quick one.
Senator Chaput: According to the department's Main Estimates for 2015-16, the government advertising budget will go up by $7.2 million in order to implement the Canada 150 campaign.
What's the total? It will increase, but how much money have you allocated to date? What is the total amount that will be spent on the campaign?
Mr. Borbey: Last year, we received $7.2 million as well. I think that was in the first set of supplementary estimates. Then we received a small increase of $1.5 million to buy more advertising for the Fathers of Confederation campaign. The advertising involved the media, social media and small vignettes that were distributed to schools. So the additional $1.5 million enabled us to complete the campaign and begin planning for the next one.
The $7.2 million in the main estimates is for the campaign that will get under way when the fiscal year begins. We are in the midst of working out the theme for the campaign and we've begun the planning.
Mr. Francis: In 2013-14, an amount of $500,000 was allocated for the first stages of production. In all, then, it covers three fiscal years: the $500,000, the $8.7 million last year and the $7.2 million in this year's main estimates.
Senator Chaput: What's the total, then? About $14 million, $15 million or $16 million?
Mr. Francis: It's $16.4 million.
Senator L. Smith: Mr. Joli-Coeur, I have a more general question. In terms of your mandate and purpose, where do you see the NFB heading? What direction are you taking to serve the NFB's purpose?
Mr. Joli-Coeur: The National Film Board's purpose hasn't changed since it was established in 1939: to interpret Canada to Canadians and to other nations.
Every one of our films illustrates a point of view or an issue of Canadian interest, representing the country and the way people live, as well as the problems they face. That is really the lens through which we carry out our mandate.
Senator L. Smith: What's your biggest challenge around technology, change and so forth? And how do you adapt your activities accordingly?
Mr. Joli-Coeur: That's another interesting element. Since 1939, the NFB has always been at the forefront of innovation. With every decade, the NFB has found new ways to be creative, coming up with new techniques and equipment. And it continues to do that. The NFB is regularly honoured for its innovation. Being a pioneer is one of the NFB's fortes.
Nowadays, it's no big deal to watch a movie on the Internet, but back in 2009, we were hugely innovative with the introduction of our online Screening Room, NFB.ca, the first bilingual streaming Web site in the world. That was before the days of Netflix and all the other platforms. We've always been pioneers when it comes to making our films accessible to Canadians and people around the world.
Senator L. Smith: What frustrates you most in fulfilling your role?
Mr. Joli-Coeur: I wouldn't call it a frustration but, rather, a perpetual challenge. For me, it's constantly having to push the creative envelope and rethinking how we serve and reach Canadians. As Senator Eaton put it, it's a matter of rethinking how we present our films and reach audiences. That's really where my focus lies when it comes to reaching Canadians in every part of the country.
[English]
Senator L. Smith: In your presentation, you said, "A new action plan is being implemented to ensure financial stability for the next five years."
[Translation]
What does that mean exactly?
Mr. Joli-Coeur: I was appointed in December, but I've been at the NFB for some 12 years, and every single year, I've witnessed the organization's ability to transform and adapt through efficiency and cost savings. That has put considerable pressure on our teams. This year, I saw to it that our budget earmarked adequate levels of funding to give us the stability we need to be creative over the next five years. It establishes a predictable environment in which to operate, so that we can fulfil our mandate as calmly and as easily as possible.
[English]
Senator L. Smith: Mr. Traversy, looking at the presentation, the CRTC overall budget of $59.9 million and revenue of $47.6 million, could you walk us through how you construct your revenue base?
Mr. Traversy: The CRTC has a very interesting and, I think, different revenue base than most organizations in government, actually. Most of our funds come from the industries we actually regulate. So we charge the broadcasting industry — the licensee holders and the broadcasting — a proportional amount to fulfill not only the CRTC's costs in broadcasting but also some costs of other departments also, and we do the same thing with the telecommunications providers. We call it vote netting, and it's re-spendable revenue that we get. We bill them at the start of the year for the amount of the full-up costs that we are going to expend on telecommunications programs within the CRTC.
Just a couple of years ago, it was expanded. It was good news for us. We were having trouble, with the National Do Not Call List, getting the resources we needed in-house to actually get it up and running and to make sure that we had the people in place to do the compliance work and to follow through with enforcement. We were able to come up with a scheme through Treasury Board, where we actually charge the telemarketers now. Every month — or they can buy a yearly subscription — they're supposed to update their list through the National Do Not Call List operator, and, when they do that, a percentage of their fee gets forwarded to the CRTC to fund our costs to do our telemarketing work. The only two programs we have right now that are funded through appropriation are our anti-spam program, which we call the castle, and there is a new program at the CRTC that just started in the last year. We are in the election business now, with the Voter Contact Registry, and those two programs are funded through appropriations, as is the employee benefits plan.
Senator L. Smith: Could you just give us a little description of what the Voter Contact Registry is?
