Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 2 - Evidence, February 12, 2014


OTTAWA, Wednesday, February 12, 2014

The Standing Senate Committee on Transport and Communications met this day, at 6:45 p.m., to examine the challenges faced by the Canadian Broadcasting Corporation in relation to the changing environment of broadcasting and communications.

Senator Dennis Dawson (Chair) in the chair.

[Translation]

The Chair: Honourable senators, I call this meeting of the Standing Senate Committee on Transport and Communications to order. This evening, we are continuing our study into the challenges faced by the Canadian Broadcasting Corporation in relation to the changing environment of broadcasting and communications.

Our witnesses this evening, appearing via videoconference, are from the centre for media studies at Université Laval. Florian Sauvageau, who founded the centre in 1992, is a professor emeritus of the department of information and communications at Université Laval. He has also worked as a lawyer and journalist. His area of expertise includes cultural policy and communications. In 1985 and 1986, Mr. Sauvageau co-chaired the Working Group on Broadcasting Policy in Canada.

Daniel Giroux has been the secretary-general of the centre for media studies for 16 years. He is the instructor for a course about knowledge of the Quebec media at Université Laval, where he graduated with a degree in journalism. His area of expertise includes media ownership, journalistic practices, media economics and public policy. Mr. Giroux has also worked for Quebec's ministry of culture and communications.

I will now turn things over to our witnesses for their presentation, after which, senators will ask questions. Mr. Sauvageau, the floor is yours.

Florian Sauvageau, President, Centre d'études sur les médias: Thank you kindly for your invitation. Our presentation is divided into three parts that could be referred to as "Yesterday, Today and Tomorrow." Yesterday because we do not think it is possible to imagine what tomorrow will bring without some sort of look back. Nor is it wise, however, to get too caught up in the nostalgia of the past. The common risk when talking about the Canadian Broadcasting Corporation — especially for those of us who are older like me — is to dream of what it used to be like, to remember and, occasionally, to build up that memory, romanticizing what it was. Those days are over, and we cannot go back in time.

The second part of the presentation will focus on today's media landscape, which looks nothing like it used to. Daniel will discuss the aspects we feel are important. And for the third and final part of the presentation, I will make some suggestions to help lead off the discussion and question period, in the hope that our remarks will appeal to your inquiring minds and evoke some questions.

In the days of old, when I grew up with television, frequencies were in short supply. We are going to focus a lot on television. In my humble opinion, public radio is in much better shape than public television, so we will spend a good part of the presentation on television.

In the 1950s, when I grew up with TV, we had one channel. Radio-Canada began broadcasting in Montreal in 1952 and in Quebec City in 1954. There was only a single channel. It was a time of little choice. You watched TV or you went to bed. The program Point de mire, hosted by René Lévesque, is still highly acclaimed today. It came on late at night and was wildly popular, because there was nothing else on. At 11 o'clock, either you went to bed or you watched René Lévesque. Had it been the world of plenty we live in today, things would have been different. René Lévesque's show would have been just as good as it was, but it would only have a tiny audience, because of the huge array of programming people have to choose from at 11 o'clock. People interested in explanations of news events would watch, but all the rest would turn elsewhere.

Above all, however, we should not long for days gone by. Today, there are hundreds of channels. In the 1950s, there was just one channel on TV.

I would like to mention, if I may, what we said about Radio-Canada in a report I did with some colleagues back in 1986, a report that was submitted to the then Minister of Communications, Flora MacDonald. That report gave rise to 1991's Broadcasting Act, which we are still governed by today, despite the fact that the world has changed radically since. In our 1986 report, we recommended extreme caution — at least in Quebec's case — when it came to creating specialty channels. At the time, only a few channels targeting specific audiences, broadcast by Vidéotron, existed; there were just a few specialty channels. We recommended a cautious approach to increasing the number of specialty channels so as not to fragment a fragile market. Now, the anglophone market has dozens of specialty channels.

In the French report, we called Radio-Canada the pantheon of Canadian culture. I would have trouble saying that today. Over the years, I have become much more critical of Radio-Canada's efforts to set itself apart. I believe that public radio is still just as important as it was when it was created in the 1930s, that public television is still just as important as it was 20, 30 or 40 years ago. But I am often troubled by what public radio and television in Canada have become, more so than Daniel, who is much more forgiving than I am when it comes to CBC/Radio-Canada. If you like, we can come back to that later.

Both of us read the transcripts of the evidence the committee has heard so far. You listened to what the witnesses had to say and you asked a lot of questions about Canadian content, inquiring about its relevance. A decision was made in the 1930s — actually in 1929, back when it was just radio. The first of a series of reports on the state of radio, and later television, came out, the Aird report. And one of its findings still holds true today: if Canadians are only ever exposed to American programs, if young people only ever see American images, building a national identity will be impossible. There is a clear connection. And every study that came after echoed that connection. Each study that led to the overhaul of the Broadcasting Act said the same thing: the Aird report, the two Fowler reports — one before the 1958 iteration and the other before the 1968 version — and our report, known as the Caplan-Sauvageau report, which preceded the act that came into force in 1991. All of them echoed the connection between Canadian content, Canadian identity and, I was going to say, Canadian nationhood and democracy. There is a link between that and the public broadcaster. Personally, I would be quite happy to discuss that during the question period, if you like. The country's identity and nationhood are linked to CBC/Radio-Canada.

