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Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 7 - Evidence - April 29, 2003


OTTAWA, Tuesday, April 29, 2003

The Standing Senate Committee on Transport and Communications met this day at 9:33 a.m. to examine the current state of Canadian media industries; emerging trends and developments in these industries; the media's role, rights, and responsibilities in Canadian society; and current and appropriate future policies relating thereto.

Senator Joan Fraser (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, I would like to welcome our witnesses as this committee begins its study of the state of Canadian news media.

Before introducing our first distinguished witness, Mr. Tom Kent, I would like to take a few moments to outline the goals of this study. The committee intends to examine the appropriate role of public policy in helping to ensure that the Canadian news media remain healthy, independent and diverse, particularly given the tremendous changes that have occurred in the field in recent years. There have been transformations such as globalization, technological changes, convergence and increased concentration of ownership.

[Translation]

Thirty-two years ago, the Special Senate Committee on Mass Media chaired by our retired colleague Senator Keith Davey published a remarkable report on the media in this country. The committee conducted a comprehensive review during which members had an opportunity to evaluate the importance of the delicate and complex role played by the media in Canadian society. From that moment forward, the media became the focus of considerable attention in Canada.

In 1981, the Royal Commission on Newspapers tabled its report. We are pleased to have the Commissioner here with us today. In 1986, a task force focused on various problems within the broadcasting industry and the co-chairs of the task force will be joining us here on Thursday.

Recently, a Quebec commission chaired by Ms. Armande Saint-Jean wrapped up a study of the news media.

[English]

Parliament has also been active. The House of Commons' Heritage Committee is completing a major review of the Broadcasting Act. In the Senate, this committee for many years had a subcommittee dealing with communications, which produced a number of major reports on emerging technologies and their importance to Canadians. Now, it is appropriate for the Senate to undertake a major study specifically focused on the news media.

The environment within which the media operate has undergone tremendous changes in the past two decades. Partly in response to that, the media themselves have changed and continue to undergo massive transformations. One need think only of the Internet, which was barely heard of 10 years ago, or of direct-to-home satellite television, CBC Newsworld, RDI, CNN, RDS, and MuchMusic.

The term ``convergence'' baffled many only five years ago, but is now in common usage, even though there is still much disagreement about what it means and whether it can work.

[Translation]

Today, Canadians get their information from very different news sources. For instance, in 1970, 88 per cent of Canadian adults read one newspaper every day. A scant 30 years later, this proportion has dropped to 49 per cent. At the same time, increased concentration and cross-ownership have prompted concerns in some sectors.

[English]

Some view this as a natural — indeed healthy — evolution, ensuring the financial viability of our media, and allowing an enriching cross-fertilization of ideas between different types of media. Others view it as a dangerous trend that is a cause of concern.

On this last point, I would like to pause for a few moments. I know that the very idea of a study such as ours has raised questions and concerns in some quarters. I wish to stress that we do not begin with preconceived notions on any topic. Senators on this committee have a wealth of backgrounds and views. We are all eager to learn more, and we are open to what our witnesses and our research will teach us. We all want this to be a broad, serious, thoughtful study.

This will not be the parliamentary equivalent of ``gotcha'' journalism. We are not focusing on any one model or group. Indeed, it would be irresponsible to do so.

The key principle to keep in mind is that the news media matter to Canadians. They are part of this country's social and democratic fabric. That is why the press, alone among Canadian industries, benefits from constitutional protection.

Here are the fundamental questions we shall be asking: Are Canadians still getting the quality and diversity of news and information that they need? How can we be sure that Canadians will have access to news and information from this country's perspective seen through Canadian eyes? Are there elements of public policy that, without impinging on freedom of the press, can or should be changed to address the new problems created by new realities?

[Translation]

We recognize that language and the regions are extremely important in this country. For this reason, the committee plans to travel to meet with Canadians on their own turf and to gain a better understanding of their problems and concerns.

However, before we find out where we're going, we need to know where we have been. Therefore, I am delighted to welcome our first very distinguished witness, Mr. Tom Kent, who headed up the Royal Commission on Newspapers.

[English]

Mr. Kent is a former journalist, public servant, policy-maker and business executive. In addition to his numerous high-level accomplishments with both the federal and Nova Scotia governments, he was the founding editor of the journal Policy Options and is now a fellow at the School of Policy Studies at Queen's University.

Welcome back to the Senate, Mr. Kent. We expect that you have an opening statement for us. After that we shall go to questions and comments.

Mr. Tom Kent, School of Policy Studies, Queen's University, and former Chair of the Royal Commission on Newspapers, As an Individual: It is indeed always a pleasure on the occasions that I have had the opportunity to meet with Senate committees, and it is, of course, a very special pleasure for me on this occasion. I am greatly honoured by the invitation.

You are concerned about the media today. I shall try to make some suggestions about that. I shall try to speak very briefly, because the important thing is to stimulate discussion. I will probably seem dogmatic.

While I want to make some suggestions about the current situation, I do want to emphasize, as you did, Madam Chair, that it has developed from the past. It is especially appropriate, indeed, to remember that it was a Senate committee that more than 30 years ago made a pioneering analysis of the role and performance of the media in Canadian public affairs. Though the government of the day paid no attention to its recommendations, the Davey report had an effect that remains highly important for policy today.

There was careful research in the preparation of that report. As you know, though, its conclusions were indeed an eloquent criticism of the press as it then was. While recommendations were not acted on, the report did have an important effect in that it chained the newspaper owners of the day into a kind of defence. Following the release of the Davey report, the Canadian Daily Newspaper Publishers Association issued an agreed statement of principles after the release of the Davey report. It was a reluctant agreement with a good deal of arm-twisting, but eventually it was achieved. Coming from the newspaper proprietors, it still serves today as useful criteria against which to assess the performance and the public service of the media.

I will quote a few key phrases from that statement of principles. It said: ``The operation of a newspaper is in effect a public trust, no less binding because it is not formally conferred, and its overriding responsibility is to the society which protects and provides its freedom.'' ``The newspaper keeps faith with its readers by presenting the news comprehensively, accurately and fairly.'' ``Sound practice makes a clear distinction for the reader between news reports and expressions of opinion.'' ``The newspaper should hold itself free of any obligation save that of fidelity to the public good.'' ``Outside interests that could affect, or appear to affect, the newspaper's freedom to report the news impartially should be avoided.'' ... and so on — out the mouths of the sinners, one might say.

Much has changed since the Davey report, but the profession that the Davey report provoked, from all the then- owners of the press, remains a sound statement for responsible journalism in a democratic society. Of course, it applies equally to the public affairs content of both print and electronic media. How those principles can be implemented might serve as quite a useful angle of approach in your inquiry — quite apart from the recognition that would then be given to the continuing role of the Senate in Canadian public affairs.

Those principles have been well set out, thanks to the stimulation of the Senate in the past. As always, however, there are impediments to the practise of principles. For the Canadian media, the strongest impediments are economic. Media revenue comes predominantly from advertising, and responsible journalism is not the low-cost way to fill the space or the time between the ads. That is — as economists say — the supply side of the problem. The demand side is a little more complicated. In densely populated areas, some media competition does turn on the quality of public affairs journalism — the alternatives offered by policy newspapers such as, in England, The Times, The Guardian and so on. That kind of competition in some closely knit, densely populated societies is the reason for the existence of some of the great newspapers of the world.

Generally, and particularly in most Canadian situations, we must recognize that attracting the readers, viewers and listeners sought by the advertisers is not closely dependent on the breadth, insight and balance of the information and comment on public affairs.

