Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 1 - Evidence - October 30, 2002


OTTAWA, Wednesday, October 30, 2002

The Standing Senate Committee on Transport and Communications, to which was referred Bill S-8, to amend the Broadcasting Act, met this day at 6:15 p.m. to give clause-by-clause consideration to the bill.

Senator Joan Fraser (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, this bill is identical to Bill S-7, which was introduced by the Honourable Sheila Finestone in the last session of this Parliament. This committee studied Bill S-7 over a period of five days and received evidence from 14 witnesses as well as written submissions from a number of other organizations. The committee reported Bill S-7 to the Senate without amendment, but with an observation.

[Translation]

The bill was passed by the Senate and sent to the House of Commons. Because of procedures in that House, the bill was deemed reported out of the Canadian Heritage Committee in early June. Parliament was prorogued before the bill came up at report stage consideration. Therefore, we are starting the process all over again in the Senate.

[English]

Bill S-8 was presented by Senator Kinsella, who is with us this evening to discuss the bill together with Ms. Finestone, who, as I said, was the original creator of this bill.

After we hear from them and have had an opportunity to question them, we will hear from other witnesses. We will hear first from the Canadian Association of Broadcasters and the Canadian Cable Television Association. They will be followed by representatives of the Canadian Broadcasting Corporation.

Senator LaPierre, a member of this committee, has received a letter from Astral Media that they would like to have circulated, and Senator LaPierre has asked that we do so. We have, for the moment, only the French version of the letter. We will be getting an English translation.

Are there any objections to having the letter circulated in French only at this time? It seems appropriate to me.

After we have heard our witnesses, I will propose that we take a short break and then sit down again to consider what we have heard. If we are satisfied with the information we have received, we can then proceed to clause-by-clause consideration of the bill.

This is a fairly heavy agenda for this evening, so I will ask senators and witnesses to be concise. We want to get all the information we need, of course, but it will be helpful for all of us if it can be presented in concise form rather than in long form.

Senator Kinsella and Ms. Finestone, please begin.

[Translation]

The Honourable Noël A. Kinsella: Bill S-8 is abundantly clear as it contains only three paragraphs. At this time, I would like to outline the purpose of the proposed legislation.

[English]

Madam Chair, you have very accurately summarized the process concerning this bill in the last session in the Senate and the other place. In the last session, the bill received an in-depth analysis in the Senate and was adopted unanimously at second reading. It was referred to the Standing Senate Committee on Transport and Communications, the testimony of which is in the proceedings of the committee from that time. The bill was reported from that committee and adopted unanimously by the Senate at third reading. It was submitted by message to the other place, where it was dealt with through the various stages. The chair has reflected accurately that prior to prorogation it was out of report stage in the House of Commons and ready for third reading.

Notwithstanding that, I laud all honourable senators for wanting to have bills proceed through the regular steps, even those bills that have died on the Order Paper as a result of prorogation. Therefore, I will briefly speak to the bill now before us.

The bill attempts to level the playing field and be of tremendous interest and assistance to the CRTC in carrying out its responsibilities as it examines applications from corporations in terms of licensing, et cetera, under the Broadcasting Act. The CRTC has a similar responsibility under the Telecommunications Act; in particular, under the Telecommunications Act at sections 56 and 57 there is a procedure whereby the CRTC is authorized to make awards of cost to intervenors who help the CRTC in examining, in the public interest, which is their objective, various applications.

Unfortunately, a similar vehicle or mechanism is not available when there are applications before the CRTC relative to the Broadcasting Act. This bill simply provides an amendment to the Broadcasting Act that will give the authority to the CRTC to examine those kinds of requests that may come forward from those who intervene in the CRTC hearings to help the CRTC and to make awards in terms of costs.

I wish to underscore that the CRTC would also — and it is provided for in clause 2 of the bill — establish the guidelines that they would follow, just as they do under the Telecommunications Act, in awarding costs to these intervenors. My reading of the telecom cost order CRTC 2002-15, dated October 22, 2002, which outlines the criteria under that provision and which document I would be happy to table, as I think is the reading of honourable senators who reviewed this document, is that those criteria are very stringent. The CRTC would, it is hoped, upon the adoption of this bill by Parliament, carry out hearings to develop these criteria, and I would suspect that we would find equally rigid criteria developed for the process under the Broadcasting Act as under the Telecommunications Act.

In summary, as far as process is concerned, the issues have all been canvassed for and against. We are happy to respond to any questions that may come forward, and new kinds of questions. I congratulate the Senate for following the normal process and giving the opportunity to additional witnesses to appear, even at this stage in our hearings.

It is a great pleasure for me to be sitting at the right of a privy councillor who, as the chair has mentioned, was the author of the bill in the last session. Perhaps our former colleague would be given the opportunity to expand on some of the substance of the bill.

The Honourable Sheila Finestone: Honourable senators, I wish to say at the outset that this is a wonderful surprise. Thank you for inviting me. Thank you, Senator Kinsella, for reviving, like the Lazarus principle, this bill on its third round, and thank you to my adviser Dr. Andrew Reddick.

During our hearings last year, and at the House of Commons Standing Committee on Canadian Heritage, all witnesses supported the underlying principle of the bill, which is that in every democratic society we should foster active citizen participation in public issues. Modern democratic life requires an active role from the population and needs participation from members of the community. That being said, I should like to review some points with honourable senators, if I may.

As Senator Kinsella pointed out, the summary of the bill, in essence, is an amendment to the Broadcasting Act in order to enable the CRTC to make regulations establishing criteria for awarding costs and to give the commission the power to award and tax costs between the parties that appear before it. That is the sum and substance of the bill.

The wording of Bill S-8 is exactly the same as the wording in sections 56 and 57 of the Telecommunications Act. It was absent from the Broadcasting Act. Why is it essential to amend the Broadcasting Act? First, this amendment brings the act into concordance with the Telecommunications Act where the rights to cost recovery have existed for years. Second, let us recognize that, in this brave new world, convergence and the information highway have created deep interplay between telecommunications and the broadcasting services used by the public, such as the new media and Internet. Thus, we are in a new ballpark.

Often the CRTC has been faced with issues related to the Telecommunications Act and the Broadcasting Act simultaneously. Regardless of the validity of the arguments presented, the CRTC has been able to award only those costs covered by the Telecommunications Act, not under the Broadcasting Act, even though the information provided under both acts has proven to be pertinent and value-added.

Third, the vastness of the funding available to media companies is in outright contrast to the financial limitations faced by consumers and their representative groups. This condition, therefore, creates imbalances and inequalities that are inconsistent with our democratic system. Substantive and effective participation by consumer organizations representing the interests of citizens — and senators have strong regional interest as well as national interests — are often hampered by financial limitations owing to the fact that detailed research studies and expert assistance is very costly.

As an example, this important multibillion dollar industry that comes into our very homes and the homes of all Canadian citizens, the industry that affects Canadians, spends tens of thousands, sometimes hundreds of thousands, even a million dollars on these important hearings, whereas the public interest groups spend perhaps — as history has shown us — hundreds or perhaps $1,000 to present their research and the value-added information that is required. So far, rarely have the costs of intervenors been awarded to the public interest groups.

In the interest of equity and balance, and with the rules in place by the CRTC through their public hearings, this proposed amendment would be a useful improvement for all of us in the TV world and a major contribution to the democratic process of our lives.

Fourth, the much-needed proposed amendment would bring both acts into symmetry and balance. Thus, consumers will be fairly treated in all proceedings before the commission, whether conducted in relation to the Broadcasting Act or the Telecommunications Act.

Fifth, we have a significant amount of experience in this field. Other regulatory agencies in Canada provide for the payment of costs of intervenors, such as the Canadian Transportation Association, Hydro-Québec, Ontario Hydro, B.C. Hydro, et cetera. Many of these tribunals that regulate public utilities or important public services award costs of public interest intervenors to reimburse them for their intervention. There are strict rules and regulations around this, as Senator Kinsella pointed out, where value-added can be easily determined through the CRTC guidelines.