Today's media landscape, characterized by a plethora of choice, is entirely different, as I said earlier. It is quite clear that CBC/Radio-Canada cannot continue to be the exact same institution it was when it was created, but its underlying objective must remain unchanged. Canadian content is one of the reasons it exists, and later, I will put forward other ideas in relation to Canadian content. So one reason CBC/Radio-Canada even exists is to offer Canadian content.

And now for the second part of our presentation: CBC/Radio-Canada and the new media era.

Daniel Giroux, Secretary-General, Centre d'études sur les médias: We opted to provide you with a few figures to help you understand the changing face of CBC/Radio-Canada and how new technologies are challenging the way Canadian content has been distributed. They are an important consideration mainly because of the act's primary objective, but also because they are further fragmenting audiences, both for CBC/Radio-Canada and others.

We will start off with TV, moving on to radio, followed by new technologies. Let us discuss television.

This first slide shows the proportion of Canadian television programs watched in Canada by the two markets, anglophone and francophone. The light blue lines represent the proportion of Canadian programs watched by anglophones in Canada, and the darker lines represent the francophone market.

The top line shows the figures for all program genres combined. In English Canada, less than half, 44 per cent, of English-speaking Canadians watch Canadian shows, whereas, in Quebec, more than half, 64 per cent, of francophones do. Below that is the breakdown by program genre, but regardless of genre, the proportion of Canadian programs watched is significantly higher in the francophone market than the anglophone one.

The next slide shows the number of specialized Canadian services, which began to skyrocket in the 1980s, as Florian mentioned earlier, and continued to grow into the early 2000s. Since 2001, the number has gone from 61 to 200 plus. That is four times what it was. The number of channels available in English, French and other languages increased by a factor of four in about 10 years, and that does not include foreign channels. The CRTC authorizes the distribution of over 200 foreign channels in Canada. That includes nearly all the American channels, in addition to channels from all over the globe targeting Indian, Arab and other audiences.

Every country is represented by its own channel. Here are some figures on CBC/Radio-Canada's television viewing shares. The first year is 1993. As the darker line shows, Radio-Canada had about 25 per cent of the French market, while CBC had just under 14 per cent of the English market. Since then, both networks have seen their viewing shares drop by half.

In 2012, the French-language network had 13 per cent of the French market, and the English-language network had around 6 per cent of its market. And that is clearly due, not to the different programming offered by the two networks, but instead to increased competition, which fragmented the TV market. The other networks that existed also lost Canadian viewing shares.

Now we will turn to radio and take a look at fairly similar data. The number of commercial radio stations has increased significantly. And I am not referring to community, Aboriginal or student campus radio stations, only commercial ones. Some 200 new private and commercial radio stations have been launched over the course of the 2000s. That represents a 40-per-cent increase.

There have not been quite as many on the French side, but many in the English market. And the increased competition has had the reverse impact on CBC/Radio-Canada's radio tuning shares. Despite the greater number of stations, both the English-language and French-language radio networks have been able to increase their shares over the early 2000s. CBC/Radio-Canada radio, then, has managed to carve out a place in the market and to distinguish itself amongst the rising number of commercial radio stations coming on the scene.

Now, let us have a look at new distribution platforms, the Internet, in particular, but also everything that flows from the Internet, be it mobile platforms, iPads and other tablets, or smart phones. The first slide is a snapshot of the number of hours spent online every week by Internet users in Canada 18 years and older, for the past 15 years.

The change over time is quite significant for both the francophone and anglophone markets. Anglophones spend a lot more time online than francophones do, and that has practically been the case since the beginning. More English-language content is available on the Internet and other similar technologies than French-language content, so francophones still face a language barrier in that regard. Francophones watch more conventional television, whereas anglophones tend to surf the Internet, spending more hours online than the country's francophones do.

A number of video-based distribution technologies have taken off since the mid-2000s, and here are the adoption rates for each type. I will not go over all the numbers, but the adoption rate has gone up in every case, be it PVRs, or personal video recorders — which allow viewers to build their own programing by recording the programs of their choice and watching them when they please — Internet TV, Internet video on cellphones, Internet TV on cellphones, or Internet video on tablets.

All of these new technologies are becoming more and more popular. More and more people are using them, but regardless of the technology, that usage is greater among anglophones than francophones. The next slide shows the figures for Internet TV on tablets and Netflix, which you have talked about during your hearings. Some 20 per cent of English-speaking Canadians report using Netflix on a regular basis to watch TV shows or series.

The following slide lists the same information for audio technologies, which I will not spend too much time on. The same phenomenon can be seen, with some differences. Adoption of these new technologies is happening more quickly among anglophones than francophones, but the trend is still upwards. So there you have a bit of context. Now I will hand the floor back over to Florian for a few last words, and then we would be pleased to answer any questions you have.