Fortunately, crass economics can be offset by a sense of responsibility, as well as by the prestige and influence that come with media ownership. While that was predominantly local ownership, family traditions with concern for the quality of journalism could and did develop in many cases. It is important that, in the first chain development in Canada by the original Southam papers, that spirit was maintained. The consequence was, for a while, more public complacency about concentration than one Senate inquiry could shake.

The reality shock came only with the newspaper upheaval of 1980, which resulted in a royal commission being required to articulate a little bit of obvious economics. Those obvious economics are that, apart from The Globe and Mail with its national ambitions, a newspaper recognizing its public responsibility was not, and is not, a business that is maximizing its profits.

Any accountant could see that such a newspaper was spending more on its public affairs content than it needed to do. Therefore, the commission had to conclude that such a newspaper was worth less in its existing ownership than it could be to a smart, cost-cutting entrepreneur. It was ready for takeover.

It seemed then that the newspaper future at that time was clear. There would be increasing concentration of ownership in corporations with diminished regard for the principles of journalism, compared with the earlier, mostly local ownership that newspapers had had. There would be less diversity in selecting information, which is the most fundamental role of the media; they, in effect, are the gatekeepers of the information that reaches most of the public. There would be less diversity in the information and comment that democratic politics requires.

The commission proposed a countervail to that trend, a tax measure that would have brought public responsibility and private profit into closer liaison. However, nothing came of that; and the demise of the old-fashioned Southam chain, as well as most of the remaining independence, was thereby sealed.

I have to say that the commission's foresight was limited. It got the economic analysis right, but it did not anticipate the force of two other factors. It did not imagine that supposedly hard business heads would become entranced with dreams of convergent bliss; and it underestimated the drive for political power that could be fed by easy borrowing.

At that time, I, for one, saw the future in terms of Thomson. I did not look ahead to an even worse reality: to Black and Asper.

However, I want to suggest that is the basis for a consoling thought, a very important thought, for your role today. It is a fact, I think, that most grasping hands often produce more financial instability. We have seen that in the press. The defence of concentration that used to be made — the claim that kindly corporations did not interfere with journalism — had some basis in truth in the early days. However, that claim has been completely and clearly destroyed by the uninhibited brashness of the Black and Asper ownership.

Therefore, countervailing action should now be more feasible. If this committee is ready with prescriptions, you might be much more hopeful than either the Davey committee or the commission turned out to be that they will be adopted.

I have a few suggestions to get discussion started. The first is a very simple one, for the sake of ``independent, competitive and diverse sources of news and viewpoints,'' which is a quote from the 1982 Order in Council to the CRTC, which directed the CRTC not to issue new broadcasting licences, or to renew existing licences for proprietors of newspapers, where the newspaper and broadcasting areas overlapped. Then, cross-ownership was just a local problem, dominant only in New Brunswick.

Today, of course, cross-ownership or convergence is not local. It is absolutely national. Bell Canada Enterprises, BCE, owns the main national newspaper, The Globe and Mail, and the CTV television network. Of course, Asper is widespread in both print and TV.

I think the economic evidence is one of considerable doubt, at least, as to whether that type of convergence benefits even any investors. What is certain is that it is a combination against the public interest. It undoubtedly limits the role and scope of the information that reaches the public. It creates a considerable degree of — to use an economist's phrasing — oligopoly. It is contrary to democracy, to a free society, and it can be simply broken because of the power the government has necessarily to control broadcast licences. It can be simply broken and it should be. Cross- ownership, convergence, can be simply prohibited.

Of course, legally, chains in the print media are a different issue. Existing competition law deals only with commerce, not with diversity of information and opinion. Its extension used to be dismissed as an infringement of provincial jurisdiction. That argument, always dubious, seems to have been cleared away by the 1982 Constitution. Under the Charter, it is surely Parliament's responsibility to preserve Canadians from infringement upon their freedom of information and expression.

However, there must be doubt whether the courts would see sufficient reason for federal legislation to break up business arrangements in the print media that have been legal hitherto. There is a great deal to be said in public policy against interference with what has already existed legally and properly. The wiser approach may not be to end concentration in the print media but to democratize it.

Democracy means one vote for one person. It really is incompatible with multiple organs of opinion per person. If there is only one vote per person, why should there be multiple organs per person?

Anyone with enough money can own a newspaper and — subject to the law on liable and so on — have that newspaper say what its owner wishes. That is fair. In our society, that is a situation that almost all of us accept. However, if two or more papers are in common ownership, then property rights beyond the first paper should, I suggest, yield to democracy. In other words, one paper is the owner's own mouthpiece, but the others should be required to operate under a guarantee of editorial independence in their reporting and comment. That was true in the case of the Southam chain in the past, by a decision of the Southams, but it is not true, by deliberate statement, in the case of the existing chains.

The royal commission did suggest a measure of that kind, but we did not get all the detail right and journalistic opinion at the time was not ready for it. You might find opinion ready now for the kind of trust arrangement that has long been used by some of the world's great newspapers, whereby the editorial direction of a newspaper is controlled under a trust arrangement and is not dominated by proprietorship as such.

In Canada, that could apply to more than one paper per owner — not to a single paper, but to more than one. For example, the owner contracts with the editor to be responsible for the paper's content and the editor supported by some kind of advisory board. A possible structure would be two members appointed by the owner and two elected by the journalistic staff. Those four would agree on the choice of three community representatives. If they could not agree, some judicially appointed referee could make the selection from their nominees. The independent members would choose the chair of the board. The editor would provide the board with an annual report on the paper's discharge of its public responsibility, its public trust, and the paper would publish that report and the board's response or responses.

I offer that structure only to illustrate the kind of trust idea I am suggesting. In the commission report we suggested something of that kind but made the mistake of associating it with a proposed press rights panel within the Human Rights Commission. We intended that to be at arm's length from government, but I think it created fears — genuine or professed — of state interference.

As another suggestion, I still think there is need for some kind of a national media ombudsman, an independent commissioner analogous to the Privacy Commissioner, responsible only to Parliament. It would be best for such a position to be quite distinct from any requirements — trustee or otherwise — for individual units of the media.

I will conclude with one other general point. Honourable senators will hear much hype about how globalization and information technology have changed the media along with our lives. Certainly the transformations are, in some respects, real enough. However, instantaneous TV from Baghdad does not lessen the importance of diverse reporting, diverse opinions, especially including Canadian views on world affairs.

Surfing the Internet is very useful, but it is no substitute for informed reporting of our public business — local, provincial and national — from Canadian sources. The growing complexity of our society is not a reason for a more concentrated, one-size-fits-all or a few-models-fit-all media. On the contrary, it makes the old principles of liberty and freedom of information and diversity of discussion more essential than ever for our democracy and for our Canadian independence.

You will undoubtedly hear strong representation from people objecting to restrictions on foreign ownership — particularly from people whose properties would be worth more if foreign interests could bid for them or put money into them. That special pleading tends now to be addressed in a short of newspeak about new economies of size and convergence. However, in truth, globalization makes it more, not less, important to have Canadian ownership of the media that report and discuss our public affairs.

The Chairman: It is certainly more than enough material for discussion and thought. Thank you very much, Mr. Kent. We will go to senators for questions and comments.

Senator Oliver: Mr. Kent, you referred to the Charter of Rights and Freedoms. Your commission started in 1981 and we brought back the Constitution in 1982. Are you prepared to comment on the rights and freedoms, first of an owner, such as BCE, Asper, or Black, versus the rights of the journalists, and then in respect of the freedoms of journalists and the readers as a result of the language used in the Charter of Rights and Freedoms — these being freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication?