Sixth, this amendment is extremely beneficial to the Canadian public. Cost awards will allow consumers and public interest groups, as well as individuals, through research and substantial evidence, to represent effectively the interest of citizens in broadcasting and cable television policy and regulatory proceedings both at the local and national level.

This proposed amendment would allow constituents to effectively challenge cable TV issues such as rate increases, channel packaging, and licensing conditions of local broadcasters. The issues examined by the commission could have wider repercussions for the population in general, national issues such as television policy or cable television distribution regulations. As well, the rates consumers pay for cable television services could potentially be at stake. I would remind honourable senators that rates have increased by about $3 over the past year, and I suggest this is because of deregulation.

Seventh, consumer groups across Canada strongly support this initiative since they are aware of the importance of equal representation under the Broadcasting Act. Among the organizations supporting the proposed amendments are the British Columbia Public Interest Advocacy Centre, the Public Interest Law Centre, the National Anti-Poverty Organization, the Canadian Labour Congress, the Canadian Library Association and the Manitoba chapter of the Consumers' Association of Canada. The list goes on and on.

I must point out again, honourable senators, that the high level and quality of citizen participation in broadcasting matters cannot be compared to that of telecommunications proceedings, for one reason: Simply stated, they have not been able to provide quality evidence and substantive participation because of financial constraints, which I outlined a moment ago. The most effective citizen participation has become even more relevant since this bill was first introduced. Over the past two years, the CRTC has instituted a number of proceedings relating to convergence, pricing, service and industry consolidation, proceedings that are of great interest and relevance to the consumer.

For example, broadcasters and cable companies will be changing the technology they use for broadcasting television signals, from analogue to digital. This will cost several hundred million dollars, at least, and will change how channels are packaged and sold to consumers.

Consumers will also be required to purchase new televisions or rent digital decoders. We are living in a wonderful new world and we have a marvellous broadcasting industry, but we have a right to a voice too. Who will bear the cost of these undertakings? How will this technology change affect the pricing and choice of programming and channels for consumers?

To give you an example, in 1997 the Public Interest Law Centre in Manitoba represented consumers in a cable television rate hearing. In this decision, the rate increase applications were not approved. The consumers were very happy. Those of you who represent Manitoba must have heard of this. It saved consumers $1 million. Several thousand dollars were spent on expert assistance representing consumers in this case. However, in the absence of cost awards, the Public Interest Law Centre had to absorb the total financial loss.

A letter dated February 25, 1999, was sent by the law centre to Minister Copps and the Department of Canadian Heritage supporting the need for a cost-award amendment in the Broadcasting Act. The letter usefully sums up the impact of this problem. In the letter, the law centre says that while they are a not-for-profit office, they cannot justify continued participation in time-consuming and expensive broadcast proceedings unless they are able to recover their costs. They said that, as a consequence, Manitoba consumers have been denied the right to fully participate in regulatory proceedings under the Broadcasting Act.

They had been saved $1 million, but the cost was absorbed in another way, and that is not fair. I should like to remind honourable senators that in all of these proceedings every penny spent by the regulated companies to defend the interests of their shareholders was indemnified by the customers.

The CRTC will now be deregulating the price of basic cable services in most areas across Canada. Deregulation is liable to bring another series of cost increases. How can Canadian consumers effectively challenge any unfair price increases or declines in service quality at the CRTC if they do not have access or sufficient resources to do the proper and needed research? Without the ability to recover costs related to the gathering of substantial evidence, consumer participation is very limited. While consumers and consumer groups may be able to present short briefs expressing general principles and expectations, they are not able to afford in-depth research and testimony. Their meagre efforts crumble under the weight of evidence put forward by the industry.

In our changing communications sector, Canadians deserve answers to these questions. We know how industry and consumer points of view differ and how issues of this magnitude need to be treated in a fair and balanced way for the benefit of us all.

I am sure that in many cases the industry is very comforting, but in many others there are differences.

This amendment is intended to increase the quality of public submissions and thus better inform the CRTC of the interest and concern of the public. The goal is to assist the CRTC in making better and informed decisions. The lack of qualitative evidence and the need for this amendment were confirmed by CRTC Chairman David Colville in his testimony to this committee on May 20, 2001.

Who will be funded? Not everyone who appears before the CRTC in a proceeding will automatically qualify for a cost award. With the passage of this amendment, the CRTC will draw the rules of procedure that will be used to determine the criteria for awarding costs under the Broadcasting Act. As with the criteria that already exists in the telecommunication rules of procedure for costs, applicants must demonstrate to the commission that they are representative of a group of citizens, that they have participated in the proceedings in a responsible way and that they have contributed substantially to a better understanding of the issues in question. These are very rigorous tests.

Who pays for these cost awards? The costs are met by companies that come under the jurisdiction of the CRTC, companies that took part in the proceedings and will be affected by the outcome. One of the principles of reimbursement is to compensate deserving intervenors for the costs incurred by an intervention based on the fair market value of the work performed. Like the costs for company representation, the funds come from the key industry intervenor services budget. This procedure will be the same as that already in place under the Telecommunications Act.

In exercising its responsibility under the Broadcasting Act, the CRTC is given decision-making powers that are important for and have a great impact upon Canadians associated with the promotion of Canadian culture, the setting of rates, the introduction of competition and the resolution of stakeholder disputes.

Under section 3(d)(i) of the Broadcasting Act, the commission is instructed to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada. Therefore, the process of decision making is to be congruent with our Canadian principles of fairness and equity, if it is to be so. Hence, it is vital for the process to be conducted on the basis of openness, impartiality and transparency.

This proposed amendment, therefore, affords us the opportunity to translate these principles into functional ones so that the results of wise governance may be delivered effectively in these important regulatory hearings.

Most important, honourable senators, I should like to remind you that the spirit and intent of the bill is fundamental. Its underlying principle rests with the concept that every democratic society should foster active citizen participation in public issues. Modern democratic life requires an active role from the population and needs participation from the members of the community. It should no longer be the case that those who are governed act only to elect, for they are then governed without any opportunity to interact with the governing institutions.

By increasing the participation of public interest groups in CRTC proceedings through Bill S-8, we will render a service to our own institutions, allowing them to make use of valuable information. This was corroborated by Mr. Colville throughout the hearing.

We are also making way for more reasoned decisions and a better understanding of the concerns and aspirations of our society, as well as allowing all parties to work in a cooperative fashion toward possible solutions.

In conclusion, honourable senators, the importance of our undertaking this initiative is to reinstate the process and send it back to the House of Commons after third reading. It is constrained by a 30-day delay, so I would urge you to act as quickly as possible and approve the reinstatement of Bill S-8.

I would remind honourable senators that the Honourable Sheila Copps, the Minister of Canadian Heritage, and the Department of Canadian Heritage support the principles of the bill, which are as follows: first, the growing convergence of telecommunications and broadcasting; second, the increased complexity of broadcasting issues; and third, the desirability of equitable financial support for intervenors in both telecommunications and broadcasting proceedings.

I have copies of this memorandum sent by the minister to the members of the House of Commons, for those of you who might want it. I believe it is here in French and English.

[Translation]

I hope you have a productive session.

[English]

The Chairman: Thank you very much.

Senator Gustafson: Senator Kinsella, who is my boss, may not like what I have to say. At any rate, I have received several letters in the short time that I have been on this committee. At the outset, let me say that I am not familiar with a great deal of the work that the committee has done. However, the Saskatchewan Association of Broadcasters writes me of their concerns, as follows:

The Saskatchewan Association of Broadcasters, representing the vast majority of Saskatchewan's private radio and conventional television services would like to take this opportunity to strenuously express opposition to Bill S-8, An Act to amend the Broadcasting Act, and ask that this matter be considered for three reasons:

1. This approach will bring unintended negative consequences.

I understand from them that they are very pleased with the way the CRTC has already handled things. They feel that other interventions would just complicate the situation and possibly give opportunity for many lawyers to get involved and make some easy money.

The second and third reasons are as follows:

2. There are already two substantive reviews underway.

3. There is nothing on the CRTC's upcoming schedule that merits rushing this issue.

I will hear your response on those matters. Again, I have not studied the bill for the length of time that many around this table have. However, I do have the responsibility of bringing this request before you.