Mr. Sauvageau: I want to start by mentioning some important points to take away from Daniel's presentation, some clear trends. He repeatedly talked about the difference between the anglophone and francophone markets, hence the importance of what it says in the 1991 Broadcasting Act. It states, for the first time, that the issues affecting English-language and French-language broadcasting are different and so, too, should be the solutions. The act says that, and I think it is extremely meaningful.

It is clear from reading the transcripts of the evidence that the witnesses have, thus far, focused a lot on the anglophone market, and that is to be expected of English-speaking witnesses. Although the issues they raised do indeed have some impact on the francophone market, they are not exactly the same. There are differences. For instance, Netflix, which Daniel talked about and which the committee discussed previously, has been labelled a threat to English Canada but is nowhere near as strong of a threat in Quebec. That could change, however, when the very popular Netflix series House of Cards, which I think starts up again soon, is made available in French. So who knows what the future holds.

And the other important thing to keep in mind is that, when it comes to new technologies, being able to tell the difference between general trends and illusions is key. What will the Twitter of tomorrow look like? What will the Facebook of tomorrow look like? No one really knows. Young people are said to be losing their taste for Facebook because there are too many adults on it, and they do not like that.

A few years back, international media magnate Rupert Murdoch paid millions for the social network MySpace, the Facebook or what have you of its day. And, today, MySpace is no more; you never hear about it anymore. What will replace Facebook and Twitter tomorrow? No one knows.

Now, before we move on to the questions, I would like to throw out a few suggestions. There seems to be some uncertainty hanging over the public broadcaster. It is not that clear what the current government thinks of it. The message that the government sent in the 1930s bears repeating. We have a Conservative government. In the 1930s, we had the Bennett government, and in the 1950s, we had the Diefenbaker government, which restated CBC/Radio-Canada's importance to Canadian society, to Canada's nationhood.

The Mulroney government was in power when the Broadcasting Act of 1991 came into force. Conservative and Liberal governments alike have always shown support for CBC/Radio-Canada. I think the government should once again affirm its belief in CBC/Radio-Canada — that is the first message that needs to be conveyed — and reconfirm the importance, not to mention, independence, of CBC/Radio-Canada.

CBC/Radio-Canada is not without fault, and the public broadcaster should, in my humble opinion, undergo many a change. The first is to put an end to the corporation's executives' obsession with commercial revenues. With the new reality in hockey broadcasting, the time is said to be ripe for CBC/Radio-Canada to rethink advertising on its airwaves.

I always believed that you had to have a bit of advertising on TV, but now I think CBC/Radio-Canada should give some serious thought to doing away with all advertising. A true public TV and radio broadcaster, like the BCC, is a media platform without advertising. I rest my case. So the Crown corporation should stop being so driven by advertising revenues. I also think it should make some room for creators. Too many bureaucrats and public servants are calling the shots at CBC/Radio-Canada.

Over the years, CBC/Radio-Canada has become a bureaucratic institution where creativity has been hampered within a mammoth government-run corporation. And finally, the mandate of CBC/Radio-Canada should probably be revisited, as should the act — but that is another can of worms. Its traditional mission should be expanded to make the public broadcaster the vehicle for Canadian content, a showcase for creativity and a gateway to current affairs. Canadian content is not enough. We have to ask ourselves: What Canadian content? CBC/Radio-Canada has to become an instrument for development and community engagement.

According to its mandate, CBC/Radio-Canada has to inform, enlighten and entertain. It delivers enough entertainment; no problem there. And it usually does a pretty good job of informing, but the information is not necessarily informed or enlightened. And enlightening, well, that is something else altogether; that means going much further.

A colleague and I recently wrote an article whose title, roughly translated, would be "Seeing it all, hearing it all, and not understanding a thing!" Despite giving the audience the information and showing them everything possible, they will not understand because not enough effort was made to enlighten them. That may be the most important job for CBC/Radio-Canada: achieving a balance between its three missions: informing, enlightening and entertaining.

Thank you.

The Chair: No, thank you. Earlier I mentioned your report, the Sauvageau-Caplan report, but I did not provide a copy to my colleagues. I apologize. I will ask the clerk to provide copies to the members of the committee. Although the report is a few years old, the government implemented a number of the recommendations you made at the time, so it would be useful for everyone at the table to have a copy.

Senator Housakos: Thank you, gentlemen, for that very informative presentation. When you appeared before the Standing Committee on Canadian Heritage in 2007, you said that Radio-Canada could not meet its obligation to deliver high-quality programming to Quebec while working on behalf of francophone communities outside Quebec. You also believe that the broadcaster's mandate should be revisited. Could you please elaborate on that thought and explain how the broadcaster could deliver the same level of quality to francophones outside Quebec? How exactly should its mandate be reworked?

I have a second question. You said that the more advertising CBC/Radio-Canada runs, the less unique it becomes. Could you expand your thought? In what way does a stronger advertising presence diminish CBC/Radio-Canada's uniqueness and effectiveness?

Mr. Sauvageau: Thank you for your questions. I will start with the second one and come back to the first, if I may.

The more advertising the public broadcaster runs, the more it depends on ratings; and the more it goes after ratings, the more it competes with the private sector. The more it competes and the more it goes after ratings, the more its programming will look like the private sector's.