Mr. Traversy: We're just developing it now. It's a very new program. The Voter Contact Registry will require all entities that want to contact voters — candidates, political parties, organizations — during an election period, from the time the writ is dropped until the end of the election, to register with the CRTC. If they contact voters using a calling service provider, or a telemarketer, the telemarketer has to register also. If organizations use what we call ADADs, or automatic dialing devices, the robocalls, they all have to register with the CRTC. If certain organizations, political parties and individuals are just calling with their own internal services and not using robocalls, there are exceptions there. They are not required to register. We have to publish everyone that is registered within 30 days after the election, and, of course, we will use this information as a potential means to follow up and do enforcement work to determine whether people were offside. Did they register or not?
Senator L. Smith: Do you foresee a time when your revenues will match your expenditures?
Jim Stefanik, Director General of Finance, Canadian Radio-television and Telecommunications Commission: Just to elaborate on Mr. Traversy's response, I would like to give you a sense of the total fees collected by the CRTC. In 2014- 15, the commission collected approximately $166.6 million, which is in excess of our operating budget. The fees that we do collect and that go toward our vote netting are Part I broadcasting licence fees. Last year, they were in the magnitude of $29.2 million. For our telecommunications fees, last year we collected just over $27 million, and the unsolicited telecommunications fees that we collect from telemarketers amounted to $3.1 million. On our pure regulatory costs that we recovered, both for our activities and for departments that incurred cost on behalf the CRTC, for example where Public Works would lease a building or a regional office for us, we recover those costs as well. We do not have the right to vote net that. Those funds that we collect on behalf of other government departments are credited directly to the Consolidated Revenue Fund as non-re-spendable, non-tax revenues.
In addition, for the Broadcasting Licence Fee Regulations, we have what's called the Part II licence fees. These are basically a right and privilege. They recover a portion of the substantial investment that the Canadian government makes in the broadcast industry, and last year we collected $107.3 million.
Senator L. Smith: It's a complex configuration of ins and outs and who gets what.
Mr. Stefanik: It certainly is, and, as Mr. Traversy said, the way our regulatory fees work, we bill the broadcasting and telecommunications companies at the beginning of the year, based on our estimated costs that are in the estimates documents. At end of year, we actually do something called a "true-up mechanism," whereby we adjust the amounts that we had initially billed to the actual cost incurred.
For example, in the broadcasting activity, if we had initially billed $30 million and we spent $29.5 million, we would refund $500,000 back to the broadcasters in the subsequent year. This ensures that we only collect revenues that are attributable to the costs that we incur.
Senator L. Smith: Thank you very much.
The Chair: I will have to read the transcript on this to be able to follow it.
The approximate amount, in rough figures, that you require voted appropriation for is somewhere around $12 million?
Mr. Stefanik: That's correct, of which $6.9 million is our statutory vote.
The Chair: And that usually goes to salaries and —
Mr. Stefanik: The statutory vote covers the employee benefits plan, and that covers the pension. It covers Employment Insurance. It covers CPP contributions — as I say, items that are statutory in nature.
Our voted amount, as Mr. Traversy said, is for our enforcing our anti-spam legislation, as well as for the Voter Contact Registry.
The Chair: The total amount that you bring in in revenue each year is how much from various sources?
Mr. Stefanik: The total amount last year was $166.6 million.
The Chair: You mentioned the figure and I wrote down $160 million. Okay, $166 million. Wow, good for you.
[Translation]
Senator Bellemare: I have questions for each of you. I'll start with the Department of Canadian Heritage.
I'd like you to talk a little bit about the funding for TV5MONDE. I see here that TV5MONDE contributions have dropped since 2013, going from $5.2 million to $2.9 million, or $3 million.
TV5MONDE grants, however, have stayed the same. As I understand grants and contributions, grants are votes you allocate to TV5MONDE without any real involvement on its part. However, specific outcomes are attached to contributions.
Could you briefly explain how the grants for TV5MONDE work?
Mr. Borbey: I'm not very familiar with the details surrounding TV5. Clearly, we contribute to the network, as do the other French-speaking countries, and those contributions are negotiated.
Senator Bellemare: Why did it decrease?
Mr. Borbey: I don't have that information with me, but I could follow up with an answer in writing.
Senator Bellemare: Very well.
Mr. Francis: I can't add anything, since the change is from 2013-14.
Senator Bellemare: The change isn't from this year. Does it have any impact on Canada's access to and involvement in TV5?
Mr. Borbey: No, not at all.
Senator Bellemare: Does the CRTC play a significant role in ensuring that households across the country have access to high-speed Internet?
[English]
Mr. Traversy: It's certainly a goal of ours, as it is across the government, to ensure that Canadians across the country can participate in democratic society, can participate in the digital economy by having access to high-speed or broadband services from Internet service providers.