I also have one concern, and that is rural Canada. It is very important, because areas of rural Canada do have fairly good communications, for different reasons. I would not like to see that situation hampered in any way, because we cannot defend ourselves out there the way you can in the bigger centres.

Ms. Finestone: Senator Gustafson, I am very pleased to try to respond to the letter that you have received.

If you were to go back and review the hearings, you would understand that the CRTC has made it eminently clear that it has found the absence of input by the public to be a negative value, not a positive value, and that it looks forward with great interest to the movement forward of this amendment.

It does not have unintended negative consequences. The question of the counter-lobbyist, and that real Canadians will not appear, I would suggest to you is a somewhat wrong argument. This bill is not intended to increase public participation, in the sense of lots and lots of people or lots and lots of lobbyists. It is intended, as I think I said, to increase the quality of the public submissions and thus to better inform the CRTC through the research done at the local level and by consumer groups.

I can tell you that I have a list here somewhere, which I was looking for as you were making your observations, of the groups that have been extremely interested. Just out of Manitoba, for instance, there is the Social Planning Council, the Council of Women of Winnipeg, the Consumer Association of Canada, the Manitoba Society of Seniors, the Disabled Women's Network, the Canadian Cancer Society and the Manitoba Okimakanak Group. They are citizens who represent a broad spectrum of interests in society. Certainly many of them are at home, watching, and who have to pay the price increases or changes, or who were very unhappy when they lost their local community channels. That has been a very serious issue all along. Therefore, I do not think that that is of significance in that sense.

Second, in terms of substantive reviews, over a nine-year period in the House of Commons, I was involved in a review of the Broadcasting Act twice, I believe. It takes a long time to get a review through. This is a substantive change that has been requested for a long time, one that the population really wants. Hence, when the review comes in, a piece of the work will already have been completed. It is an important undertaking and it is most timely.

You talked about the kinds of things that can wait until the next review. Let me give you an idea of some of the proceedings that are coming up. There is the issue of television digital migration, which is ongoing. There is the question as well of deregulation of cable television pricing, which is commencing. The issue of licensing new community programming initiatives is about to commence. There are the issues of ongoing television and radio licence proceedings; of future television policy and broadcasting distribution undertaking regulation reviews; and industry convergence, which is ongoing. There is the question of television programming packaging and tiering issues. The question of cost awards in inside cable television wiring is an issue. There is the question of inside telephone wiring proceedings, which was not available for cable TV.

I can suggest to you that there are many issues that impact each one of us, including our constituents, and we are all at risk without proper, well-informed, well-documented, well-researched information.

The rural areas, I think, are another issue all by itself, one that is very costly. It is costly for the broadcasters, as well. A proper saw-off that is fair for business, industry and the consumer needs to be found.

Senator Gustafson: The best I could do, as I said earlier, not being that knowledgeable about it myself, was to recommend to the Saskatchewan Association of Broadcasters that it carry its requests to the Transport Committee of the House of Commons, and send a witness. That is my case.

Ms. Finestone: Perhaps, sir, you could send them a copy of the proceedings of this committee meeting, to enable them to become more enlightened.

Senator Callbeck: Ms. Finestone, you first introduced this legislation last year as Bill S-7. I am wondering whether you had representation from a number of groups that wanted to intervene and could not because they could not afford to hire experts to help them? Why did this come about?

Ms. Finestone: We had a great deal of correspondence from groups who felt they could not afford to attend or who could not put together the kind of brief they wanted.

There was not an industry group or a public interest group that was counter to this proposal. It was welcomed with a great deal of warmth and interest.

In fact, I have spoken to public groups many times, and there is tremendous interest, in particular, for community broadcasting, community cable to be reinstated, visible minorities, Aboriginal groups and the disabled. There was significant citizen anticipation of the realization that they would be enabled to put their research forward, either to support or to argue the industry's perspective.

Senator Callbeck: The intervenor funding costs will not be paid to these groups until the proceedings are finished.

Ms. Finestone: That is right.

Senator Callbeck: Have they expressed any concern about that?

Ms. Finestone: The only concern I have heard is that they are eager to see this bill become law, and then for the CRTC to move to hearings and setting the criteria, to which public interest groups, as well as industry, would be invited to enable the kind of criteria for value-added to be determined.

Senator Spivak: I have a few questions with respect to cost. What is your reaction to the CBC suggestion that the commission not have authority to make an award so that the CBC would be liable for payment? The Canadian Association of Broadcasters is suggesting that a portion of the broadcasting licence fees should be used to pay this. I certainly support the fact that the CBC should be exempted. Money to them has been cut over the last number of years. The method of payment is key because you do not want to encourage people to appear just because they will get paid for it. You want to have quality representation. I have had a great deal of experience with community groups and representations. You want to ensure that research is done properly.

If the fees were to come from the broadcasting licence fees, that would be a common sense solution. I am wondering what you think.

Ms. Finestone: It is true that there is a fairly large amount of money out of the licence fees to date.

Senator Spivak: Only Part I covers the entire operation of the CRTC, as the Canadian Association of Broadcasters have presented here.

Ms. Finestone: There are two parts — Part 1 and Part II. Revenue goes back to the Minister of Finance or to the general revenues.

I can only say that the decision as to how to set the criteria and the decision as to whether the CBC should be exempted or not are decisions that rest in the hands of the CRTC and would be discussed at those hearings. It is not a decision that could be included in the nature of this bill. The principle and philosophy of allowing cost recovery by public interest groups is what this bill is all about. How to establish the criteria, the value, the expectations and the method of measuring and weighing the amount of money that should be accorded to them rests with the CRTC, not with us.

Senator Spivak: I can see that applied to broadcasting licence fees, perhaps.

Are you saying that we as legislators do not have the power to legislate an amendment that would exempt the CBC, that that is not in order and cannot be done here?

Ms. Finestone: For me, frankly, the CBC should be right in the front line of wanting to hear from the consumers. The CBC belongs to Canadians, and it should hear from Canadians. That is the democratic process.

Senator Spivak: Have not you listened to Rex Murphy or to ``Talkback''?

Ms. Finestone: I like him. He is terrific. I am a CBC fan.

Senator Spivak: I am also.

Ms. Finestone: Whether they should have been exempted, it is the cost of doing business, the term you used. Everything is the cost of doing business.

Senator Spivak: Yes, but they are publicly funded. I appreciate your opinion, but I wonder if we could get a legal opinion as to whether that would be valid, if we indeed wanted to make an amendment of this kind.

The Chairman: It is my understanding that there would be no legal impediment to the kind of amendment that you are describing, because that is not a money bill. We could not initiate a money provision. One of the questions that this committee has to bear in mind is the fate of this bill after it leaves our hands.

This committee is, of course, free to amend the bill. If we do amend the bill, it will not be eligible for the Commons process of reinstatement of matters that were before them before prorogation because they must be the same matters.

Senator Spivak: I understand that.

The Chairman: If we wished to profit from that and we deemed it advisable, then we would have to send them back the same bill, possibly with recommendations.

Senator Spivak: Right.

The Chairman: However, that does not mean that we cannot and will not. That is one of the consequences of amending the bill.

Senator Spivak: The CBC and funding is not a minor matter. I will wait to hear from the CBC people.

The Chairman: Thank you both very much. We are grateful for your time.

We will now hear from the Canadian Association of Broadcasters and the Canadian Cable Television Association. I invite them to join us at the table.

Mr. Glenn O'Farrell, President and Chief Executive Officer, Canadian Association of Broadcasters: Honourable senators, thank you for the opportunity to appear before you and to express the views of over 600 radio, conventional television, specialty, pay and pay-per-view services from coast to coast.

On behalf of our members, the CAB would like to take this opportunity to express our opposition to Bill S-8, to amend the Broadcasting Act, and to ask members of the committee to defeat the bill for three reasons: first, to avoid unintended negative consequences; second, to ensure accountability and transparency; and third, to avoid compromising substantive reviews that are well underway.

I will elaborate on all three of those reasons.