Daniel will disagree with me because he believes CBC/Radio-Canada is different from the private networks. Me too, for that matter; I do not mean to say that it is identical to the private sector. But because the pursuit of advertising dollars goes hand in hand with the pursuit of ratings, what ends up happening, especially during prime time, is that Radio-Canada's programs look a lot like TVA's. Not always, but often.

I am not saying that Radio-Canada should do away with a certain genre of programming. In my humble opinion, Radio-Canada should continue to have a presence in all genres, even variety shows and dramas. And sometimes it does quite a good job in that regard.

On Fridays, for example, TVA runs an American program it bought. It is quite cheap to buy American shows, which, by the way, is a huge problem for Canadian TV. Canadian networks can buy American shows for less than it costs to produce a show in Canada. Back to what I was saying, then. On Fridays, TVA airs a dance show that attracts a huge audience, and it no doubt makes a tidy profit given what a bargain it is to air a dubbed American program. And at the same time over on Radio-Canada, the network is airing an original variety show that features Canadian talent but has lower ratings. In that case, I do not see any problem, because despite the lower ratings, Radio-Canada is doing its duty of promoting Canadian creators and thus Canadian content.

Now for the problem with advertising.

For a long time, I believed in setting an advertising threshold, so, for example, advertising revenue should not represent more than 20 per cent of the network's overall television revenues. Today, I am not so sure, but I think we really need to have a country-wide debate on the matter.

To your first question, the issue of francophones outside Quebec versus those in Quebec has always been a huge dilemma for Radio-Canada, one that has sparked and continues to spark major political debates. Radio-Canada's mandate is nation-wide, meaning it must serve Quebec as well as francophones outside the province. Quebec represents 90 per cent, perhaps 95 per cent, of Radio-Canada's audience. For example, it might make a lot of sense for an English-language news program like The National, whose audience is Canada-wide, to kick off the evening news with a story about the premier of British Columbia or Alberta. If, however, Radio-Canada wants to be relevant to Quebecers and Ms. Marois and Mr. Couillard happen to get into a huge debate in Quebec's National Assembly, something that would not necessarily interest the rest of the country, Radio-Canada has to cover the Marois-Couillard debate. Today, efforts are being made to rectify that kind of problem with regional news and national news coverage. Thanks to technology, it is possible to fix that sort of problem, which should diminish in the coming years, especially because francophones outside Quebec will probably have their own channel.

Senator Housakos: I would like to get your opinion on something I find perplexing. How does TVA, a network that receives no subsidy, manage to make money and get higher ratings than Radio-Canada despite the fact that it does receive a subsidy?

Mr. Sauvageau: Because TVA does not have to fulfill the same mandate or obligations that Radio-Canada does. One of the things CBC/Radio-Canada has to do — which it does quite well, for that matter — is provide a Canadian outlook on the world. TVA has one foreign correspondent, in Washington. CBC and Radio-Canada have a network of correspondents around the world. If we want a Canadian viewpoint on international affairs, if we want to have a national foreign policy and if we want Canadians to understand that policy, they need to understand that the global issues facing Canada are not the same as those facing France or the U.S. If our international news comes to us through NBC, CBS or ABC, we adopt an American outlook on the world. And all of that comes at a very high price.

You mentioned francophones outside Quebec. TVA does not have any reporters outside Quebec. Radio-Canada has offices and reporters in every single province in the country. All of that costs a fortune and is not a profitable endeavour. No advertising dollars come from having a correspondent in Moscow or an office in Vancouver.

Mr. Giroux: Radio-Canada produces other kinds of programs that would never be shown on TVA. One example that comes to mind is an excellent hour-long science program that comes on every week. In prime time during the week, Radio-Canada devotes two hours to public affairs programs like Enquête. It also airs shows aimed at consumers during prime time. Radio-Canada takes more risks when it comes to new series, more innovative and creative programming, new ways of doing things and new ways of putting dramas on television. And doing all of that costs more, but it is Radio-Canada's job to produce those kinds of shows. And that is why TVA makes money while Radio-Canada spends the money it is given. Radio-Canada brings in fewer advertising dollars than TVA does.

Senator Verner: You already answered some of my questions. I live in the Quebec City area. You have no doubt heard about the "montréalisation" of Radio-Canada's news coverage. My question to you would be this. Is there a way for CBC/Radio-Canada to serve the interests of both big cities and outlying communities? I think my anglophone counterparts experience the same thing in their provinces. I gather from what you said that, because of new technologies and the recent focus on regional news coverage, people who listen to or watch Radio-Canada are going to feel a greater sense of inclusion when it comes to news coverage.

Furthermore, when I look at the data from the CRTC, I get the impression that, as far as revenue and ratings go, Radio-Canada will fare better than its English-language counterpart, CBC. With the Crown corporation's shift towards multiple digital platforms, which of its two networks will make out better in the future? Will it be the English-language network or the French-language one? It is our understanding that the English-language network is under a greater threat than its French-language counterpart.