Last year, in fact, we undertook a large public hearing. It was a very detailed hearing on the wholesale components of the incumbents' networks to try to spur innovation and competition within the delivery of Internet. If you looked through our plans for 2015-16, you would notice we have a proceeding that has already started and will culminate in a public hearing next April that's looking at basic telecommunications services. We're starting out in phase one by looking at what the needs of Canadians are. What do people need the Internet for? What speeds do they need to be able to participate in society as they would like to do and get the full benefits of the digital economy? It's taking a look at what gaps are currently in place in Canada, who doesn't have access to the appropriate speeds, even defining what appropriate speeds are, and what do people need to be able to participate. As part of that process, we will be looking at the different roles of not only the service providers but also the government and the CRTC. How can we all work together and potentially expand broadband out as for as possible? We'll be looking at whether the current subsidies we have in place for basic telecommunications services need to be altered. It's a full-up process, a multi-step process, much like we did with Let's Talk TV, trying to get as much participation from Canadians as possible to get as much evidence as possible to be able to make a rational decision next year around this time.
[Translation]
Senator Bellemare: My secondary residence is in a region that is barely 100 kilometres away from Montreal, and we don't have access to high-speed Internet. In fact, a few years back, a large number of residents in the region complained to the CRTC. Industry Canada, however, is the one that grants votes for telecommunications. Are the CRTC and Industry Canada working together to make sure that every household in the country is connected within the next two to five years? I believe that was the target that was established.
[English]
Mr. Traversy: We are an arm's-length organization, but as our chairman likes to say, that doesn't mean we can't touch from time to time. Yes, of course, we're in contact with them. We try to keep things coordinated on that front to make sure that we each know what they're doing and what their projects are going to be for the upcoming year. Of course, when a process starts, we deal then just with the record of that process for making decisions at the end of the day, but we try to coordinate that.
[Translation]
Senator Bellemare: Does the CRTC decide on investment priorities for the regions, or is that outside your jurisdiction?
[English]
Mr. Traversy: The service providers get to decide their own business, what's best for them, and we try to put the right incentives in place so that they move out in the appropriate manner, but getting into it or a neighbourhood-by- neighbourhood decision, the service providers actually decide that.
[Translation]
Senator Bellemare: Mr. Joli-Coeur, a program by the name of Accessibility and Audience Engagement appears in the estimates. Would you mind telling us briefly what that program does? I see that funding for the program has gone down.
Mr. Joli-Coeur: It encompasses all of our distribution and marketing activities, in other words, how we make our films accessible to audiences. It represents all of our distribution, communications and marketing personnel, teams who are experts in these areas.
Senator Bellemare: It covers the costs.
Mr. Joli-Coeur: Precisely. Our mandate is to produce and distribute films. Our focus is on the entire distribution process.
Senator Bellemare: Do you do any education as far as promoting the audiovisual industry is concerned?
Mr. Joli-Coeur: Absolutely. Education has always been a priority for the NFB, throughout its 75-year history. We all remember those 16-millimetre projectors in classrooms. We offer CAMPUS, an online platform equivalent to the NFB.ca Web site. All schools can subscribe to the portal. We've signed subscription agreements across the country. The vast majority of teachers have access to the site, where content and films are organized so that they can be used as teaching resources. Students all over the country have access to our films.
Senator Bellemare: Do you arrange educational activities to promote the film industry, for instance, in order to train people in the field?
Mr. Joli-Coeur: No. The NFB is strictly a film producer. We don't have a mandate to provide training. We do a lot of work with young filmmakers. We provide funding for first and second films, but we don't do anything when it comes to training filmmakers.
Senator L. Smith: Mr. Joli-Coeur, do you offer any educational programs for Aboriginals? Is that part of your mandate?
Mr. Joli-Coeur: The NFB places tremendous importance on Aboriginal creators. We do a lot of work with First Nations and Inuit filmmakers. We have producers who develop films with Aboriginal filmmakers, and our films depict a number of issues specific to Aboriginal peoples.
Senator L. Smith: But is the focus on education?
Mr. Joli-Coeur: No. As producers, we often work with young Aboriginal directors, supporting the creative process, just as we do with non-Aboriginal directors.
Senator L. Smith: What share of your activities does that work represent? Is it a small percentage? Supporting Aboriginals is important to us. We would like to obtain a bigger budget from the Department of Aboriginal Affairs. I'm trying to see how one group interfaces with the other in order to give Aboriginals more advantages.
Mr. Joli-Coeur: The NFB possesses the largest collection of Inuit films in the world. Inuit filmmakers have made more than 110 films, and the works largely reflect their culture. Off the top of my head, I can't tell you the exact share of our budget that we spend on Aboriginal filmmaking, percentage-wise, but I can get you that information. They are one of the most important groups that we work with, and that work happens all over the country.
Senator L. Smith: Would you be able to provide us with a summary of activities focused on Aboriginals? That information would add another layer to our study.