[Translation]

As noted in our May 2001 submission to the Senate Committee on Transport and Communications, while the goal of enhancing public participation in proceedings and hearings on broadcasting policies and the licensing process is a noble one, the evidence shows that this bill would in fact have the opposite effect, not to mention a number of unexpected consequences.

Thus far, proponents of the bill have based their key arguments on the notion of equity. They merely want broadcasting proceedings to be conducted in a manner similar to telecommunications hearings. We run the risk of this in fact happening and of regretting the decision later.

In our opinion, telecommunications proceedings have deteriorated to the point where they have become an extremely legalistic, confrontational process. Witnesses are sworn in and cross-examined and the proceedings are dominated by legal counsel and expert witnesses who cross swords in a contest of sorts.

While providing funding to interveners in telecommunications proceedings may have assisted a handful of lawyers and consultants, it has also created an environment in which the average Canadian feels totally out of place.

Consequently, I invite committee members to examine the transcripts of recent telecommunications proceedings to see who in fact participated in the CRTC hearings. Two of the major policy reviews recently conducted, one on the price cap (CRTC Decision 2002-34) and the other on access to the digital network (CRTC Decision 2002-4) reveal the extent to which the proceedings are dominated by special interest groups. You will also see that the list of witnesses does not include a single ordinary Canadian or group of Canadians.

[English]

The opposite is true of the broadcasting sector, where proceedings enjoy a process that is open, where average Canadians may make representations and where witnesses are not sworn in. There is no cross-examination of witnesses. It is just an opportunity for everyday people to come forward, tell their stories, make their own comments and offer their solutions.

Let us now look at what has happened in recent CRTC hearings on the broadcast side of the equation. Thousands of intervenors have participated in broadcasting policy reviews and specific licence renewals. We have outlined several in our last submission to the Senate committee; however, perhaps a few examples tonight will serve your purposes.

We were talking about the CBC earlier. Its licence renewal heard from over 4,000 intervenors. I am sure the CBC can explain and elaborate on that process, in which 4,000 intervenors put forth their opinions. In the context of licence renewals by both the CTV and Global, a combined number of 4,900 intervenors appeared in both of those processes. Again, that shows to what extent the public has access, and uses that access, freely. One could say that those are big proceedings — the CBC and two major private networks. Smaller proceedings may not have the same scope, scale or order of magnitude. However, at one such hearing of the community channel policy review, there were 700 individual intervenors.

To be clear, we are not here to impede public participation. Rather, we live with it, we work with it and it is a part of the community we enjoy. Therefore, we are here to defend it.

Mr. David Goldstein, Vice-President Government Relations, Canadian Association of Broadcasters: Honourable senators, the second issue is that of accountability and transparency. While licence intervenors must provide detailed financial reports to the CRTC, there are no provisions in Bill S-8 that would set guidelines as to who would be appropriate for funding and under what circumstances or as to accountability of funds used. The bill accedes power to the CRTC. If resources are to be taxed from our members and the CBC for the hiring of lawyers and consultants, then, at the very least, those who are receiving the funds should be required to submit audited financial statements and information on funds received as well as full disclosure of their ownership, membership and corporate governance. These are public dollars and the public has a right to accountability. In an era of increased public pressure on disclosure by the Auditor General and others, funding intervenors should have to stay on the same playing field of disclosure as licensed intervenors.

The third issue, as raised by Senator Gustafson, is that the bill could compromise larger reviews of the Broadcasting Act. The House of Commons Standing Committee on Canadian Heritage is scheduled to report on their exhaustive 18- month study of the broadcasting system at the end of this year. The committee heard from dozens of groups and individuals from coast to coast. These intervenors took this process seriously. They spent a great deal of time preparing thoughtful presentations on the system as a whole to ensure that the government looks at as many issues as possible, in context. We are certain that honourable senators will agree that your colleagues in the other place are involved in a worthy undertaking, and we should not be singling out a single issue such as intervenor funding.

We could understand the rush if there were a pressing issue facing the CRTC in the coming months, but that simply is not the case. Over the last four years, the CRTC has reviewed all of its major policy areas, including radio policy, television policy, new media policy and the digital framework, and has just finished its main licensing hearings for CBC, CTV, Global, TVA, TQS, CHUM and the new digital specialty services. These major policy reviews or licences will not be up for renewal for the next five to six years.

Beyond the House of Commons Canadian Heritage Committee review, Minister Copps has committed to reviewing the equity of CRTC licence fees where broadcast undertakings are already paying upwards of $90 million annually above and beyond the cost of running the CRTC and the management of spectrum. These resources are not being channelled to Canadian programming or to support our members' local efforts in their communities. Additional taxing and resources, such as those proposed in Bill S-8, would only exacerbate the problem. Again, we strongly believe that it is inappropriate to look at issues on a micro level, or in a piecemeal way, while these two substantial reviews are taking place.

Mr. O'Farrell: In conclusion, the notion of increasing public participation in the broadcasting policy-making process is indeed an important virtue. We would sincerely hope that the issue deserves broader consideration. While we do not deny that the bill was borne of good intentions, it would most certainly result in flawed public policy. We have history to guide us on the telecom side. We hope that honourable senators will not allow the current bill to go forward in haste. There is no reason for haste.

The ramifications could tax important resources away from our support of Canadian programming and the commitment we make to our local communities. While there are those who have argued that this bill has already received full study in the Senate, it is clear that your colleagues in the House unearthed several important and controversial issues that were unresolved because the committee ran out of time to study the bill.

In our view, if creating real increased public participation is the goal, Parliament has the capacity to take a step back, study several options and make recommendations to the Minister of Canadian Heritage, which would be far more likely to become part of a comprehensive set of amendments to the Broadcasting Act. That said, if Bill S-8 is allowed to move forward, it should not give the CRTC carte blanche. It must be amended to include clear guidelines that would include the following: First, ensure that broadcasting proceedings at the CRTC will not devolve into legalistic, conflictual proceedings that disenfranchise ordinary Canadians from participating on a meaningful basis; second, an amendment would have to set parameters on who can apply for funding and for what kind of proceedings, and have established guidelines for funding caps; and third, the amendments should set guidelines for accountability and transparent disclosure for organizations and individuals who would accept intervenor funding. Perhaps, most important, amendments should also create an explicit exemption for small broadcasters who do not have the wherewithal to support additional onerous obligations. Furthermore, the bill should be amended to include a bringing- into-force clause that would hold off assent until such time as the government can look comprehensively and respond to all of the recommendations in the Broadcasting Act review and the minister can conclude the review of equity in CRTC licence fees. For each of these amendments, we would be happy to submit texts of draft language, although we do not have that here this evening.

On behalf of the CAB's 600 members from coast to coast, we thank you for this opportunity and we look forward to your questions.

Ms. Elizabeth Roscoe, Senior Vice-President, External Affairs, Canadian Cable Television Association: Honourable senators, we had the pleasure of appearing before your committee when this bill was entitled Bill S-7. We truly appreciate the opportunity to reappear. We have circulated our brief in English and French and hope that you will find it useful as you consider this issue.

By way of introduction, CCTA is the national industry association of the cable television industry. We represent 800 federally licensed cable systems that collectively provide communication services to Canadians, serving more than 6 million residences and over 500,000 commercial customers from coast to coast.

Cable television services that our companies offer are governed by CRTC regulation. We have a great interest in this proposed legislation. The licences that our companies hold, the renewals they are granted, the service offerings they provide are all approved and authorized by the CRTC. Throughout our dealings with the CRTC, we are involved in public hearings, public notices and public meetings. The consumers, stakeholders and, indeed, the media have ample opportunity to research the record and to forward their views.

Our colleagues from the CAB have well put before you the various hearings that have transpired and the public intervenors that are on record. However, we should like to speak to the objective of the proposed amendment to the act to encourage public participation and provide funding for public interest groups.

The mechanism put forth by the proposed legislation would provide such groups with the necessary funding to take a more active part in CRTC proceedings in the broadcast sector by allowing them to conduct more detailed research to support their interventions. While we are in agreement with the principle of public involvement in broadcast proceedings, our members appreciate that some form and some mechanism of funding need to be identified to support this involvement. We do not agree with the mechanism that is identified in the proposed amendment that would see the interested parties taxed, in essence, and we are not clear on how that tax would actually be awarded. We believe there is a better alternative, that is, to provide stable funding in advance for public interest groups, thereby allowing a reallocation from existing resources rather than the imposition of an additional charge to our member companies.