Looking back over the last couple of decades, how do you think the Charter influences the rights and freedoms of those three classes of people — that is, the owners of the newspapers and the TV stations, the journalists who write the news, and the people who read it or listen to it? How are their rights and freedoms influenced by that language in the Charter?

Mr. Kent: I should say that the commission was appointed in 1980 and reported in 1981. In other words, we were ahead of the Charter. It seems to me that the Charter is designed, above all, for the rights and freedoms of individual Canadians — for the citizenry. The rights and freedoms of others are subsidiary to, dependent on, the fulfilment of the rights of the individuals in our society.

That right, in a democracy, is, above all, a right to information — not to the expression of opinion — on which opinion can be based. As I remarked earlier, we must understand that the media have the very special role of being the gatekeepers of the information that reaches the public, the information on the basis of which the public arrives at its opinions on public affairs.

Therefore, it is most important that gatekeeping not be restricted and that it be as broad as possible. Obviously there are economic limits to how broad, but it must be as broad as the realities of society will permit. The concentration of ownership lessens that broad diversity of ownership. Therefore, in the language of the Charter and within reasonable limits, the property rights of the proprietor should be restricted in some respect. I emphasize that it should not be in terms of ownership of one media expression. If you own a newspaper, clearly, in our society, it is essential that you be free to use it how you like.

However, as soon as the public right to diversity of information is limited by one organization owning several newspapers, then that need for public rights trump the property rights in the other papers — not in the first one, but in the others. The then owners of the newspapers recognized that principle firmly twenty years ago in the statement of principles that I quoted.

Certainly, it was recognized in principle, not always in practice. The existing major owner has deliberately denied it. There is no question that the right to control opinion and the flow of information in a range of media has been expressed firmly by a recent major owner, Lord Black, and by a present owner, the Aspers.

We now need more than the assurance of the owners. We need a device such as I suggested. A trust arrangement is required to ensure that ownership of multiple media does not infringe on the public's right to diversity of information and opinion.

Senator Oliver: Do you discriminate among different types of newspapers? There are weekly newspapers, which have a small circulation. One person may own 10 of those. Is there any difference between one owner owning 10 of those and one owner owning the leading paper in three different provinces, which are read interprovincially? Most of local papers are not read outside the county. Is there a difference?

Mr. Kent: There is a very important difference. Ownership is likely to be sensitive to the needs directly related to them. If you own a newspaper in a community, you are sensitive to that community, almost certainly.

If you own newspapers that are spread across a variety of communities, then that sensitivity is greatly reduced. As much diversity as practicable is still desirable in local organs. It does not have the same importance as in the major daily newspapers.

Senator Phalen: Years ago, the Kent commission made a number of recommendations to the federal government, including the requirement for the break-up of monopolies and a press rights panels. Would a press rights panel or similar panel be a priority for you today?

Mr. Kent: No, a press rights panel would not be a priority, because it has a bad reputation. That proposal aroused a great deal of indignation at that time. Why go back?

An ombudsman on a national scale would work, provided the independence is unquestioned. I used the example of the Privacy Commissioner reporting only to Parliament. That type of ombudsman would provide a place where people could go. By people, I do not mean just readers, I mean politicians and so on. People could approach the ombudsman if they feel that the public trust of the media is not being properly discharged. An ombudsman arrangement is highly desirable.

I would emphasize that I would not repeat the mistake the commission made a long time ago of linking that in any way with the other requirements suggested by that commission. It is a separate arrangement.

Senator Phalen: The Internet brings to our homes unprecedented access to information. As a result of the Internet, do you see newspapers playing as significant a role in informing Canadians today? How will newspapers shift in the face of competition from the Internet?

Mr. Kent: The most important shift is that the newspapers are one of the most useful sources that one can turn to on the Internet. To take an obvious example, if you live where I do and do not want to be burdened with too much consumption of trees by too many newspapers, you can get the essence of the Toronto Star on the Internet. That is great.

There is no question that the Internet is a most important additional source of early and detailed information for people. However, it is something that you have go out and reach. It does not play the role of the gatekeeper of basic information as it reaches most people. Your first impression of what the Senate and the government are doing for most people is still the impression received from the media — mainly from television, but also certainly from the press. What goes on to television is greatly influenced by what has been in The Globe and Mail that morning, so to speak.

The role of the print media is still a lead role within the broad media, which are the main source of information and opinion that people need to make their decisions about public affairs.

Senator Tkachuk: Mr. Kent, what views in Canada are we not getting?

Mr. Kent: We are getting a fair amount of news certainly. We do not get very much reporting from the outside world from Canadian sources. We certainly do not receive as much as we did at one time when Canadian Press had many people in many places. There were large Canadian Press bureaus in London, Washington and New York. They are gone. We do not get world news through Canadian eyes to anywhere near the extent that it would be desirable for us to have.

News otherwise, is pretty well provided, if you buy and read The Globe and Mail. However, not everyone will do that. It is not the sort of paper that a majority of people will read. Even then, The Globe and Mail's coverage of international affairs is in many ways deficient. In some instances, it is spotty even in Canadian affairs — to a considerable extent, it is a Toronto paper rather than a national paper in its content.

The fundamental point is that almost all the news we get is filtered through a set of very similar points of view. I am not talking about ownership as such, but the journalists whom the owners employ.

Senator Tkachuk: What point of view would that be?

Mr. Kent: It varies from time to time. It may be that the entire press has decided that ``X'' as a politician is really not any good and that point of view is reflected in almost all the reporting you see at any one time. There may be a shift in opinion, and you will get the same ``pack'' reporting of politics again. It is not a deeply ideological thing. Certainly, it is less diverse ideologically than when there was more diversity of ownership. The main problem is that there is not enough drive to provide the range of information and the variety of opinion that a healthy democracy should have.

Senator Tkachuk: Thirty years ago, I could go to a newsstand and pick up the Saskatoon Star Phoenix. I would switch on my TV and get CFQC News and CBC News. Now I get the National Post, The Globe and Mail, The Calgary Sun and The Edmonton Sun. This is not just at a newsstand; it can be at any 7-Eleven in Saskatoon. I can watch CBC, CTV Newsnet, CNN, Global and a number of other news media. We actually are getting a greater diversity. I want you to comment on that.

In relation to your second point, one of your conclusions was that perhaps we should create a trust arrangement. On radio, where before the CRTC controlled everything so there was a rock station, an easy listen station, etc., FM radio has democratized radio. Now you have news radio and more of it.

Would it not be better to democratize television? In other words, if someone wants to start an all-news channel, why not let him? Why do we have the CRTC interfere in that process and say, ``you can and you cannot''?

If someone wants to start and flog one to Canadians to represent a different point of view, would not that be true democratization of the airwaves, rather than have the CRTC restrict anyone from owning a radio, cable or TV station? Why do we have the CRTC telling us who can own one and who cannot?

Mr. Kent: I am sure you know the answer to that. The availability of channels was very limited. With modern technology — and this is an important change — more channels are more available without killing each other, as they would have done in the old days.

Senator Tkachuk: Let the market decide. Why are we deciding who should survive and who should not?

Mr. Kent: Because it is still not true that you can have an unlimited range of competition over a limited range of bands. I am not an expert on the technology, however, although many more bands can be accommodated today, it is still not infinite. Therefore, I would have thought that it would be still necessary to have some licence control of how many stations there are. It should not be a control related to news content.