Mr. Joli-Coeur: I would be pleased to do that. It's an area I am especially passionate about. The calibre of creativity among Aboriginal artists is very high. Our NFB.ca Screening Room has a channel dedicated to Aboriginal peoples. We produce a number of Aboriginal films every year. Last weekend, I was on a Haida reserve for a screening of one of our films in a longhouse. We're very involved in Aboriginal communities. I'll provide you with a description of our Aboriginal film work, both in terms of production and distribution.
Senator L. Smith: Would you be able to put together a document for the committee?
Mr. Joli-Coeur: Absolutely.
Senator L. Smith: Aboriginal groups are often critical of us when it comes to resource shortages and education- related issues.
Mr. Joli-Coeur: That's part of our activities. The NFB used to have in-house filmmakers. Now, we have just one left, Alanis Obomsawin, and she is currently working on her fiftieth film with the NFB. I'll get back to the committee with a summary of our activities.
Senator Eaton: Will your new headquarters in Montreal be similar to the Bell Lightbox building in Toronto, which promotes the artistic community during the film festival?
Mr. Joli-Coeur: The City of Montreal has designed it to be a flagship building. It will bear the NFB name, and offer public areas where audiovisual works, artifacts and facilities will be accessible to Canadians.
Senator Eaton: You'll have a very prominent physical presence, just like Bell Lightbox.
Mr. Joli-Coeur: Exactly. Montreal's Place des festivals area can regularly accommodate up to 100,000 people. Films will be projected for viewing onto our building. It will have a very strong presence, indeed.
Senator Eaton: My hats off to you. In terms of the Aboriginal activities you'll be providing us with a summary of, do you allocate a certain percentage of your budget to Aboriginal productions, specifically, or do those activities fall within the overall budget?
Mr. Joli-Coeur: Every programming group's action plan includes a significant Aboriginal component, but we don't allocate specific amounts to those activities. Instead, it's part of our ongoing involvement in that area.
Senator Rivard: I have two questions for the CRTC representatives. In your opening statement, you said you make sure that Canadians can access 911 services. Where in the country's 13 provinces and territories are 911 services not available to Canadians with telephone access?
[English]
Mr. Traversy: Currently, the vast majority of Canadians have access to 911, and I might need to get back to you. I think there might be some areas in the North that we're still working on that don't have access just yet, but it is a priority for the CRTC, and in our 2015-16 plans and priorities, you see 911 comes up in a couple of different places that we're looking at — not only the current 911 system, but we're also looking at the next generation of 911 and trying to do the best we can to roll it out.
We have to operate in cooperation with the municipalities and, sometimes, the provinces to put the actual infrastructure in place. We can only do so much, of course, working with the telecommunication service providers to make sure they have the infrastructure to provide it, but to actually put the public access points in place is the responsibility of the municipalities, and from time to time, that can be a difficult situation.
[Translation]
Senator Rivard: Here's proof that we've come a long way. If I remember correctly, 9-1-1 services were introduced in the early 1980s, starting with Montreal's urban community, followed by Quebec City's. In the beginning, it was paid for by the municipalities, and then, telephone companies would charge subscribers for the service. It's still the same today. When I get my monthly telephone bill, it shows a charge for 911 services.
Your role, then, is to supervise activities; you aren't an operator, arbitrator or monitor. You make sure that, generally speaking, Canadians have access to the service. Apart from a few remote areas up North, is it safe to say that 99 per cent of Canadians in all 10 provinces can pick up their telephone and dial 911?
[English]
Mr. Traversy: We like to see our role as a coordinator, and not only that, we have the mandate and the powers to ensure that the telephone service providers have all the facilities in place to make sure that 911 is available to the residents. It's a very big part of our protection pillar to ensure that protection is provided within the communications system in general. It is a very big part of our mandate, and a lot of people are involved. There is a lot to coordinate, but we do have working groups that meet throughout the year to try to do the best they can to coordinate the activities.
[Translation]
Senator Rivard: My last question pertains to the Spam Reporting Centre. It's been in place for a few years now. Do you know how many complaints the CRTC has received about spam? Furthermore, do you know how many companies have broken the law, and what is the penalty for a first violation versus a repeat violation? Does the fine revenue go to you or does it go to the Consolidated Revenue Fund?
[English]
Mr. Traversy: I think you're talking about the anti-spam legislation, and that came into force July 1 of this year, so it has been a big activity at the CRTC. It's fairly recent, but we've had some activity, and I have a few stats to share.
It's interesting as the CRTC goes on in time. Of course, we were traditional broadcasting and telecommunications. We regulated and supervised those industries. As times moved on, we're moving more and more into the compliance and enforcement game, starting with the National Do Not Call List, went on to CASL, Canada's anti-spam legislation, and now the Voter Contact Registry.
We did have some success, and my understanding is that close to a few hundred thousand complaints have been received so far at the spam reporting centre. We have a large database at the CRTC that we set up for this program that collects all the complaints and all the other nefarious things people receive over their Internet, whether it's Spotnets and other things. Our analytical teams at the CRTC can try to make sense out of it and target as to where they will be going for investigations.