As Senator Spivak mentioned, under CRTC regulation, broadcast distribution undertakings are required to pay fees for their licences. The fees are intended to cover the costs of regulating the industry. Broadcasting licence fees have the two components as mentioned, Part I and Part II fees. I think that it is on record what the two stand for. We will not need to go through that.

Just by way of clarity, though, in 2001, cable companies paid approximately $12 million in Part I licence fees and $48 million in Part II licence fees, both sizable amounts. In total, the broadcasting industry contributed over $20 million in 2001 in Part I licence fees to the commission and $91 million in Part II licence fees to the consolidated revenue fund.

Since the two components of the broadcast licence fees more than cover the cost of the CRTC operations, we propose that a small cost reallocation of the Part II licence fees would be appropriate to finance the intervenor funding that is being discussed through this legislation. Such a reallocation could be established annually, allowing intervenors to apply and to seek prior approval for their research program.

We see prior approval of funding as a critical improvement to the mechanism outlined in the draft legislation, which contemplates reimbursing intervenors after they have spent the research money. Therefore, we would request that this committee not allow the adoption of the bill until resolution of how the intervenor funding would be managed and is clear to all parties. As honourable senators will appreciate, private-sector companies would request that notification on how any intervenor funding will be put into operation. They would rather know in advance than after the fact.

Second, we should like to lend our support for an amendment to allow a small system exemption, not only for small broadcasters, but also for small cable systems in communities such as Senator Gustafson has mentioned, where rural and small operations are under significant financial strain in a very competitive and in a very changing marketplace.

Our companies believe that the government should be able to achieve its public policy objective of including public groups in CRTC proceedings through the reallocation of existing resources.

We thank you for the opportunity to appear before you, and we welcome your questions.

Senator Day: You have heard the comments from Senator Kinsella and Ms. Finestone. They were trying to convince us that the right to provide funding to intervenors under the Telecommunications Act is there and that in order to create the proper balance it should be under the Broadcasting Act. As I understand their comments, it is not working as well as some people may think it is on the telecommunications side and the indirect effects of that in terms of who the intervenors are, et cetera, and two wrongs do not make a right. One is already there, but that does not necessarily mean that the next one should happen. Am I interpreting your comments correctly?

Mr. O'Farrell: Senator, I think that is fair. You have characterized them exactly as we intended them.

We believe there is somewhat of a lesson one can look at on the telecom side in terms of how the system has evolved and what it has produced in terms of results. What we are seeing today is a telecom system where hearings are extremely legalistic in their nature. They are very conflictual. You would not want to be cross-examined in a telecom hearing unless you had a lot of time on your hands and were prepared to take a lot of preparation, because they are very demanding.

We state that because on the broadcasting side we have seen another system completely evolve, one where I would say to you that I cannot think of very many other fora in Canada that have the kind of activism present in public proceedings as we see in broadcast hearings under the CRTC's watch.

I was in the industry before coming to this job and participated in numerous public hearings where vast numbers of people would come from a variety of stations. I recall, for instance, a licence renewal hearing for CKVU in Vancouver where someone filed an intervention and asked to appear. The person appeared at the hearing and was the first intervenor on the list of many. The intervenor's point simply was this: ``I do not like to have to submit my complaints or comments to an ivory tower in Hull, Quebec. Why are they not closer to me? Why is the CRTC not something I can feel and touch?'' That individual felt that that point of view was important to bring forward. The intervenor brought it forward in a very colloquial way. For whatever it brought in the way of impact, that person's voice was heard. That never would happen on the telecom side, not with intervenor funding or any other mechanism that we can think of.

Just to finish on that, we applaud the way the commission has allowed this rather informal, casual but, frankly, very transparent and open access system to evolve into what we have today on the broadcasting side.

Senator Day: Ms. Roscoe, I have been sitting here trying to think where the money would come from. My thoughts went like this: ``Maybe the broadcaster would have to reduce service. That might be one of the places where the funds would come from. Perhaps the subscriber would have to start paying a higher fee in order to generate these funds. Maybe there would be less money for shareholder.'' Am I right in that regard? Where else would the funds come from? They would have to come from somewhere.

Ms. Roscoe: Mr. O'Farrell may have a comment on this as well. We know that the funds must come from somewhere. As we mentioned, we already contribute quite sizable amounts to the government, not only to run the CRTC but also to the Government of Canada for use of public spectrum.

Our proposal would see an allocation from the licence fees that we pay toward intervenor funding. That is one area that could certainly be identified. I am certain that if the CRTC were tasked with the job of how they would set aside some research dollars that they could then allocate to registered parties for various issues with which they deal work, whether it is on digital television or on digital networks or in satellite, they could make a decision of whether that would be an appropriate utilization of public monies.

In response to your analysis that it must come from somewhere, our member companies are of the view that they are already paying a fairly significant amount of money.

Senator Day: The CRTC, at this time, would not have the authority to access the Part II dollars that go into consolidated revenue. Is that correct?

Ms. Roscoe: It is, as we understand it. They certainly do the authority to access the Part I licence fees, for which our collective member companies pay more than what is actually spent under the broadcasting operations, as we understand it.

Senator Day: Was that the $20 million?

Ms. Roscoe: That is correct.

Senator Callbeck: Mr. O'Farrell, you do not support this legislation. Do you feel there is adequate public participation now?

Mr. O'Farrell: Senator, I find it awkward to not support something on a personal level that is an initiative of former Senator Finestone, who is a personal friend and someone whom I hold in high esteem. We happen not to share the same view on this particular issue. I do believe that if one were to take any segment of time and look, hearing by hearing, in areas and regions across the country, note the number of intervening parties per application and add them up, one would find that there is a fairly good representative body of voices being heard on the applications.

For example, there is a hearing going on in Kitchener, Ontario, this week for new radio licences. If you were to look at the agenda for that hearing and went to other hearings and you assembled all that information, I think, at the end of the day, you would find that not only are they heard, but action is taken. I will give you an example. A very powerful lobby on behalf of the hearing impaired emerged in the 1980s and 1990s in Canada. Overnight, broadcasters in all communities were forced to take very real notice of a new issue on the radar, which was how do we closed caption programming for these audiences?

The new issue on the radar is descriptive video for people who are vision-impaired. On the public policy agenda, the commission is addressing the whole issue of how to ensure programming that incorporates descriptive video components to allow that segment of the audience to enjoy programming. That flows, senator, from a very activist, accessible and open process. Otherwise, those voices would not be heard or be taken seriously over time and they have been.

Senator Callbeck: In other words, you feel there is adequate public participation.

Mr. O'Farrell: I would not say it is perfect, I would never say that. I believe the commission must be applauded for the various chairpersons who have encouraged public participation. They have held round tables across the country. When they did their television policy review, they went market to market. I forget the number of cities where they had town hall meetings for which you did not have to file a letter. You just had to voice an opinion. Commissioners of the CRTC sat there, hour after hour, absorbing all of this with people taking notes. We do not have a perfect system by any stretch of the imagination, but it is certainly one that has served the purpose of public consultation reasonably well.

Senator Callbeck: Ms. Roscoe, you agree with the principle of the bill. Your concern was with the funding. Do I take from that that you feel there is not adequate public participation?

Ms. Roscoe: You may take from that that we always welcome more participation. We know, for example, that the issues that Ms. Finestone raised, whether in regard to convergence policy, digital television, or the licensing of new entrants into the market, are weighty public policy issues. Rather than saying that we do not welcome that public participation, we are saying it is absolutely welcome. We do not agree with the mechanism of this bill.

The Chairman: I have a clarification question for Mr. O'Farrell in regard to numbers. When you say that there were 4,900 intervenors for CTV-Global, what does that mean? Surely that does not mean that there were 4,900 individuals who appeared before the CRTC to make presentations. What does it mean?