It is important to distinguish between the entertainment content — which is dominant in the broadcast media — and the information content, the news content. This is why newspapers are really still so much more significant than the broadcast media. I have no views on whether or not there could be more competition among the broadcast media. It is fine if there can. However, I do not think that eliminates the need for diversity of source in the print media. This sort of diversity cannot be ensured unless there is either greater diversity of ownership or, if ownership is concentrated, then some kind of trust arrangement is provided for the ownership of more than one newspaper. Even if it is practicable — and I am not arguing about that — to abandon the CRTC control, that would not in any way remove the need for diversity of ownership in the print media.

Senator Ringuette: I am looking at this issue as a huge media consumer. It is a need, not because I am a politician, but because I have a need to know.

I have access to very specific news issues on the Internet through close-knit user groups. I also have access to TV and papers. As a consumer, I am more aware today than I was twenty odd years ago, of the variety and the channels of news distribution available and the options that I have.

In my view, quality reporting brings readership, and readership brings the ability to get ad revenue, and ad revenue is akin to satisfied shareholders. Therefore, the main issue in here is the readership — the consumer, which I am.

I do not see a problem with convergence because the consumer has the ability to choose from reporting and opinions expressed through a TV channel, a newspaper, or the Internet.

I believe that the readership — the consumer — will dictate to the owners of the media what they can expect and what they can deliver. I read three newspapers each day and I will make sure that those three papers are not controlled by the same owner. I believe that I am not the only Canadian looking at receiving news that way.

Essentially, we are always going back to the central point, which is the quality of the paper. At the end of the day, the consumer dictates what will happen to the structure of media ownership. What irks me is when a Canadian paper puts foreign news on the front page instead of a Canadian event that is as important, if not more important. I would like to hear your comments on that.

Mr. Kent: Consumers will certainly dictate the range of the kinds of media that exist, but they will not dictate the structure of the media that results from that.

You are not a typical consumer, if I may say so. People involved in one way or another in democratic public affairs are most concerned about the way in which the public as a whole receives the information that influences its views on public matters. This is the issue. To provide that variety, range and depth with accuracy is quite expensive. One must recognize that, from the point of view of the individual operator of a newspaper, television station or whatever, to do public affairs information well — that being what goes between the ads — is much more costly than to do it less well.

For consumers who are determined to have lots of choice to assess one against the other, that is fine. However, that is not the position of most consumers and, therefore, there is nothing in the form of consumer demand in this case that ensures a structure that consistently provides a range of well-informed and well-presented gatekeeping of the information that is reaching the consumer in as objective a way as is practicable. There is never perfect objectivity, but we want as much variety as possible.

While I accept that there is one sense in which the consumer is king — that being that the consumer will dictate the main distribution of the content of the media — the consumer is not thereby the dictator of the structure of the media and the degree to which it in fact provides a range of high quality information on public affairs.

Senator Day: Mr. Kent, I would like you to comment on the public trust issue that the media has and whether it is appropriate and acceptable in our society for the media and the journalist to balance various aspects of that public trust. Putting that question in context, could you comment on the embedded reporters in Iraq and CNN determining what to show and what not to show in order to maintain its office in Baghdad?

Being driven by the economics, is it appropriate for the reporters to be embedded and for CNN to do those things in order to get more timely, perhaps limited but precise front-line information, while at the same time sacrificing some of those other aspects of public trust such as independence?

Mr. Kent: Clearly, there is no possibility that there should not be, in situations like the recent one in Iraq, some embedded journalism. The U.S. army, or whatever the case may be, is entitled to make that arrangement with some of the press will be willing to make it. However, it becomes most important that, besides that source, including its speed and so on, there be other journalists who are not embedded and who are reporting by other media — possibly more broadly and almost certainly more accurately in some respects.

I would say that you cannot prohibit embedding any more than you can prohibit, domestically, some newspapers or TV stations having particularly close links with some public figures. The protection against that becoming a limitation of the public's right to know is that there be diversity in the ownership and control of the media as a whole.

Senator Day: Are you content that the marketplace will regulate that — that CNN will show other points of view or that CBC will show other points of view — or do we need something to ensure the marketplace gets that diversity?

Mr. Kent: I think we can be sure that the non-embedded organs of opinion, be they the CBC or whatever, will provide some diversity. In that sense, the market, supplemented in the case of the CBC by a public investment in a media, will provide some diversity. However, as I suggested, it would be helpful to have, in addition, some kind of ombudsman arrangement which, without any control, does draw to the public's attention limitations in the degree to which there is range, diversity and accuracy of information for the public.

Senator Corbin: I am going to reserve questions or comments on your opening statement for later. I would like to read the transcript before doing that.

However, I would like to query you on your concept of a journalism ombudsman. A few years ago, I made a thorough investigation of the situation of provincial ombudsmen across Canada. I must admit that the concept is a floating and fleeting one and the incumbents in many cases come at odds with the representative spokespeople of the provinces. At best, they do not even have power of recommendation. They can only note. At worst, they do not have much in terms of power of investigation or power of redress.

I would like you to spell out for us your idea of the kind of ombudsman to which you referred in your remarks.

Mr. Kent: I am not going to pretend to be capable of going into a precise form for this, but there are some fundamental principles. The most important one is the independence of the ombudsman reporting, in the case we are talking about, to Parliament. Second, the ombudsman must have full legal rights to inquire and, of course, to make public.

I do not think one would want to join that with rights of redress, which is, I think, a separate issue. My view is that the ombudsman is, by the nature of the role, a commentator. It is most important that he be a thorough, independent commentator with every access to his information, to responding to problems and to making whatever conclusions he reaches freely public. He needs resources to do that.

Whether there should be redress if a newspaper has hurt someone's reputation is a different legal issue to be settled by other legal processes. It is important that the ombudsman make known a situation that has provoked doubt as to the accuracy, fairness or adequacy of the reporting of something.

However, it is investigation, it is not redress, in my concept.

Senator Corbin: I do not think you would have enough with one ombudsman to cover the entire waterfront in this instance.

Mr. Kent: I did refer to a commissioner. By a commissioner, one does imply a commission with a considerable organization behind him or her. If it should be a commission of several people or only a chief commissioner would be fine.

Senator Corbin: You are talking about a blooming bureaucracy over time.

Mr. Kent: There is always the danger of a blooming bureaucracy. If you set it up carefully, I think that can be avoided.

Senator Oliver: I would like to go back to your concept of trust and editorial direction under a trust arrangement.

I am interested in business and newspapers and TV are businesses. One aim in business is to maximize shareholder value in that business. Given your definition of a trust to control the editorial direction of the second, third and fourth newspapers or groups, what if that particular editorial direction did not maximize shareholder value but reduced it? Who says that government or Parliament or the courts should have the power to prevent a person from going into a business to maximize the value to oneself and to the shareholders? Business is about making a profit.

Mr. Kent: That is not what business of all kinds is about. For example, we need the Bank Act to ensure that in some respects banks do not maximize their profits. Newspapers, because of their role in information that is vital to democracy, are not only businesses. They have — as their owners at one time accepted — a public responsibility, which means that to discharge that responsibility well they must have good public affairs content in the newspapers. To do that, owners spend more money than you would to maximize profits.

This is the problem. This is the reason to have a trustee arrangement. A newspaper business is not a business that society can have solely maximizing profit. Of course if must have good profits, there is no question about that, but equally it does not exist to maximize them.

I will cite an example with which the chairman would have some familiarity. The Southam business was taken over because the Southam business did not maximize its profits. It spent more money on ensuring the quality of the content of its newspapers than was necessary for the economic survival of the newspapers and maximizing the profits of those newspapers.

If the words that we accept as the definition of the role of the press have any meaning at all — and in a democracy, they must have a meaning — the media business is not a business where the sole concern is shareholder value. Shareholder value has got to be circumscribed to a degree.