Mr. Giroux: I would say the French-language network is somewhat safe, regardless of the method used to distribute or access content. Radio-Canada's content will always draw a larger audience and resonate more in the francophone market than CBC's English content will among anglophones. At least that is the case on the television side, where CBC faces tremendous competition from the U.S. Often, people see little difference between Canadian and American culture. We have big Canadian stars who make their careers in the States. But Quebec has its own set of stars; the people recognize their actors and authors. That keeps people tuning in and maintains their appetite for made-in-Quebec content. That is truer of Quebec culture than of its English-language equivalent.

Mr. Sauvageau: I would like to add one or two things to what Daniel said. What he said is true. The French sector has always been privileged because of the language. Owing to the language barrier, people who are not bilingual do not watch television or listen to the radio in English.

I am not trying to predict the future, but I think that young people are much closer to English language products than we used to be. I am not passing judgement here, but I would like to see what the situation will be with the new platforms in 20 years' time. I know that the few young people I associate with are very exposed to anglophone products.

In addition, the Internet has opened up the world to francophones in their own language. If you are interested in French current events and are following the eventful life of François Hollande, why tune in to Radio-Canada when you can have all the details on the website of the newspaper Le Monde, on the websites of other French newspapers and television networks?

Speaking of newspapers, something that neither one of you mentioned is that now, in both English and French, newspapers are competing with CBC/Radio-Canada. For instance, La Presse now provides the same type of information as Radio-Canada on the Internet. It provides videos whose quality is steadily improving. It will be making more and more videos available. La Presse actually recognizes the fact that one of its competitors is Radio-Canada. The newspaper's representatives are saying that one of the reasons they decided not to charge for their Internet content is that Radio-Canada is also not charging for it. They say that Radio-Canada is their competitor.

What will change in the coming years? Perhaps many things will. There are no guidelines for CBC/Radio-Canada when it comes to the Internet. The CRTC decided not to regulate Internet content. Of course, budgets are involved and being present on the Internet is a very good idea. CBC/Radio-Canada made the right decision by establishing itself on the Internet very early. How should multimedia evolve in the future? Whoever has the right answer and knows what will happen going forward will become rich very quickly.

[English]

Senator Plett: Gentlemen, I apologize for being a bit late. I'm not sure how appropriate this question is, but I will ask it.

I'm looking at your graphs here and, being from Manitoba — I'm from Winnipeg — we have some of the largest francophone communities outside of Quebec: the community of St. Boniface in Winnipeg; and the riding where I grew up in and spent most of my life in, Provencher. There are a lot of francophones there. I'm wondering whether your graphs are simply Quebec numbers or whether those numbers would be the same in the francophone communities in Manitoba?

[Translation]

Mr. Giroux: The data we have shared with you is based only on the Quebec market. The francophone market we are talking about is the Quebec market as far as data on viewing goes.

For the Internet, the data provided is for all of Canadian francophones. We are talking about francophones regardless of where in Canada they are.

As for the viewing shares, we are unable to gather data on a national scale that takes into account francophones outside Quebec. The technology does not yet enable us to do that, or to add that data to the Quebec data.

[English]

Senator Plett: I would be interested in knowing some of the other numbers in Manitoba, but be that as it may.

When I look at the numbers, especially the numbers on the Internet, I'm not sure which way is the right way, whether the francophones are losing and the anglophones are winning, or the other way around with the number of hours spent on the Internet, because I'm not sure whether a lot of hours being spent on the Internet is the right way to go.

Since 1997, the spread has gotten larger. Are the francophone people doing more constructive things with their time, such as spending time outdoors as opposed to the anglophones sitting indoors around the Internet? Or what is the reason?

I know you talked about Netflix, for example, so I understand that. There are probably not a whole lot of French programs on Netflix yet, but, certainly, on the Internet that wouldn't be the case. What do you think would be the reason for that?

[Translation]

Mr. Giroux: One of the commonly used reasons to justify that — and this is true — is that Quebec francophones watch more television. So the amount of time they spend watching television is no longer available when it comes to other types of entertainment on the Internet.

I would say that the second reason is the fact that, despite the somewhat abundant French content, there is nevertheless more entertainment in English than in French on the Internet. The language barrier is still a factor, especially among older people whose English is not good enough and who rely on French television for their audiovisual entertainment.

Of course, people use the Internet for emailing and all kinds of other activities. Francophones are also on Facebook, but I think that their use of other types of content — be it videos on YouTube or more television-like type of content — is not as developed as it is in the anglophone market.

Mr. Sauvageau: Daniel could say more about that because he was among the people who directed the study. Our study centre has been following a group of Canadians since 2007 and monitoring their behaviour in terms of information. Do Canadians obtain their information through television, newspapers, the radio or the Internet? The latest survey from 2013 shows that the Internet is exploding in popularity among francophones, as well.

Mr. Giroux: However, our survey covers only francophones from Quebec. Francophones are using the Internet more, but overall, Quebec francophones use the Internet less than anglophones in the rest of the country.

[English]

Senator Plett: You would think that the gap would get closer because, obviously, the young people are getting more adapted to using the Internet. Nevertheless, I appreciate your answers, gentlemen, and thank you for being here.

Mr. Sauvageau: Senator, as you are from Manitoba, I would like to add something, if you don't mind.

We have a colleague in Winnipeg. Yes, this is a commercial for our colleague in Winnipeg. He does very interesting studies on this topic, on the place of CBC/Radio-Canada in the new media environment. His name is Kenneth Goldstein. I suggest he would be very useful to your committee.