We've had some success. We've had one notice of violation that went out to Compu-Finder. That was the first we sent for a fine of $1.1 million. Since then, we followed up with another administrative monetary penalty to Plenty of Fish, which is an online dating service, which didn't have an unsubscribe button, so they were sending or soliciting by email trying to get subscribers, and one of the rules we have in place that came in the legislation is there has to be an unsubscribe that is readily accessible, so you can't have an unsubscribe button where you have to go to a different website and go through four or five activities to get there. It has to be fairly easy to go to.
Just this week, there was an organization from the United States called Cloudmark. They're headquartered in San Francisco, and they are very much into monitoring spam and email activities in different countries. We had nothing to do with this report. They put forward that spam originating from Canada since July 1, 2014, has dropped 37 per cent. There were a couple of other factors involved, but primarily it was because of the regulations that we and Industry Canada have put in place. That was encouraging. We will follow up with them to see the details behind it, but it was a news release that they published that we thought was good news.
[Translation]
Senator Rivard: Thank you. You're right, the spam centre is only recent. I was thinking of another problem, telemarketing. That measure has been in place for a few years now. Is your agency responsible for those complaints and fines?
[English]
Mr. Traversy: There has been a program in place since 2008, so we have experience in telemarketing. I can recall that the first couple of days that we put up the National Do Not Call List, we were getting so many people who wanted to register with it I think it actually crashed on us. We had to refurbish it. I don't have the exact number of complaints, but I can remember at the time it was running 800 or 900 a day and levelled off at 400 or 500, so we're still getting a lot of complaints. Of course, we all still receive telemarketing calls that are a nuisance; they always come in at the wrong time. At one time we had statistics, or there was a survey that most Canadians felt they were getting significantly fewer telemarketing calls once our program into place.
The goal of eliminating it completely will be difficult, but we're doing the best we can. We have quite vigorous enforcement activities. In fact, in 2014-15, we leveled administrative monetary penalties of $2 million on the telemarketing side. The total since the start of the program in 2008 is $6.2 million. All this revenue goes to the Receiver General.
[Translation]
Senator Rivard: My apologies, once again. When I asked my first question, I actually had telemarketing in mind. The spam measure is more recent, but the telemarketing program has been around for a few years, and the problem has indeed improved considerably.
[English]
Senator Wallace: Mr. Joli-Coeur, in your presentation you mentioned that you're implementing a new action plan that will ensure financial stability over the next five years. My colleague Senator L. Smith touched on that plan in his questions. You said that the plan would implement a new marketing and distribution strategy for the NFB. Is it directed to the implementation of a plan that has been created, or is the funding going as well to create this new plan?
Mr. Joli-Coeur: It's basically to reorganize our activities in a much more efficient way so that all aspects of distribution, including marketing and communication, are working together to be most effective. We've made cuts to our overhead to make it simpler. It's basically an internal reorganization to be more efficient in how we reach Canadians and our audience.
Senator Wallace: You are not going to solve marketing issues by just cutting.
Mr. Joli-Coeur: As an example of that, we used to have three directorates: communications, marketing and partnerships. They were headed by different people who didn't have the same goals and approach. In my new restructuring, one directorate will oversee all of those activities to ensure that everyone works in the same direction. Those were internal efficiencies to make it simpler and better.
Senator Wallace: As far as an overall marketing direction for the NFB goes, to keep it current and to increase viewership, are you taking a new direction with your marketing, aside from making the administration more efficient? What about the actual marketing?
Mr. Joli-Coeur: We will put a lot of emphasis on social media and social marketing through different platforms, how we reach the audience directly, the way we buy ad words, how we put banners to make sure our efforts are reaching the right audience, implementing ways to attract people coming to see our films and encouraging them to see other films through a profile of our viewers. We are modernizing our approach.
Senator Wallace: Would you retain consulting firms to advise you on how to tweak your marketing to make it more effective?
Mr. Joli-Coeur: We hired a new director who is an expert in that field.
Senator Wallace: It would be the same thing with your distribution strategy. Would you develop that strategy in- house?
Mr. Joli-Coeur: Yes. We have a good sales force, but it's really the synergies between our sales and reaching our audiences; and sometimes you have to balance that. Sometimes you have to organize public screenings, so it's all coordination. We generate the largest audience and reach revenue targets that we need to implement our overall activities.
Senator Wallace: With this new plan to create the stability over five years, I'm getting the feeling as I listen to you that you'll tweak what you have done in the past and have had success with. Is it really tweaking the existing system, or are you going in a new, dynamic direction?
Mr. Joli-Coeur: Both. Of course, we always need to be at the cutting edge of new ways to reach the audience and market. A lot of it has to do with how we work together, the synergy and avoiding silos. It's so easy to have people not targeting in the same direction toward a common goal. A lot of emphasis is put on hierarchies, more synergies and how we all work together in the same direction. That's a major challenge.