Senator Oliver: Should we regulate media as a public utility then?

Mr. Kent: No, no. You make as much money as you can but within the conditions of responsible journalism. You will spend on resources needed to report the news accurately, fairly, et cetera.

Senator Day: I would like to follow up on Senator Oliver's question. If we take your thesis that diversity is important for the second, third and fourth newspaper, have you thought as to whether, from a print press point of view, we should do the same thing that we have done in broadcasting and have the public purse involved in ensuring diversity? Are you content that that diversity, with your regulation, would be achieved through the marketplace and just raise costs of newspapers?

Mr. Kent: Yes, I am content. Obviously, the results will not be perfect. However, the risks related to more direct state action are too great for us to face them. They were faced by necessity originally in the broadcast business. The newspapers business did not have to fact them and to bring them in now would be a mistake.

The Chairman: Mr. Kent, I have a question in regard to your proposal for an ombudsman or commissioner. Would you explain to me how that would differ in practice from the existing press councils?

Mr. Kent: The existing press councils are provincial. They have limited resources and roles. I am suggesting a national role for a commission. Not to make light of the importance of local information, local affairs and provincial affairs, in the final analysis, the most important thing for democracy of the country is the quality of the national news. I do not mean the national news of the CBC, but the national news as a whole. For that, the responsibility of Parliament of a commission reporting to Parliament is essential.

The provincial press councils do a good job within their provincial range, but that is the end of it.

The Chairman: Who would appoint this commissioner?

Mr. Kent: Such a commissioner must be appointed by the government with the agreement of the other parties in Parliament at the time. It should be a non-partisan appointment in that sense.

The Chairman: It would definitely be a creature of Parliament, of the government?

Mr. Kent: It would be a creature of Parliament, not of the executive government.

The Chairman: Thank you very much for this, Mr. Kent. As you can tell from the questions, you have launched us on a long and fascinating journey. You have caught our interest and prodded us to think. Thank you very much indeed.

While our next witness comes to the table, I might just perhaps note for those who are interested that viewers and interested parties can send suggestions to the senators on the committee or you can keep up to date with our proceedings on our Web site at www.senate-senat.ca/media-e.asp.

Our next witness is Mr. Mark Starowicz.

[Translation]

We are also pleased to welcome the Head of Production of CBC CineNorth. Mr. Starowicz is a veteran journalist. He has also created and produced a series of programs on Canada's history, along with a number of documentaries for the CBC.

[English]

He has worked with As It Happens, Sunday Morning and The Journal. He has also worked in the print media with the Montreal Gazette and The Toronto Star, and has published in other newspapers and magazines. We are grateful to you, Mr. Starowicz, for joining us today.

I understand that, although you are currently employed by the CBC, you are not speaking for the CBC; you are speaking for yourself.

Mr. Mark Starowicz, Executive Producer, CBC CineNorth, as an individual: I am speaking as a private citizen.

The Chairman: I understand that you have an opening statement, after which we will go to questions.

Mr. Starowicz: Honourable senators, you understand the media better than most people understand it. There is certainly confusion in the public in respect of broadcasting and the issue of private and public investment. This debate is particularly constant in Canada and some clarification is necessary. They are not debating this all the time in Germany, France or Europe but in the editorial pages of Canada's newspapers, we are still debating this basic ``chicken-and-egg'' thing — why can we not leave it to the private sector and people will find what they want and let the market rule.

I would like to provide you with some of the economics of television. Most citizens in North American commercial television do not understand how it works, as I said. They think it is a bit like a movie theatre. The owner of a movie theatre tries to obtain the best movies possible to attract the most customers and, thereby, make his profits from selling tickets. Most members of the public make the assumption that television is the same, with the only real difference being that we do not have to pay an admission price because that cost has been offset by the commercials. It is as though you have come into the theatre and agreed to sit through five minutes worth of commercials to pass up the box office fee. As the film is the product of the movie system, so the product of television — it is universally assumed — is the program.

However, that is not the economic model of television, at all. The product of commercial television is not the program. The product that is being bought and sold is the viewer. To quote Les Brown, the former New York Times writer who became one of the world's leading historians of the industry: ``The product of commercial television in North America is the viewer. The program is merely the bait.''

Follow the money, which is usually a good idea. The exchange of money in television is not between the viewer and the network but it is between the network and the advertising agency. The advertiser is buying ``eyeballs'' by the hundreds of thousands and by the millions from the network.

This is not a democracy. This is not one-person, one-vote. Certain demographics are far more valuable to the advertisers than others are. You will notice that a woman, 18 to 35 years old, for example, is worth at least 10 people over 50 years of age. That is because the people in the 18 to 35 demographic group still have their major purchasing decisions to make: dishwashers, fridges, homes and cars. In the Toronto market, depending on the network or on the time slot, this 18 to 35 demographic group may be sold at $150 per thousand per 30 seconds. However, an old goat like me, who is unlikely to make the same purchases, in the same market and for the same time slot will cost $7.50 per thousand. We are not equal citizens in this universe. We are classified into complex grids and income categories with names such as ``Asian Heights,'' meaning Vancouver Chinese Gentry, and ``Urban Nesters,'' meaning childless, downtown professionals.

Most important, some of us do not even count as citizens and I am not talking about street people. I am talking about people over the age of 50 and about people under 12 years. A program can attract millions of older citizens or preteens and never see the light of prime time. However, all the children have not gone to bed by 7 o'clock p.m. and all the people over 50 have not gone to bed by 7 o'clock p.m. They are just not worth programming to, in commercially valuable time.

Have you ever wondered why, throughout all of North America in commercial television, the news is scheduled at six and at 11? You are not deluded into thinking this is to make it more convenient for you. There is no peace in any household at six o'clock and at eleven o'clock most of us are making our way to bed. To quote Les Brown, again from his book, Television: The Business Behind the Box, ``TV news is scheduled at the peripheries of prime time, where it will do the least possible damage to commercial revenue.''

If you want men and women in the 18 to 35 demographic, you design Friends or Sex in the City or Survivor. If you want to attract the 12 to 18 niche, you design Dawson's Creek or Gilmore Girls. Incidentally, almost everyone on television is white and suburban with disposable income. Hispanics constitute a titanic proportion of the American population — more people speak Spanish as a percentage of the American population than speak French as a percentage of the Canadian population — yet try to think of the last Hispanic sitcom you saw in your recent viewing. There are few African Americans and Hispanics on prime time television because, despite their proportion of the American population, they are not as desirable an economic demographic for the advertiser as measured by disposable income.

Commercial television in North America is part of the marketing and distribution system of the manufacturing economy, not part of the cultural production system. It is in the same column as Woolco and not in the same column as schools, universities and roads. We are bought and sold, in our hundreds of thousands, by companies that assemble viewers — we call them networks but they are assemblers of viewers. We are sold to agencies that represent auto and computer manufacturers, pharmaceutical companies and toy manufacturers. None of this is inherently pernicious. Business is business — only that will get produced which returns the highest yield on investment to the various players in the system. In this model, the viewers are defined as ``consumers.'' The unit of measure in television is consumers, even subdivided into demographics.

The commercial television industry has successfully hijacked the rhetoric of democracy, liberty and choice. In the cornucopia of choices, you have pure democracy at work and the viewer ultimately decides what will be aired or not aired. You have heard the arguments. People are voting with their eyeballs. If they want more Canadian programs, why are they watching Frasier? The question of freedom of choice has been defined by this commercial industry as the freedom to pick between 200 channels worth of such programs.

Freedom of choice, honourable senators — in radio, in television or in cinema — should be defined as the freedom to produce television, not just to consume. This is best illustrated in the Canadian North, from where I just returned after doing a documentary in the Inuit community of Inukjuak in Northern Quebec.