Senator Plett: Thank you, sir, for that, and we are planning a trip to western and northern Canada. I'm sure that if you would send us that information through the clerk, we would certainly want to have him possibly as a witness when we are in Winnipeg next month.

[Translation]

The Chair: Thank you for the commercial. You are doing us a favor. Senator Eggleton, go ahead.

[English]

Senator Eggleton: You have advocated for the reduction or perhaps elimination of advertising revenue for CBC/ Radio-Canada. How would they make up that loss of revenue?

[Translation]

Mr. Sauvageau: They would have to make do with less. I would send them to people they can talk to; on January 6, The Globe and Mail published an excellent article by Barry Kiefl, former director of research at CBC. In that article, he provides a very good explanation of how CBC could be relaunched as a true public broadcaster and how the advertising revenue is basically not as important as people say it is.

[English]

It is called, "CBC's future should look like its radio past."

[Translation]

In the figures Daniel provided earlier, you see that radio is doing proportionally better than television, both in English and in French. And we may wonder whether one of the reasons radio is doing so well is because, until very recently, advertisement was not part of the broadcasts. Radio is much more distinct.

[English]

The main characteristic of the public service broadcaster should be its distinctiveness. This is the main characteristic. Radio is distinct and specific in Canada. Television is not as much so as radio, and the reason is probably commercials on television and no commercials on the radio.

[Translation]

I personally think that the decision to have commercials on Radio 2 and Espace musique is a big mistake.

[English]

Senator Eggleton: Aside from the government contributions to CBC and Radio-Canada, I wonder if there are any creative new ways of dealing with the revenue issue that we could learn from other countries, for example, how the BBC in the U.K. is financed. Is there any merit in looking at any other models to help increase revenues and make the CBC a little bit less dependent on annual government budgets?

[Translation]

Mr. Giroux: We could probably learn from what is happening elsewhere. In a number of countries, the states' or communities' contributions are set in advance and fluctuate, not based on the government's wishes, but based on a more independent source of revenue that has to do with the number of television sets in households. That may not be a mechanism that can be applied now, but contributions would fluctuate based on a source of revenue that is independent of government dissemination.

I would also like to point out that CBC/Radio-Canada's services in general, on a per capita basis, receive the least funding in the public radio and television realm in the world. The government's contribution to the funding of CBC/ Radio-Canada's radio and television services — even though they are provided in both languages — is very low compared with BBC's services and the funding BBC receives to produce its programs.

Mr. Sauvageau: A few years ago, the Juneau Report suggested that distributors contribute to CBC/Radio-Canada's funding, but that report's recommendation was never seriously discussed. There was a leak, and the recommendation was sabotaged before it was even publicly discussed.

That may be something to consider. However, Daniel mentioned what is being done in England, among other places. I do not think that a license fee can be applied in Canada because people would complain. The English are used to that. Historically, they have always paid a license fee on their radio and television sets.

So if a decision was made tomorrow to impose a tax on anyone who buys a television set, the reaction would be very negative, and I cannot see a government imposing such a tax.

[English]

Senator Eggleton: My final question deals with Netflix. Should they be contributing to Canadian programming? We have content requirements for CBC/Radio-Canada and the other broadcasters, but, of course, that doesn't apply to Netflix. I think the CRTC previously ruled that it shouldn't apply to Netflix because they were just a vehicle for programming that they did not create. Now they do create. You mentioned the show House of Cards and there's other programming they now create.

It may be impractical to suggest that they have Canadian content for the programming that comes into this country through whatever server on the Internet they're using, but maybe they should be making a monetary contribution to Canadian content programming. What do you think of that?

[Translation]

Mr. Giroux: There is a major obstacle in terms of success if Netflix does not comply with the relevant conditions imposed on it. How would those conditions be imposed? Would Netflix's Internet content be blocked? It would be very difficult to block that access and, as Netflix becomes an increasingly large part of history, all the Canadian production funding rules for broadcasters would be involved, as other broadcasters would also claim that they should not have to contribute as much faced with that type of competition.

So, in a few years, there is a major risk of an imbalance between the burden imposed on producers established on Canadian soil and a foreign company that can enter — and I think it is difficult to prevent their entering — and broadcast Canadian programming without any restrictions.

Mr. Sauvageau: I think that Mr. von Finckenstein did a good job of showing how difficult it would be to force Netflix to contribute to Canadian content. In a perfect world, that should definitely be done, because, as we explained, there truly is an imbalance between Canadians who have to contribute and those who do not. But how can that be done? This is where things get complicated.

At the same time, there is another issue with Netflix. Twenty years ago — and I am definitely not claiming to be a prophet — I said that we would eventually no longer watch television networks but rather television programs. We are now at that point where networks may become obsolete.

Owing to the realignment of advertising revenue, general interest television networks — like newspapers a few years ago — may become less profitable because the money is going elsewhere. Specialized television channels have been popular for a few years. People are buying shows and like to have the complete series. Young people in particular no longer want to wait until next week to know what happens on their favorite show. Netflix lets them buy the whole series. That is where the money is going.