Senator Wallace: Do you follow what's happening in other countries and their film boards that would be comparable to the NFB to know what they're doing and what direction they're taking so that you have comfort that you're adopting best practices on an international basis?
Mr. Joli-Coeur: The film board is unique. There aren't many comparables. But we can compare ourselves to distribution companies and production companies in the private sector. At the end of the day, we're basically doing the same thing as any production or distribution company. We are a production and distribution company, so it's those best practices, market intelligence and new business models that we are always looking for in that system of film production and distribution. That leads us in terms of being at the forefront.
The Chair: I would like to take you back to your new building. This question may be better asked to Ms. Darveau. I don't understand. You're not moving until 2017, but you've already had approved $14.4 million to pack up and move. First, have you started using that $14 million? Second, why is it shown as a loan? Why wouldn't it be out of your internal expenses?
[Translation]
Marina Darveau, Director, Finances, National Film Board of Canada: The $14.4-million loan came from the Treasury Board for the next few years. The bulk of that money will be allocated in 2017-18, the year of the move, and in 2016-17. The loan is based on what the NFB needs liquidity-wise to complete the project. The money will be allocated in the future. We are in talks with Treasury Board to ensure the funds are transferred in accordance with the construction schedule.
The Chair: Will the money be available when you need it?
Ms. Darveau: Yes.
The Chair: Why does it appear as an interest-free loan, no different than any other expenditure?
Ms. Darveau: The reason is that Treasury Board hadn't set aside any funding specifically for this kind of activity. Those were the conditions imposed on us in order to receive the funding.
The Chair: So you will be repaying that amount to Treasury Board?
Ms. Darveau: Yes.
The Chair: In a number of years.
Ms. Darveau: We'll be repaying $1.2 million every year for 12 years following the move.
The Chair: Is there additional funding that will have to be repaid to Treasury Board?
Ms. Darveau: No, no additional funding.
The Chair: No? No additional funding. That's good. Thank you.
Senator Mockler: I want to commend the NFB on the quality of the products it provides to Canadians.
Could you tell the committee which films were the most significant in terms of reflecting Canada's national identity throughout the regions, whether in the Atlantic provinces, Quebec, Ontario or the Western provinces? What were those films? There must be a difference between films that represent rural regions versus urban ones.
Mr. Joli-Coeur: It's a bit tough to say. We produce 70 films a year. So that's nearly 400 films over the past 5 years. Some stories, while very specific to a region, still have a universal appeal. In fact, a story from your region comes to mind, the one about the jockey Ron Turcotte, which we made into a film.
Senator Mockler: Were you reading my notes?
Mr. Joli-Coeur: I was fortunate enough to visit Mr. Turcotte at home before the film was made, back when we were trying to convince him to do it. It's an incredibly inspiring story, and the film met with success all over the world, given Mr. Turcotte's popularity. We have other films that tell stories that are more specific to a particular region, and I think that's what makes our film heritage so rich and diverse.
We just produced a film about former Newfoundland Premier Danny Williams. The film wouldn't have been produced without the NFB. It took longer to make than private productions can normally accommodate given the level of observation and involvement.
It's a bit difficult to give you an answer. Last year, 111 awards were bestowed on our films, films that were honoured in festivals around the world.
Our film collection certainly depicts the full spectrum of Canadian issues. We produce films in every part of the country for every group. Every segment of society can see themselves reflected, to one degree or another, in the films we produce. We've had a studio in Moncton for more than 35 years. I've been fortunate enough to witness how vibrant and dynamic Acadian productions are; it exceeds the national average.
Senator Mockler: You know what I mean, since you practically read my notes. Ron Turcotte is the best jockey ever.
Mr. Joli-Coeur: For sure.
Senator Mockler: With the best horse ever, Secretariat.
Mr. Joli-Coeur: Obviously.
Senator Mockler: Concerns remain, however, when it comes to regional production, in other words, rural production versus urban production. How much of your budget is allocated to major urban centres versus rural Canada?
Mr. Joli-Coeur: Instead of talking about rural regions, we can talk about regional percentages for the country. Just to give you an idea, the studio in the Acadie region accounts for roughly 6 per cent to 7 per cent of this year's French- language production, and in 2012-13, that number was 12 per cent. For Ontario and French-speaking Western Canada, it's around 8 per cent or 9 per cent. On the English-language side, the breakdown is relatively even across the country, on a per-capita basis. In terms of production dollars, I can say that they are really spread out across the entire country. Our administrative resources, however, are concentrated more in Montreal. As far as creation and accessibility are concerned, the regional breakdown is pretty even in proportion to the population.
Senator Mockler: I should probably take advantage of this venue to invite Mr. Joli-Coeur to the grand unveiling of the Ron Turcotte monument in Grand-Sault.
The Chair: In Grand-Sault, New Brunswick.
Mr. Joli-Coeur: I've been to Grand-Sault. I was there in the summer for the Acadian world congress, where we screened the Ron Turcotte film. But I accept your invitation.