Mr. O'Farrell: It means that in the context of the two processes that were conducted by the commission to renew the licences of the CTV group and the Global television group, a combined total of 4,900 groups, individuals and associations submitted positions to the commission and the public process. Many of these would have requested to appear; others would not have requested to appear. The hearing process combines both appearing and non-appearing intervenors. In total, those two groups combined to 4,900 for CTV and Global in the last licence renewal.

The Chairman: Have you done any analysis, even rough analysis, of the proportion of those people who might reasonably be expected to apply for funding, if funding were to be available? For example, the gentleman who said ``I wish I did not have to communicate with someone in Hull'' might not apply for funding, or might not get it if he did apply. Presumably, others would. Consumer associations presumably would apply. Have you done any breakdown of that?

Mr. O'Farrell: We have not done, per se, the kind of analysis where, based on historical record, we have looked at intervenors who have participated in public processes and said, ``Of that group, this subset would be entitled to funding and this would not.'' We have not done that. As a matter of interest to honourable senators, when one intervenes in a process on either the telecom side or the broadcasting side, there are rules of procedure. To give you a sense of what accessibility barriers there are between telecom and broadcasting, as it currently exists, the broadcasting rules of procedure are a total of 10 pages in this handbook. The telecom rules of procedure are close to 40 pages, because of the kind of system that has evolved in that industry's regulation.

What we ask is this: Is the concept of more participation good? Who could possibly object to that? Can it be conducted in a way based on the history that we find on the telecom side, where more everyday Canadians have access to the process? That is not the experience of the history at this point of time. We believe when we look at the record from a broadcasting perspective, it has been a very open process. It is not perfect and we do not suggest that in the least.

The Chairman: I wish to thank all four of our witnesses so far this evening.

[Translation]

We will now hear from CBC officials. We welcome Mr. Michel Tremblay, Vice-President, Strategy and Business Development, Ms. Edith Cody-Rice, Senior Legal Counsel and Mr. Shaun Poulter, Project Manager, Government Relations.

Mr. Michel Tremblay, Vice-President, Strategy and Business Development, Canadian Broadcasting Corporation: Madam Chair, distinguished members of the committee, thank you for inviting me to address the committee on behalf of the CBC on the subject of Bill S-8, to Amend the Broadcasting Act.

I am the Vice-President of Strategy and Business Development at the CBC. With me this evening are Ms. Edith Cody-Rice, Senior Legal Counsel and Mr. Shaun Poulter from our Government Relations Group.

As you know, we testified before your committee last year. At the time, we indicated that while we supported Bill S- 7, as it was then called, we were concerned about the bill's economic impact on the CBC and on the service it provides to Canadians.

You have read the testimony presented at that time and I would be happy to discuss it further with you. Let me review the highlights of our presentation and the arguments raised.

The CRTC receives more public interventions from the CBC than from any other broadcaster. Most recently during its 1999 licence renewal process, more than 4,000 interventions were submitted to the CRTC by Canadians from coast to coast. At the time, over 600 interveners spoke at CRTC public consultations held in 11 cities. The process culminated with public hearings lasting nearly three weeks during which over 65 different consumer and broadcasting groups addressed the CRTC.

We pointed out at the time that CRTC proceedings under the Telecommunications Act were substantially different from hearings under the Broadcasting Act, which makes it difficult to assess cost awards. Mr. O'Farrell has already highlighted the basic differences between the two processes.

Our position is that this bill would have a negative impact on the CBC and on the services the corporation provides. The fundamental issue is this: Should public funds in the CBC's budget be used to finance participation in public proceedings? The committee appreciated our concerns about the bill's impact on the CBC and called upon the government to consider various solutions.

Unfortunately, the government was unable to arrive at a solution. That is why we have come here today to urge the Committee to amend Bill S-8.

[English]

In its appendix to the fourth report on Bill S-7, on June 5 last year, this committee noted:

While CBC fully supports the principle of increased public participation, it is, nevertheless, apprehensive about additional costs whose values cannot be anticipated at the present time.

Although allocation of funds to cover intervenors cost awards is not a task of this Committee, the Committee recommends that the Government examine mechanisms that would address this concern.

At the Standing Committee on Canadian Heritage last May, John Harvard, the sponsor of the bill, proposed an amendment to exempt broadcast licensees who are not required to pay licence fees under the broadcasting licence fee regulations of the CRTC. This amendment would have had the effect of exempting CBC, other public broadcasters, as well as small broadcasters, from being assessed intervenor costs. Unfortunately, on the advice of a House of Commons procedural clerk, the chair ruled that any amendments to add exemptions were inadmissible because there was no provision for an exemption already in the bill.

As a reflection of their concerns over Bill S-7, the Canadian Heritage Committee asked the House of Commons for an extension of 30 days to allow it to complete its consideration of the bill. That request failed to receive unanimous consent.

Finally, to make a long story short, Parliament prorogued on September 16 and that bill died on the Order Paper.

I should like to go back to our position. As we have said, we support efforts to enhance public participation. However, the issue of who would pay the cost of awards must be resolved. We must go beyond the principle and address the mechanism. We strongly feel that CBC public funding should not be used for that purpose.

[Translation]

As mentioned, we support efforts to enhance public participation, but the issue of who would pay the costs of awards must be resolved. We sincerely feel that the funds awarded to the CBC should not be used for this purpose, but rather for programming.

That is why we believe the committee has a responsibility to address the CBC's concerns, concerns that the committee itself voiced when the bill was tabled in the House of Commons. We strongly urge the committee to consider amending Bill S-8 to exempt the CBC from having to pay for cost awards.

We recommend the addition of clause 9.1(3) which would reads as follows:

9.1(3) The Commission shall not be authorized to award costs in connection with clauses 9.1(1) or 9.1(2) if this obligates the CBC to pay said cost awards.

If you wish, we would be happy to table a copy of the proposed amendment.

An amendment along these lines would provide the CBC with some assurances of the impact Bill S-8 is likely to have on the corporation and the services it provides to Canadians.

Again, thank for giving us this opportunity to make our views know to you today. I would, however, like to stress one important point. When you consider the last extensive round of public hearings on the CBC's licence renewal, you will note that the hearings drew 4,000 interventions. The absence of cost awards did not deter people from being heard. You can well imagine that if the CBC had had to award costs to a substantial number of interveners, the tab could have been quite high. At a time when resources are hard to come by, we are literally scraping the bottle of the barrel to come up with programming funds. Funds redirected elsewhere mean fewer dollars available for programming.

That concludes our presentation. We would be happy to answer your questions at this time.

The Chairman: Thank you very much. Before we go to questions, I would just like to say how very much we appreciate your coming on such short notice. As I explained earlier, our intent in so doing was to abide by House procedures, not to predetermine the outcome. We appreciate your making yourselves available.

Senator Day: Could the CBC be exempted in the bill from the criteria set out by the CRTC?

Mr. Tremblay: That would be possible, but in truth, we would like to have some assurances of this as soon as the legislative amendment is passed and some criteria are set down, not only to cover our particular situation, but others as well. We do not now have any such assurances if we must rely on a process which may or may not result in guidelines that are acceptable to us.

Ms. Edith Cody-Rice, Senior Legal Counsel, Canadian Broadcasting Corporation: If the government does not make it clear that the CBC is exempted, then the CRTC will not say to the CBC that it considers it to be any different from other broadcasters, because Parliament has not deemed this to be the case. There is very little likelihood that the CBC would be exempted from this CRTC process because people are the ones responsible for drafting laws.

[English]

Senator Day: If public broadcasting is in the public interest and is funded by the public purse, is not increased public participation in the licensing process another equally important public issue that should be funded in some manner?

Mr. Tremblay: I agree entirely with you that we should find whatever way to increase public participation. However, I must say that we ought not to look only at the CRTC process as a means for us to reach out to Canadians. As you are well aware, we constantly have town hall meetings, we have open line shows, we have 1-800 numbers; Canadians have a hundred different ways to reach out to us and present their views. We must adjust as a broadcaster. It would be foolish for us not to hear Canadians and react to their proposals.