If we want to ask bold questions about CBC/Radio-Canada, we can ask whether it should not become mainly a production company. Should it not stop distributing, except in the case of information? Information networks should continue to exist, but otherwise, is the future not in the production of shows that are distributed and sold in all kinds of ways? The corporation could have agreements with Netflix to sell programs and could deal with independent companies when it comes to production. CBC/Radio-Canada would be reinvented as a huge production company.

The idea may seem a bit far-fetched at first, but it may not be as improbable as all that.

[English]

Senator Greene: Thank you. I appreciate your presentation. You provided us with information and numbers that we haven't had before, so I appreciate that very much.

I would like to ask you some questions about your presentation. On your graph and chart, which in English says CBC/Radio-Canada viewing share television, in 1993, you've got 24 per cent of francophones watching, then, in 2012, you've got 12.5 per cent, or roughly a 50 per cent decline. In 1993, in English, it drops from 13.5 per cent down to 6.4 per cent, also roughly a 50 per cent decline. It seems that both English and French are declining at the same rate at the present time.

Then, when we look over at the other graph, which is adoption rate of various video technologies in Canada and we look at Internet TV, for example, we have an increase in that for both French and English, rising at roughly 50 per cent. I thought the two languages seemed to be tracking each other fairly closely.

By the same token, in 1993, Canadian taxpayers contributed roughly $1 billion to the CBC, and that has been the same all the way through the time period. It is true today, as well, while viewership has been declining.

As experts and people who watch the media, how long do you think that can continue? I was just wondering if you have ever extrapolated beyond 2012 to 2020 to imagine the impact of technologies and to see where viewership on traditional platforms will end up.

[Translation]

Mr. Giroux: We are not prophets, and we do not risk making those kinds of forecasts, but if you look at the table on CBC/Radio-Canada's market shares that you mentioned, it is true that the figures have dropped by 50 per cent in both cases. However, since around 2007, viewership has stabilized somewhat both for the French and the English networks. So you may think that the viewership, in both cases, reached a certain threshold, and that the previous shift can be attributed to increased competition, but that CBC/Radio-Canada has now established a certain audience, which is remaining steady despite an increase in the number of networks. That increase does not contribute anything to CBC/ Radio-Canada, but it does not affect its viewing shares as much as it did in the beginning either.

So, the new networks will seek viewership elsewhere, amongst themselves. Perhaps they will share the viewership they were sharing already to a lesser extent. However, I believe that a certain threshold has been reached.

Now, with the Internet, all that may be jeopardized. Of course, CBC/Radio-Canada's products will be consumed differently on the Internet, but that also involves more competition from other sources.

Mr. Sauvageau: What role will social networks play in the future? We do not know exactly, but we may wonder what role a public service such as CBC/Radio-Canada has when it comes to social networks. What role should CBC/ Radio-Canada play in matters such as interactivity?

In an interview he gave at the beginning of the Olympic Games, the president of CBC/Radio Canada said that the content was no longer sufficient, as interactivity was gaining in importance. It is true that interactivity is becoming increasingly important, but what does interactivity mean? What does people's participation on a public network mean? Does that entail doing the same thing as the private sector and having a list of all the comments for every article or does it mean inventing a totally different way for the public service to participate in interactivity?

If we link together this, the public service, interactivity and the idea of enlightenment —

[English]

— enlighten. How do you enlighten on a social network? That would be a good question for CBC management.

Senator Greene: Thank you, I agree. I'll ask that. One more question with regard to your numbers.

In the graph of CBC/Radio-Canada viewing share television, does that include the specialty channels like CBC Newsworld, et cetera, or is it just the main CBC and Radio-Canada channels? It's all included? Okay.

[Translation]

Mr. Giroux: That is the main network, the state network.

The Chair: Mr. Giroux, you said earlier that it was easier to be an analyst than a prophet. The last question will come from Jacques Demers, the committee's analyst.

Senator Demers: Good evening, gentlemen. I worked for Radio-Canada in the past, so I have nothing against the corporation; on the contrary. The competition is huge. Let us consider the possibility that, in four years, there would no longer be any hockey in English on CBC. Let us say that the government provided a billion dollars or even slightly more, that the viewership was a bit lower — since it has of course dropped — and that the government decided to apply budget cuts, as has been the case across the board. What do you think CBC/Radio-Canada's future over the next five years entails?

Mr. Giroux: I am more familiar with the French CBC network, Radio-Canada, which has very important roots within the francophone population. It is successfully providing innovative content with fairly high rates. I am thinking of dramatic programming such as Unité 9 and 19-2. Unité 9 is about something that has never been covered on television, and 19-2 presents images and time in a completely different way. The idea behind it was not quickness, but rather reflection. The Radio-Canada network, provided there are no major cuts — even though they are being planned despite everything — should maintain its market share, while remaining relevant and continuing to positively influence the francophone culture in Canada.

Mr. Sauvageau: Senator Demers, I personally think that CBC/Radio-Canada's future primarily rests on a political decision. What will the political authorities do with CBC/Radio-Canada? We need — and I will say something fairly brutal here — a new piece of legislation on broadcasting, but I fear a new law on broadcasting voted by the current Conservative Party. I am afraid that move would reduce the role of the network, which I think is still this country's most important cultural institution.