They have almost as many channels as I have in Toronto. They can choose Frasier, or Entertainment Tonight or watch the fall of Baghdad, as we did. However, they have virtually nothing in their own language — nothing is produced by them, nothing that speaks to them or to their society. Do they have freedom of choice in television?

Like any Canadian, I want my American programs. I like American television; my daughters like American television. I do not want any one restricting our access to it, and I do not believe in electronic Berlin Walls. Yet how did we come to delude ourselves that everything that appears on that screen must be arbitrated totally by what is essentially a massive consumer distributing industry?

The experience of Canada: A People's History is painfully pertinent. For two years, not a single Canadian corporation would become a sponsor of the series. Not the airlines. Not the oil companies. Not the financial sector. Not the manufacturing companies. Not the big retail chains. Not the communications giants. Not Canadian Pacific or Canadian National. Not the Bank of Nova Scotia, not Bombardier. There was nobody until the last minute when Sun Life came on board. For the first year, we had four of the five commercial underwriting spots blank. The next year, Bell Canada gratefully stepped up to the plate and bought slots.

To those who say, as the National Post does every day and The Globe and Mail every other day, let the markets decide and let the people vote with their eyeballs, I say, if you cannot finance the history of your own country, what can you finance?

The truth is that the marketers in those companies felt there were more efficient ways to sell cell phones, Toyotas, and Tylenol than in a Canadian history series. It may surprise to you hear me say this, but they are probably right. We probably were not the most cost-efficient delivery vehicle to 18 do 25 year-olds. We had too many people from other demographics cluttering up the viewing. We were not the best platform for selling cosmetics. There were others that were more focused.

However, people wanted this programming. They set national viewing records. The Canadian history series matched the Stanley Cup playoffs for viewers. I am still reeling about this.

The series would never have seen light of day if it had to meet the market consumer delivery test. Even if it did reach millions of people, there are cheaper ways of reaching millions of people. You can get 3 million viewers by buying CSI at a miniscule fraction of the price. Why would you spend $25 million on 32 hours of Canadian history to get the same number of viewers?

This is how Canadian programming is strangled daily. It is not because Canadians do not want such programming, and it is not because we cannot compete with the world. It is because it is not the most efficient return on investment or not the most efficient demographic targeting device to sell consumer products.

Why does it have to be? How did the marketing heads of Coca-Cola and Canadian Tire become the people who decide what appears on television and what my children watch? I understand and accept that if a Canadian program is not popular and has not found a significant audience, it should probably die. However, I resent that a Canadian program will not even be born, even if it can reach a large audience, if I cannot prove to the marketing system that it will sell shampoo.

You have a broadcast regulatory system in this country. I have just described it. Let us not confuse the laws of marketing with democracy.

Because we live next to the most powerful commercial market in human history, we have been conditioned to accept this as the norm. In fact, at the dawn of television, that system was an aberration. Public broadcasting owes its genesis to the British, who set up a completely public system and only allowed commercial competition decades later.

As I said, radio and television in Britain under the Conservative government, was not in the same column of the economic register as department stores, but in the same column as schools, highways, railways and the post. It initially developed that way in Japan, Germany and France and in most countries of the world.

In public television, the economic model is different. Large audiences matter. Do not let anyone fool you about that. However, the unit of measure really is one-person/one-vote. In commercial television, the unit of measure is the number of consumers. In public television, the unit of measure is the number of citizens — one person, one vote.

The health of a mixed private and public system has to be measured in its balance. Both public and private networks will produce children's programs, both will produce comedies. However, one — the public half — will produce children's programs regardless of the particular needs of the toy manufacturers. The comedies will appeal to more than the higher consumer demographic. Britain, for example, has a healthy, balanced system. Private networks make strong profits and the BBC is widely cherished by the audience as well.

It is not necessary, in 2003, to have to persuade anyone that information industries are the central battlefield of the 21st century. All of us now call it the ``information age.'' Yet, Canada enters that age with a dangerously weak media sector. The newspaper industry is gripped by a monopoly, of opinion, at least. The national magazine sector is moribund. The book publishing industry — despite the golden age of Canadian authors — is financially precarious and increasingly being taken over by multinationals. The broadcasting industry has been fragmented into a dizzying array of channels and most of the private production industry is heavily dependent on decisions in New York and Los Angeles. Our ambitions often reduced to who can produce the most exportable cooking show.

The largest unit, the public broadcaster, is still in the recovery ward after a decade of divesting itself of a generation of talent, entire production departments and most of this regional infrastructure. The provincial educational networks are barely on life support.

As we saw this month, the structural funding system at least has the virtue of consensus. There is now absolutely no one who believes that it is works any more. If we had set out to design a system by which Canada will lose in the global information economy we are entering, we have found it.

There is no Canadian national industrial strategy for the information age. Our strategic planning is, in practice, diffused among the Department of Canadian Heritage, the Department of Finance, the regulatory agency and cacophony of federal and provincial funds and tax credits best understood by entertainment lawyers and riverboat gamblers. I will concentrate on the industry I know best — television and radio.

The system is broken and dysfunctional, not because there are not sound ideas or dedicated industry leaders or ministers. Not because we do not have superb producers in the private and public sector. This chaotic drift derives from the fact that for almost two decades, successive governments have made it clear that national broadcasting and cultural industries are not a significant priority of national policy. It is a mystery to me how Canada failed to identify this sector as one of the top two or three absolutely key strategic economic areas in the new global order.

We have focused on reducing the national debt and the deficit in the last 20 years. This is understandable, but now that this has been brought under control, a blueprint for a concerted national broadcasting strategy and a strategy for becoming a global player is economically paramount. I am trying to cast this in terms of national economic strategy. I am treating this as a strategic business for the 21st century.

The explosion of channels is global, senators. The last time I was in Europe, it may have changed now; there were 19 discovery channels — the Czech one, the Slovakian one, the Hungarian one. There were 20 history channels, all franchises of the main history channel.

National Geographic channels are an international force. They are in every country in the language of the country. Discovery Channel is up to seven channels just in the United States alone. This infinite channel universe is so hungry for product that it has given birth to a global boom in television and cinematic production. It is essential that we position ourselves to become major producers — that is, exporters, on a global scale — of the best children television for the world, nature programming, drama, situational comedy, and documentary.

To that end, we have to bring our house in order. There is no way we are going to become world-scale competitors in production without restoring the public-private balance in Canadian television. The public networks have traditionally been the engines of production and development. That is certainly the case in the United Kingdom, which has a very healthy private and independent sector that would not exist without the BBC.

The public sector in television has shrunk to a miniscule proportion of the channel spectrum. I am being conservative; I am counting only real channels, not repeat channels, not the digital tier or the western feed of Global. There are many more channels than this. However, out of about 70 channels in the English part of the spectrum that most cable systems bring to our Toronto home, only three are public sector; there is the CBC, NewsWorld and TV Ontario. That works out to one twenty-fifth of the shelf space of the Canadian broadcasting spectrum. CBS has its own channel in Canada, as does ABC. In fact, NBC has two: NBC and MSNBC.

The first Broadcasting Act said that the airways should be predominantly Canadian and, in the introduction of television, it was stated the system would be predominantly Canadian. Please understand that we have one twenty-fifth of the shelf space. There is, of course, Radio Canada and so forth on the French side; but while the proportionality is somewhat different, it is still embarrassingly small.