Senator Mockler: Even Senator Gerstein has been to Grand-Sault.
I was looking at your budgetary appropriations to figure out whether funding for Atlantic film production had gone up.
Mr. Joli-Coeur: No. It hasn't gone up, but it's certainly stable.
[English]
Senator Mockler: Probably this question will be for the three presenters, but I will just ask you, Mr. Traversy. What role do you play with community radio, and to what extent are you involved?
Mr. Traversy: The CRTC has a large role to play with community radio. Over the last couple of years, we've allocated funding for community radio. There is an envelope of funding there to support them. They are licence holders of the CRTC. Some of them are exempt, but nonetheless, we see community radio as, right from the Broadcasting Act, a big part of the system. We try and support it as much as we can.
Senator Mockler: With the experience you have now and your involvement, going forward do you foresee them playing a bigger role in information for Canadians if we compare them to public broadcasters?
Mr. Traversy: That's an interesting question. I'm not sure if I'm going to go there today, actually, but it might be something we can follow up with.
I certainly see that more than likely there will be an increasing role in community broadcasting to make sure the information needs of communities are looked after. Of course, as the broadcasting system gets more global and more is provided through the Internet, there will obviously be a continuing role to ensure that the local communities get the news they require on community and cultural events in that community, and community radio is a good way to do it.
Senator Mockler: What role does the CRTC foresee, to some extent, in providing information, news, local news, l'actualité, when we talk about social media in general?
Mr. Traversy: The CRTC's role in social media?
Senator Mockler: Yes.
Mr. Traversy: I think we're currently seeing it as complementary to the existing broadcasting system. Right now, social media is outside the realm of what we're involved with, outside of the focus on the regulatory front. It's growing in importance, no doubt about it, but it's not something we bother to entertain or that we're taking a look at as something we should be regulating.
Senator Mockler: As we go along and look at information to the public at large, Facebook plays an important role. Do you monitor what is happening on that particular network?
Mr. Traversy: We use it ourselves, actually. We have a Facebook and a Twitter account, of course, and we use it as a way to get information out to Canadians to ensure they understand what we're doing. It seems like those mediums are taking care of themselves and seem to be growing. I'm not sure if they need any regulatory support or regulatory intervention at the current time from the CRTC.
Senator Mockler: This is probably a hypothesis, but I think there is a role to play. Would the CRTC be that infrastructure or that body to play a role, for example with Facebook and others, so that we can have accurate news broadcasts and/or information to the public and to monitor? Not all information is good information.
Mr. Traversy: The CRTC is very much concerned, and there are even proceedings coming up for this year on community programming, which includes local programming from the conventional players, to ensure that communities get the local information they require. Of course, Canadians require local news to be able to participate in society. To actually scope in some of the electronic media or digital media into that is not in the current plans.
Senator Mockler: Mr. Chairman, a comment and a question, with the indulgence of the chair.
The Chair: The indulgence of your colleagues, too.
Senator Mockler: It will be the last one.
You said to the previous senator that you're looking forward to looking at consultation processes with Canadians. Would the social media side of what we have just discussed be part of that objective you're looking for?
Mr. Traversy: As I was talking about this upcoming proceeding on the basic telecommunications services, of course, and what Canadians are looking for, they're going to be certainly communicating with us using all the means you talked about, so they do have the opportunity and they can communicate with us any which way they would like. The medium will be there. Whether the medium will be a focus? Of course, the focus is more to ensure that Canadians have access to all those outlets. We want to ensure that Canadians can actually have access to Facebook, Twitter and other new applications that are ongoing and require a broadband connection. To get into the specifics of those specific applications is currently outside the scope of that proceeding.
[Translation]
The Chair: We have two senators with questions for the second round, Senator Chaput and Senator Rivard.
Senator Chaput: My questions will be brief, and the answers can probably be brief as well.
My first question is for the NFB officials, but you may have already answered it.
Do you work with French-language production companies outside Quebec? In other words, do you contract them out or do they work for you?
Mr. Joli-Coeur: We co-produce with some production companies. We also work directly with the artists and creators we hire as producers. So we use both methods. We produce some films entirely, with creators from around the country, and others, we co-produce.
Senator Chaput: Percentage-wise, roughly how much would you say you collaborate with production companies versus working with creators directly?
Mr. Joli-Coeur: It varies by year and cycle. It can be as high as 50 per cent.
Senator Chaput: What does it depend on?
Mr. Joli-Coeur: It depends on the year and the project.
Senator Chaput: My second question is for the CRTC representatives. You sometimes set conditions when granting licences.
Have you ever encountered cases where you granted a licence based on certain conditions and the network didn't respect them? And if so, what happens?