Our contact with the Canadian public does not stop with the CRTC hearings. With respect to the last major process that dealt with the CBC licence renewal, I have no indication whatsoever that the lack of cost award has deterred people from participating. It is easier for people to participate. A lot of those interventions are filed on the Internet. One can do more than send mail. The CRTC has taken it upon itself to reach out to Canadians and go across the country and into the communities to get those views. It was a very thorough process. I do not think there is any indication that there was an absence of dialogue with the interested parties at that time.

Senator Day: If you could be assured that in your annual funding to CBC you would be able to get the funds, and if you participated like all the other broadcasters, and if this became law and you could be guaranteed that any funds that CBC was required to pay out to intervenors you would get back as part of the funding, would you be content to participate in this scheme? Is it your concern that you might not get those funds that is really causing you to resist this?

Mr. Tremblay: Yes, indeed. I think we do not want to assume any risk on that front. If at the end of the day there was a rock-solid commitment that we could get this money back somehow, I think that, no, we want this to be revenue neutral to the CBC because we have pledged not to reinvest any new dollars that flow to the CBC into the programming. We have been blessed now with two years where government really believes in the role we play in the system, and it has invested $60 million dollars, and we have committed to reinvest all of that money into programming two years in a row. I think that, no, we do not want to lose our focus.

If at the end of the day there can be other ways found where there is a guarantee that we will not have a financial hit, we do not disagree with the idea, just with the fact that our programming could suffer.

The Chairman: Let me ask you the same question I asked the CAB. Have you done any analysis at all, however rough, however high level, of the proportion of intervenors that you think would be likely to apply for and receive funding if a bill like this became law and applied to you?

Mr. Tremblay: We have not carried out specific analysis. On the other hand, we have done some research and looked at some empirical evidence flowing from the telecom experience. We found out that the range of cost awards is broad, from $172 to $305,000. There are no ceilings in that area. It is the CRTC's discretion of what the criteria is. I think it is really open-ended. It would be very difficult for us to determine whether a particular group of intervenors might not go the extra mile and request no consulting work be done. I think it is very difficult to assess.

Currently, and in the past, intervenors have relied on their own means to do so, and I do not believe that the public process has suffered.

The Chairman: I see. It is a leap of faith.

Senator Johnson: Hearing from Canadians is laudable. However, convergence seems less certain compared to when Bill S-7 was before us in terms of telecommunication and broadcasting. Does this not weaken the argument for Bill S-8 in terms of how it is now unamended?

Given what is going on in the Department of Heritage, what is going on in the CBC with all the programs and other things that are delivered in terms of services to Canadians to interact with the CBC, which I am very active in, as well, I am at a loss to know what this is going to accomplish.

Mr. Tremblay: On the issue of convergence, we are trying to justify such an amendment because both initiatives are converging. The recent economic climate and the benefits of convergence have been very hard to realize. Many companies have begun to divest many of the companies they have acquired during the great period of consolidation. Hence, I would suggest that the telecom industry remains quite fundamentally different to the broadcasting sector. I do not think that we have really made major forays in terms of moving toward convergence. I do not think this ought to be the ultimate criteria.

I guess I would echo the views put forward by Mr. O'Farrell. The fact that you have cost awards on the telecom side has also removed the ordinary citizen from the table with the CRTC where the broadcasting side has always been extremely informal and forthcoming for the ordinary Canadian. I think the telecom side is persona non-grata. They cannot represent themselves easily in the process. I think we have to be careful about the effect of the level of participation of Canadians.

Senator Johnson: Yes. I totally agree with that because how many people would actually have taken in this process even if it were in effect? How many are doing it now in terms of the CRTC proceedings or telecommunications on an individual basis? I do not know the numbers. Thank you for that.

Is there anything the CBC would suggest? I have got your position here. There are a number of points. You cannot support it as it is. Is there anyway that you could?

Mr. Tremblay: I think what would give us comfort is if the legislature were to indicate the criteria, their vision as to how such an amendment would be implemented. This would go a long way toward reassuring both us and other players in the system.

At the end of the day, everybody agrees that we are not here to curtail public participation; however, I think we have to think through the net effect. It is true that this would have a financial impact, which is at this point highly unpredictable.

Senator Gustafson: Are you suggesting an exemption for the CBC, Mr. Tremblay?

Mr. Tremblay: Yes.

Senator Gustafson: How would that work with CTV and other interests? It appears to me that that would be a direct bias on the bill.

Mr. Tremblay: If you call it a bias, it is a bias. We are funded through public funds. The fundamental question is: Should we be refunnelling those tax dollars into paying for public participation? That is the fundamental argument. I think that we have been enjoying reduced funding over the last several years, and I would say we are scrambling to offer distinctive programming of high quality that is very costly. Hence, any dollars taken away from our budget, I think, has a net impact.

Ms. Cody-Rice: We are an instrument of public policy, and that is our position in the Broadcasting Act. Where the private broadcasters are subject to many regulations and they are regulated by the CRTC, but they are permitted to make a profit for their shareholders in a way that, we are not. Our shareholders are the Canadian people and all of our funds go back into programming.

The Chairman: Thank you all very much indeed, and I thank you, again, for attending here with so little notice. It was very important for us to hear from the CBC, and we do appreciate it.

Honourable senators, before we proceed to clause-by-clause examination of the bill, perhaps we can take a few minutes for general discussion to see how senators feel at this point. Senator Kinsella, you are the sponsor of the bill. Would you like to say a few words?

Senator Kinsella: Honourable senators, I thank colleagues for the good questions that were put to the witnesses. Perhaps the crux of the problem we have at present is around the issue of where an amendment to the bill would be best considered. It is a procedural bind that we find ourselves in, in some sense. The rules in the House of Commons are different. The fact of the matter is that they are not finished with their deliberations on the bill. An amendment at third reading is available to them. Frankly, if an amendment is to be considered, they will have the advantage of the hearing of this committee to know what the argument for an amendment could be. If we amend this bill, then a new message goes to the House of Commons with a different bill. It is not picked up where it was left at the time of prorogation. I would recommend that we leave the opportunity for the bill to be where it is at and that the members in the other place adjudicate on whether an amendment should be made at third reading.

Senator Spivak: Honourable senators, I am uncomfortable with the situation as it is. I certainly supported this the last time, when Ms. Finestone was at the table. However, I am uncomfortable with the CBC's position and with some of the questions raised. Doubts have been raised in my mind.

This has been a very quick proceeding. I have not had time for my position to gel. Therefore, I cannot support the bill in its present form. I must say that. I would like to. However, we cannot be sure that there will be an amendment at third reading. On the other hand, I do not want to make an amendment that, if passed, will effectively kill the bill or not let the bill go forth. I will not support it at this point in time.

The Chairman: Parliamentary life is difficult.

Senator Spivak: It is. We have to make decisions, and that is my decision.

Senator Day: Honourable senators, I believe we are all saying the same thing in terms of process. However, I wish to make it clear in my mind that the reason Senator Kinsella is saying ``third reading'' is because of the special procedure in the other place. If we do everything — meet the time limits, do not make any amendment — it arrives back there and is re-presented. Because there was not agreement at committee stage, it will be deemed to be at report stage. Even though there were questions and even though there was unease in the committee and people wanted to make some changes, they cannot now because of their own procedure. They are caught in their own procedure, and the only way that an amendment can be made in the House of Commons now would be at third reading. Is that correct?

The Chairman: It could certainly be amended at third reading. However, I do not know enough about House of Commons procedure to know whether, having reinstated it at its former stage, they could then refer the thing back to committee.

Senator Day: Perhaps we should clarify this. The logical thing would be for this to go back to the House of Commons committee, because there are people who have different points of view. My understanding is that because of the peculiarity of this prorogation and revival, it would be at report stage and the committee cannot reconsider it.

Senator Spivak: We should know that.

The Chairman: Honourable senators, the issue we must consider when thinking about House of Commons procedure is one step before that. Do we think this bill is worth getting back into the reinstatement process or not? It is clear that the bill can be amended in the Commons by whatever means. If we were to amend it ourselves and thereby have it go back to square one in the House of Commons, it is much less clear that it would see the light of day ever again, as we know. They will be very busy over there this year. Perhaps that is the first thing. Before we delve into House of Commons rules, we really need to think about which process we would like to engage in the Commons.