The first element in creating a national strategy is therefore an urgent program to renew and expand the public sector in television as a driver for the industry. This also means trying to resuscitate the educational networks and reinvesting in the National Film Board. The key is the CBC. Unless the CBC is able to rebuild the drama, documentary and entertainment infrastructure it lost in the last 15 years, Canadian television will have no strategic momentum.

In case you think we are being competitive with what we do invest in this sector — and this is a serious Canadian problem, ``what you want another $50 million?'' — compare the British investment in public radio and television to Canada's. Canada's appropriation for everything is approximately $800 million, inching up toward $900 million. Do you know what the BBC's budget is in London? It is $7.5 billion. Nobody is saying we should be doing that; Britain is almost twice the size of Canada. However, honourable senators, it is not seven-and-a-half times the size of Canada. Britain understands the emerging global market and information. The British television industry, public and private, dominates world production as much as the U.S. because of the national investment in the BBC as a driver.

By comparison, Barry Keifl, there is a presentation made by Barry Keifl, a former head of research to the Professional Marketing Research Society in Canada, that describes television quite well:

In the past two decades, federal and provincial governments and their agencies have tinkered with our broadcasting system but have continuously shied away from developing a serious-minded broadcasting and communications policy. Telefilm and other private and public programming funds have been valuable creations of public policy but they amount to little more than the funding removed from public broadcasters over the last decade and are not a substitute for well thought out and properly expensed broadcasting policy, one which focuses on the public and programming. The relatively small amounts of production funding, once concentrated on one or two broadcasters are now dispensed to hundreds of producers, often for airing on niche specialty channels that have little chance of drawing a significant audience.

That is the best description of the current state of Canadian broadcasting I have read.

We are building a low-grade television strip mall of marginal outlets with 1 and 2 per cent of viewing while the downtown core of Canadian television is left to decay. The drama studios of the CBC, at the broadcast centre on Front Street where I left yesterday afternoon, are either cold or empty. When they are not empty, they are occupied by private — largely American — production crews that are renting them to shoot cheap movies.

The mixing suites, sound effects and other post-production areas are devastated by layoffs. In the production of the Canadian History Series, most of the people working on mixings and post-production already had their layoff notice with their last production. Most of the people who worked on the Canadian history project are no longer employees of the Canadian Broadcasting Corporation.

Ladies and gentlemen, we celebrated the anniversary, a few months ago, of the founding of public broadcasting. This was a response to a tidal wave of new technology — it was called radio. It overwhelmed us. There was a tendency to become defeatist then — I call it technological defeatism — but we did not. We managed to create a system that actually responded to this.

Remember the poster for the movie The Perfect Storm — a huge tidal wave with that little boat? If you thought the 1920s and the founding of public broadcasting was something, the deluge that is coming toward us now is best exemplified by that poster. There will be such an infinity of digital channels that it will be impossible to regulate them.

More than that, look to the Internet. This convergence is misunderstood. There is a migration happening. Print is migrating to the Internet as a delivery system. Music is almost collapsing into the Internet. We have, in the last three years, seen music drift entirely to the Internet as a distribution system.

Radio is, in many ways, significantly migrating to the Internet. People ask how the Internet will affect television. Honourable senators, television will become the Internet. What we are seeing here is an efficient, multi-point delivery system that, the moment the bandwidth becomes acceptable, everything goes to the Internet. That is where your new channels will come from.

In closing, or almost closing, we have all missed one point about the last war in Baghdad. When I was at The Journal, on Tiananmen, we were marvelling at the technology that allowed us to move one still picture from Tiananmen, fed over a phone line, in 22 minutes. In 22 minutes, we were able to get a picture from Tiananmen on TV, one frame. Now these people throw a wire out the window and dial home. That is what has happened.

That will happen with the Internet. You can dial yourself into this war if you are a reporter, although I grant you it is through satellite phones and things like that. However, once that last barrier to bits is broken, this flood will come.

You cannot keep this stuff out — it is probably unethical to keep this stuff out. You have to compete. You have to produce. If you want to be a player in drama or children's stories, if you want your voice to be heard, you have to produce. The issue can no longer be addressed on the regulatory side of the equation, at least not significantly on the exclusionary side of the equation. It has to be addressed on the production side of the equation.

We will have to decide whether this is an area of public strategic investment in Canada. In my view, this is the equivalent of deciding whether we are going to take the nuclear energy age seriously or the jet age seriously? This is a strategic opportunity for focused national thought, policy and — I hope — in the end, a decision to become major international players in the field of telecommunications.

The Chairman: Thank you, Mr. Starowicz. That was indeed interesting.

Senator Oliver: I found your remarks refreshing, challenging and stimulating. I was most interested in your analysis of what you called the ``market consumer delivery test,'' looking at how the major multinational corporations determine content depending upon what they can sell.

When you gave a speech to the Kesterton group not long ago, you closed your remarks with the statement, ``The age of regulation is over.'' Does this mean that there will be no scope for public policy with respect to Canadian media, or were you referring to the market consumer delivery test having taken away the power from the regulator?

Mr. Starowicz: I meant that the delivery systems, largely through the Internet and through digital, are beyond regulation. I believe in using whatever means are necessary to maintain a civil and ethical marketplace. There is room for a securities and exchange commission even though information moves quickly. I do not think the CRTC should go out of business.

However, the premise of regulation, as Mr. Kent put it, is based on a limited channel spectrum. When there were only 13 channels, they had to be distributed fairly. In an infinite channel universe, that premise for regulation disappears.

Senator Oliver: For the private rather than the public broadcaster, surely the multimedia corporations are now determining the content, are they not, based on what they can sell and what they are prepared to buy ads for?

Mr. Starowicz: Absolutely. There are such titans emerging as WB and Fox. Fox News is tailored entirely to be jingoistic — not because they are more patriotic than CNN, which is more patriotic than MSNBC. It is targeted jingoism as a marketing tool.

Yes, the larger the editorial unit, the more it is capable of significantly colouring and determining its content so that multinationals exercise a gravitational effect.

Senator Oliver: You said that the public-private balance in Canada must be restored. I heard you throw out one figure, for drama, of $50 million. Do you have a number in mind for what you think it will take to restore the balance that we need in Canada?

Mr. Starowicz: I do not have a number. We must first form a strategy for rebuilding. That would take several years and there should be several priorities. We have many issues to answer: Where does regional fit in our priority system? Do we rebuild the provincial broadcasters? Does such a strategy require discussion with the provincial governments?

For a simple answer, Mr. Al Johnson, former president of the CBC, quoting the Broadcasting Act, which said that the system shall be predominantly Canadian, offered the slogan ``Equal time for Canada,'' meaning that the amount of television programming produced in Canada should roughly equate to the amount being imported.

Senator Oliver: Do you have an estimate of what that would cost to do?

Mr. Starowicz: I do not.

Senator Oliver: A little more than $800 million?

Mr. Starowicz: Vastly more than $800 million, and not necessarily all concentrated in the CBC. A public broadcasting strategy should involve the National Film Board and Telefilm or its successors. I am sad to see the decay of educational broadcasters provincially. I think the spectrum is in chaos.

I will make one plea. One of the biggest mistakes ever made in regulatory practice was not giving CBC a second channel. Almost no public television outside the United States tries to operate on only one channel. TV 2 is essential. You must have multiplexing. CTV has multiplexing over several channels. Also, the channel spectrum can be reorganized. For example, CBC 1 is on channel 5 in Toronto, cable 6; Newsworld is on channel 23; and Country Canada is on digital channel 163. My point is that not everything is financial. The spectrum of numbers can be realigned with some order brought to it so that you can flip back and forth without having to look it up on your numeric keypad.