The political decision confirming CBC/Radio-Canada's importance should lead to the appointment to the corporation's board of directors of people who are very familiar with the issues we are discussing today. The CBC board of directors should not consist of friends who are owed favours. Competent people should be appointed.

My dream is to have someone like Robert Lepage on CBC/Radio-Canada's board of directors. In addition, the corporation's management — and I am going back to what I said — should be much more open to creativity and spontaneity, and provide its creators with much more freedom in content creation. I do not want to talk about CBC/ Radio-Canada's content, as that is its own business. I reread what Mr. von Finckenstein said, and he is absolutely right that CBC/Radio-Canada reports to too many entities. You have the Department of Canadian Heritage, the CRTC, the Access to Information Commission, parliamentary committees, senatorial committees, and the list goes on. There are too many cooks in the kitchen in this case.

A clear mandate should be established, and competent individuals should be appointed to the management, the board of directors. Then they should be allowed to do their job. If that were done, CBC/Radio-Canada would have a future.

Senator Demers: Mr. Sauvageau and Mr. Giroux, you have given us an honest answer. You did not beat around the bush. Thank you very much.

[English]

Senator Greene: I have one final, open-ended question. If you were running the CBC right now and the board of directors asked you to get back its former audience, what would you do?

[Translation]

Mr. Sauvageau: Perhaps Daniel would like to add something to this, but I would repeat what I said when I first spoke. We should not be nostalgic over the past. We cannot dream about reproducing a situation where there were one, two, three television channels, or about having the same viewing shares in the current universe. That is impossible. CBC/Radio-Canada must accept lower television ratings. The current viewing shares of 6 per cent or 12 per cent may be excellent results for the network in today's world.

CBC/Radio-Canada must anticipate viewing shares in the context of potential shares with regards to the program. If you have a science or religious program — such as Second regard on the French network Sunday afternoon, or a program on agriculture and the environment such as La semaine verte — you cannot expect to have 2 million in ratings, but if the anticipated rating for a religious program is 200,000 people and the program draws 190,000, the result is great. It is a success. That is how viewing shares should be looked at, based on the type of program, the mandate and the mission. We should consider the past, but not too much. We should not be too nostalgic.

Mr. Giroux: I would say that CBC/Radio-Canada should also remain a showcase of Canadian programs. That is what the network is, and it airs more Canadian programs than any of its competitors during peak times. CBC/Radio-Canada airs more Canadian programs than any other network. That is part of its mission. That may partially be the cause of the lower ratings, but I think the trade-off is good if the network can provide Canadians with content they can relate to. Of course, Canadians choose what they want to watch, but at least they have an option to watch quality programs produced in Canada by Canadians that reflect their values, views and lives.

[English]

Senator Mercer: Thank you for your presentation. It has been excellent.

You raised the issue a moment ago about not being nostalgic, but I wonder if you agree that the yardstick we use to measure success today has got to be a lot different from the yardstick we used in 1984 when you were in an environment with only a few channels. Now we're in an environment where there are 120 channels.

There are people who are criticizing the fact that CBC/Radio-Canada only has a certain percentage, and your charts confirm it. That may be a good percentage of today's market, but if we measured it in 1984 we certainly would not have been pleased.

Is that an accurate statement?

[Translation]

Mr. Sauvageau: Absolutely. You are totally right and I fully agree with that. We cannot expect the same results given the current number of networks. That is absolutely correct.

The Chair: I promised to let you go after an hour and a half, but I will nevertheless ask you the last question. Earlier, you opened the door to discussing Canadian nationalism and CBC/Radio-Canada's role. I have to quote you in English — and this comes from your report — when you talked about Tardivel and said the following:

[English]

Nationalism in Canada is a beautiful theory, but it is nothing but a theory.

[Translation]

Is that what you meant when you referred to nationalism?

Mr. Sauvageau: Was that in our report?

The Chair: Yes. You quoted the nationalist author Tardivel.

Mr. Sauvageau: Yes, I understood. Today, in any case, I did not say the word "nationalism." I made a connection between "Canadian content," "identity" and "nation." However, in the same report, we explain that there is also something specific about the French network. That is why I was saying earlier that the provision from the Broadcasting Act whereby the two systems must be different is also very important. That is because Radio-Canada also played — and this is a whole other debate — a key role in establishing Quebec's identity in the 1950s and the 1960s. A seminar was held last year on that topic at the Museum of Civilization. I will send the clerk a copy of the book on the role Radio-Canada played in the building of the Quebec identity. But that identity is part of the Canadian identity. Until there is evidence to the contrary, Quebec's identity is a component of the overall Canadian identity.

The Chair: I will wrap things up with a comment by Ian Morrison, who appeared before the committee a few weeks ago and said that managing CBC/Radio-Canada was akin to trying to manage BBC and the French RTF network from Belgium. It is a fairly difficult organization to manage.

Once again, thank you for participating. I am glad I ran into you and thought of inviting you. I ask that the senators remain here for our in camera meeting.

Mr. Sauvageau: Thank you for inviting us. Answering your questions was very interesting.

(The committee continued in camera.)