[English]
Mr. Traversy: Yes, that happens from time to time, where licensees either in error perhaps or for financial reasons have trouble respecting the conditions of licence, and yes, there are consequences for that. We have an elaborate monitoring system at the CRTC. We find even complaints from the other broadcasters and the people living in those communities normally twig us also that there might be someone offside with their conditions of licence. We have a couple of options. Of course, we try to network with them to get them into compliance. If we need to, we can call them to a public hearing to have a public discussion of what the problem is. We can even issue a mandatory order, which we can eventually register in the courts to try and get them to be on side with their conditions of licence. There is some recourse. It can be difficult sometimes.
For the most part, though, the broadcasting system is getting — there are a lot of bigger players, of course, and they tend to follow the rules as much as possible. They have other applications in front of us and other proceedings where they will be looking for something from the CRTC, so we find in general that they follow their conditions of licence.
[Translation]
Senator Chaput: My last question is for the Department of Canadian Heritage.
I looked through your estimates and couldn't find any program funding for independent producers or production in Canada, in the form of either grants or contributions.
I seem to recall that the department had established a fund for independent productions in Canada a few years back. A percentage of the funding was for English-language production in Canada, another percentage was for French- language production in Quebec and a third percentage was for French-language production outside Quebec. Does that fund still exist?
Mr. Borbey: Are you referring to the Canada Media Fund?
Senator Chaput: I believe that's it, yes. It's a fund for independent producers, is it not?
Mr. Borbey: Producers can apply for funding, but the fund is for all broadcasters. It's called the Canada Media Fund. The Government of Canada currently contributes $134 million to the fund every year, and broadcasters contribute even more.
Senator Chaput: Yes, I remember now.
Mr. Borbey: That money then goes towards production. So it can be used for independent productions. For instance, CBC and Radio-Canada can apply for program funding to pay for a portion of their productions.
Senator Chaput: You still contribute $134 million?
Mr. Borbey: Yes.
Senator Chaput: Where does that funding appear? Is it a grant or contribution?
[English]
Mr. Francis: Contribution to support the Canada Media Fund.
[Translation]
So it's $134.1 million.
Senator Chaput: I thought francophone media was newspapers and periodicals.
Mr. Borbey: We also have a fund for periodical distribution.
Senator Chaput: That's another fund?
Mr. Borbey: Yes. It's a fund managed by the department worth just over $70 million to support the distribution of periodicals across the country.
Senator Chaput: So that would be the Canada Periodical Fund. And the Canada Media Fund is for audiovisual production.
Mr. Borbey: Yes. Telefilm Canada also manages a film development fund.
Senator Rivard: My question is for the CRTC and NFB officials. Each of your organizations has a board of directors with members appointed by the Governor-in-Council, does it not?
[English]
Mr. Traversy: We have members of the commission, that's correct.
[Translation]
Senator Rivard: So your organization doesn't have a board of directors appointed by the Governor-in-Council. Does the NFB have a board of directors?
Mr. Joli-Coeur: Yes.
Senator Rivard: Are board members appointed by the Governor-in-Council?
Mr. Joli-Coeur: Yes, precisely.
Senator Rivard: Aside from responsibilities such as appointing external auditors, and reviewing financial statements, could you tell us what the board's most important role is, as far as developing or reaching new markets is concerned? Can you tell us just how important the NFB's board of directors is?
Mr. Joli-Coeur: It's very important. It represents the entire country. The board of directors approves our strategic plan and financial statements, and does a quarterly review of all our financial components. The board receives quarterly reports on all our activities. The board ensures governance and oversight for all of our activities, and that function is well established.
The board meets at least four times a year. The Office of the Auditor General reviews our books, and the board of directors approves the audited financial statements every year.
Senator Rivard: Does the CRTC have a board of directors?
[English]
Mr. Stefanik: The CRTC is a department under section 1.1 of the Financial Administration Act. We do not have a board of directors as such. We are headed by our chairman. The chairman is appointed through a Governor-in- Council appointment. However, his responsibilities, from the administrative standpoint, are similar to a department head in a department.
The Chair: Do you have an internal audit committee?
Mr. Stefanik: We do not have an internal audit committee, but we have made use of the Office of the Comptroller General's audit committee for small departments and agencies. We are actually proud that when the committee was formed, the commission was the first department to take an audit report to that committee and present it. We have since actioned on the observations that were raised in that audit report.
The Chair: Does the Auditor General of Canada have jurisdiction over the CRTC?
Mr. Stefanik: The Auditor General may come in and audit our accounts at any time. To date, the OAG has not been at the commission for at least 25 years that I've been at the commission.
The Chair: From the point of view of the National Film Board, when was the last time the Auditor General of Canada dropped in to say hello?
[Translation]
Mr. Joli-Coeur: The Office of the Auditor General prepares our audited financial statements.
[English]
The Chair: Seeing no other questions, I would like, on behalf of the Standing Senate Committee on National Finance, to thank each of our witnesses who have been here this evening, the National Film Board, the CRTC and Canadian Heritage. We very much appreciate the work you are doing, and we thank you for being here this evening to help us understand more clearly the work you are doing. Thank you. This meeting is now concluded.
(The committee adjourned.)