We should have another Massey commission on broadcasting that looks at it structurally. We are confronting an age that even more daunting than that which faced the Aird commission. We have essentially regulated this like common law, with a decision here and a decision there. Many of our policies are accidental. There are no villains really; it is a series of situational decisions.

We must look at this first as an international strategy and a national strategy and build from the ground up. That is why it is impossible to give a figure. It would be irresponsible of me to do so.

Senator Ringuette: I enjoyed your analysis and your passion for the issue of your presentation. You have summarized the situation of commercial TV and news TV in relation to newspapers and commercial advertising in newspapers. I spoke earlier about readership.

You spoke of the difference between the private and the public broadcaster. I agree with you that private TV is based on the number of consumers whereas public TV is based on the number of citizens.

That reminded me, as a New Brunswicker, that I was offended by Radio-Canada/CBC's reporting of the Canadian Winter Games a few months ago in New Brunswick. There was a lack of programming and transmission. Are you saying that it was the number of citizens in New Brunswick that determined the amount of time allocated to this event held in New Brunswick?

Mr. Starowicz: I am not familiar with the circumstances of that, senator. The citizens of New Brunswick have a history of being eloquently vocal about their rights. Perhaps, in this case, they should have been a little louder.

Senator Ringuette: We were vocal and will continue to be.

I appreciated your remark that we have innovative artists in our area. I am thinking of the export of Anne of Green Gables and I know of a company in Montreal that is producing educational cartoons for kids and exporting their product to Japan. There is export of programming currently happening, although perhaps not to the extent that you wish.

Following up on Senator Oliver's question, I would like to know what kind of dollar figure you would like to see.

Mr. Starowicz: I would triple the size of the public sector and not necessarily the CBC's budget. I have tried to say that it is multi-platformed and that we have to address it through the independent side.

I believe in a strong and healthy private sector; I do not think it should be broken up into 200 little 7-Elevens. Alliance Atlantis and others are internationally competitive units. In a world where Warner Brothers and Time Magazine think they are too small to compete so they came together, what were we doing taking apart the only world- scale institution we have — the CBC? On the other hand, we should also be trying to have internationally competitive units. We are among the world's leaders in animation thanks Nelvana's work over the past two decades.

This requires a vision of how to grow the public sector; how to consolidate and organize the private sector; and what our policy is about encouraging provincial. That will have a dollar figure. I am not trying to be evasive. A CBC that is in any way a world player is at least a $2-billion to $2.5-billion institution and not a $795-million institution. We are not taken seriously and we cannot compete seriously.

Do you think CBC owns Anne of Green Gables or DaVinci's Inquest or This Hour Has 22 Minutes? We rent those productions. I was the documentary editor for 10 years and we do not own most of Witness or Life and Times. We give money to rent what is owned by the independent producer that did the work.

In this day and age, a big building with nothing in the vault is not the name of the game. The competition in this universe is software — who owns the rights to Casablanca and Survivor? You could have a public corporation that owns the rights to its newscast. It owns the rights to Canada: A People's History, but Venture and the fifth estate are episodic; they are not something that you can sell.

That is how we have denuded the public assets. The televisual public archives of this country closely resemble the Baghdad Museum today, in terms of its assets.

Senator Merchant: Why will Canadians not watch the CBC?

Mr. Starowicz: Canadians watch the CBC.

Senator Merchant: I have a problem because I like the CBC and I like to watch it. I feel that sometimes they are taking me for granted and mistreating me. How do you build viewer loyalty, for instance? What time is the CBC news show? It is at 6:00 or at 5:30 or at 8:45 or at 10:30? For instance, during hockey season when am I able to see the news on CBC? I frequently turn it on when I go home and the news is over. What are my options? I watch CNN because I know that when I turn on the television at a certain hour, I will see the news.

I feel abused because I want to watch the CBC news but I am unable to do so.

Mr. Starowicz: I know what you mean. The news is almost universally available on the hour on Newsworld. You can watch the National five times back-to-back. I would rather cast it outside of news.

We put on DaVinci's Inquest, which we are not allowed to run on the news channel. We did not get TV 2 but rather a second channel that is only allowed to provide information. This is so sterile. What is your next chance of watching the next episode of DaVinci's Inquest? I like to ask if anybody in a room has watched the fifth estate, at any given time, and often only two hands will go up. Yet, we are the normal viewers of the fifth estate.

These days you have to hunt the viewer down and give them 10 or 11 viewing opportunities of something, especially with this Internet, multiple-choice world coming. When A&E ran Longitude, they did so from 8 p.m. to 10:00 p.m. and then from 10 p.m. to 12 a.m. They repeated that pattern for 14 consecutive days. That is what a big American network does to broadcast one of its principal assets.

The BBC now has seven television channels and 11 radio channels. The Italians always had three channels. The answer is to let your viewers see the programs that you do produce. Do not force a choice between a hockey game and DaVinci's Inquest. We waste Canadian programming by playing it only once or twice and many Canadians cannot find it. That kind of thinking is gone in this Internet and digital age.

Senator Adams: I heard you say that you just returned from a trip to Inukjuak in Northern Quebec. How do you feel about some of the people living in the community today in respect of communications and especially television? We just opened the radio station in Rankin Inlet, and we do not know who owns it. We call it CFRA and the local announcers do not even know what that means.

Technology has brought us the Internet but many people in both northern and southern communities are not familiar with it and so they are unable to take that kind of job. Two local guys used high-speed Internet that was run by Bell Canada and now Northwestel will control it. There should be some kind of policy and program in respect of high- speed Internet in the north.

What do you think will happen to communications in the north, given the Inuit language and culture? The CBC broadcasts in the north and we have Inuktituk and English shows. We have major community radio broadcasts in Iqaluit, Rankin Inlet, and James Bay broadcasting nearly every day. Since the new station first aired, we have to translate from English to Inuktituk. At CBC North, in Frobisher Bay, we did not have any translation and only heard about one-half hour of Inuktituk at a time.

What do you see in the future in respect of our language in the world of communications? You have talked about other countries.

Mr. Starowicz: I will keep my answer brief. During the short time that I spent in Inukjuak, I was deeply struck by the profound concern over the loss of the language and the emerging structural problems because children cannot communicate with the elders. I saw one grandfather who could not talk to his grandson and the father in between spoke only one-half as much Inuktituk as the grandfather spoke. This has been happening since 1958, in some cases.

I have a sense of two possibilities for broadcasting in the North: it could become a potential SARS of the north because it is completely contaminating possibilities of communications in the north, or it could be a great opportunity for the north. We have tremendous responsibility that will make the history books 1000 years from now. They will be writing about us the way people write about Jesuits and missionaries now if we screw up the broadcasting policy in the North.

When I was in Inuvik 20 years ago, I had the choice of watching either Detroit or Seattle stations. I would see some of the young men in front of The Bay dressed in black shirts and hats. I asked the station manager, ``What is going on?'' He answered, ``Kojak came on two weeks ago.''

Whoever decided that you could just dump 100 channels somewhere without any kind of structural support or help? My point is that the ability to produce television and radio and publish book is a function of sovereignty. You are a sovereign people, with a sovereign language and community in proportion to which you are able to express yourself.

The people of the North would be far more able to express their needs than I am. I would be deeply respectful of their needs. I would be careful about dumping whatever we choose to air in the south into the North. It is not useful to the educational community, the children or the economy there. Perhaps people do not want a stock market report. Perhaps there is something more useful to the economy of the region. It should be looked at in that way.

The Chairman: Mr. Starowicz, thank you very much, indeed. You have given us an extremely interesting session. We are grateful to you for being here.

Honourable senators, our next meeting will be on Thursday.

The committee adjourned.