Senator Day: I understand your point, Madam Chair, but with respect, I think Senator Kinsella was talking about the right place to amend. Amending at third reading in the full House is not a very desirable process. The place to deal with this would be in committee. The point I wanted to make is that my understanding is that if we do everything and get it over to them, they cannot take it into committee again.

Senator Spivak: Why can they not send it back to committee? We are shirking our responsibility to deal with the bill properly. I should not say ``our,'' I should say ``my.'' Doubts have been raised in my mind, and I have not had time to examine this issue properly. That may not be the case for other honourable senators. I am saying that it is preferable in this house to settle the issue the way we want to settle it and not shift the issue to the House of Commons.

Senator Johnson: That is in an ideal world.

Senator Spivak: That is in an ideal world.

The Chairman: Another element we have not discussed is that, when Bill S-7 went through this committee, the committee attached observations, basically a recommendation. I do not believe that a stiffer set of observations would invalidate the status of the bill because the bill would remain. That is perhaps another element to consider.

Senator Spivak: I do not think you can make a recommendation to the House of Commons, ``Please amend this bill at third reading.'' Can you do that?

The Chairman: The recommendation was to the government, as I recall. We can look up the text.

Senator Spivak: That is not what we want.

Senator Gustafson: We only have two options. The first is to kill the bill. If we amend it, we kill the bill. The second is to send it back to them and let them deal with it. There is really not much to discuss here.

Senator Phalen: I am somewhat new to this process. I was not here when the bill was discussed last time. When I came in tonight, I was prepared to support the bill. In supporting the bill, I was prepared to support the committee that passed the bill. That was my position. After listening to the presenters tonight, I cannot support the amendment. I have a real problem. I do not know how it got through, having listened to the views of the people here tonight. I do not understand it. I simply cannot support it.

Senator Callbeck: Madam Chair, last time we heard from many witnesses who supported the bill. Tonight, we did not. We heard from the CRTC, and they indicated they did not think this would have a big financial impact on the CBC.

Senator Johnson: What was the financial impact they said it would have?

Senator Callbeck: They did not.

Senator Johnson: Has anyone had any idea about that? They said it would be a significant financial impact. It would affect their programming significantly.

Senator Spivak: I would suggest that we do our clause-by-clause examination next week. We could look at what might be some of the concerns and think it over.

The Chairman: If we do that, Senator Spivak, we miss the reinstatement time.

Senator Spivak: I did not know that.

The Chairman: That is the only reason we are going through all this procedure today. It is unfortunate that we cannot change their rules. We are not bound by their rules but we cannot change their rules. They are a fact, those rules.

Senator Callbeck: Madam Chair, I am wondering about the observations.

The Chairman: Would you like me to read them?

Senator Callbeck: Yes, please.

The Chairman: The last time out, these were the observations:

The Committee endorses the content and philosophy of this Bill — that is, Bill S-7 is designed to further and improve public participation in Broadcasting hearings by means of interveners awards.

During the Committee's hearings, representatives from the CBC/Radio-Canada expressed their concern about cost awards. While CBC fully supports the principle of increased public participation it is, nevertheless, apprehensive about additional costs whose values cannot be anticipated at the present time.

Although allocation of funds to cover interveners cost awards is not a task of this Committee, the Committee recommends that the Government examine mechanisms that would address this concern.

Senator Spivak: Too vague.

The Chairman: That is what we said last time.

Senator Spivak: Very vague.

Senator Day: I was beginning to like Senator Spivak's suggestion. Unfortunately, the procedure in the other place is back on the table, which we are trying to say we should not pay any attention to and should do what we are doing. Now we are saying we have to do this now because of their rules.

Can you tell us how much time we have and what would happen if it goes through the process again? Would they have to go through the lottery because it is a private bill?

The Chairman: First, the timetable. Our best information is this: Because there is a break week that we also have to juggle with and because procedures in the House of Commons tend to be more cumbersome than ours once they get a bill from us, we would have to have it over there on Tuesday next, November 5, if we wanted the bill to benefit from the reinstatement provision of their rules.

If we missed our deadlines, or if we amended the bill so that it became a different bill, it would then return to the normal process. There has been some dispute over what happens when the Senate passes a private member's bill originating in the Senate. Is it a Senate bill — that is, the Senate's position — or is it still a private member's bill? The Commons often is of the view that it is a private member's bill like theirs. We, on the other hand, have held very firmly that once it has been passed by the Senate it is a Senate bill and does not go into any lottery, gets considered by the Senate, by the House of Commons in the same way that we consider any private member's bill that makes it is through their procedure and becomes a Commons bill. The bill would get onto the Order Paper, it would not have to go through the lottery; however, how far it would get after that is an entirely different question. There are many bills that do not make it through the process in the House of Commons.

If I said anything inaccurate, please correct me.

Senator Kinsella: I believe the observations made by this committee when it last considered Bill S-7 are as valid today as when they were made before. Should we adopt the bill at clause-by-clause study? I certainly would support having those observations attached to the report.

Senator Spivak: I disagree.

Senator Johnson: I disagree.

Senator Spivak: I disagree quite strongly. If we have observations, we should say clearly in those observations what we mean — that is, if we agree; I do not know what the feelings of honourable senators are — that is, that the CBC should be exempt and that we would hope that that is what would happen. Otherwise, we are shifting around the issue and it is not acceptable to me.

The Chairman: I would suggest that it is perfectly possible to redraft observations, but perhaps we have made, most of us, the points that we wish to make and perhaps we should proceed with voting and see how that goes. Is it agreed, honourable senators?

Honourable senators, is it agreed that the committee proceed to clause-by-clause consideration of Bill S-8, to amend the Broadcasting Act?

Hon. Senators: Agreed.

The Chairman: Is it agreed that the title stand postponed?

Hon. Senators: Agreed.

The Chairman: Shall clause 1 carry?

Some Hon. Senators: Yes.

Some Hon. Senators: No.

The Chairman: On division.

Shall clause 2 carry?

Some Hon. Senators: Yes.

Some Hon. Senators: No.

The Chairman: On division.

Have we an amendment?

Hon. Senators: No.

The Chairman: Shall the title carry?

Some Hon. Senators: Yes.

Some Hon. Senators: No.

The Chairman: On division.

Shall the bill carry?

Some Hon. Senators: Yes.

Some Hon. Senators: No.

Senator Spivak: Have you counted who said no and who said yes?

The Chairman: I did while we were going through. Do you want us to do a roll call vote? Nobody is calling for a roll call vote. It is my impression that the bill carried, on division.

Senator Gustafson: I want it recorded that I abstained.

The Chairman: Senator Gustafson abstained. Let the minutes so show.

Senator Day: I want it reported that I voted against.

The Chairman: I think at this point we are going to a roll call vote.

Senator Day: I do not feel comfortable voting for it. More time is what I would like.

The Clerk: Honourable Senator Fraser.

The Chairman: Agreed.

The Clerk: Honourable Senator Adams.

Senator Adams: Agreed.

The Clerk: Honourable Senator Callbeck.

Senator Callbeck: Agreed.

The Clerk: Honourable Senator Day.

Senator Day: No.

The Clerk: Honourable Senator Gustafson.

Senator Gustafson: Abstain.

The Clerk: Honourable Senator Kinsella.

Senator Kinsella: Agreed.

The Clerk: Honourable Senator Johnson.

Senator Johnson: No.

The Clerk: Honourable Senator Phalen.

Senator Phalen: Opposed.

The Clerk: Honourable Senator Spivak.

Senator Spivak: No.

The Clerk: Yeas 4, nays 4, abstentions 1.

The Chairman: It is a tie vote. A tie vote fails in the Senate.

Thank you for your deliberations.

Honourable senators, what do we do now? Do you wish to resume consideration of this matter?

Senator Spivak: Do you think we should amend the bill? I do not know.

The Chairman: At this point, since we will not make the House of Commons timetable, we should all go away and think, and perhaps if senators on the respective sides would tell their representatives on the steering committee how they feel, the steering committee will review this matter next week and we will get back to you all about next steps.

Thank you for your long patience. We will be in touch.

The committee adjourned.