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Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 7 - Evidence, May 8, 2001

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OTTAWA, Tuesday, May 8, 2001

The Standing Senate Committee on Transport and Communications, to which was referred Bill S-7, to amend the Broadcasting Act, met this day at 9:35 a.m. to give consideration to the bill.

Senator Lise Bacon (Chairman) in the Chair.

[English]

The Chairman: Today we will discuss Bill S-7, to amend the Broadcasting Act. We are pleased to have appearing before the committee the Honourable Sheila Finestone, P.C., the sponsor of the bill.

Please proceed.

Honourable Sheila Finestone: Thank you very much for the invitation to appear on the amendment to the CRTC act. I appreciate the presence of my colleagues.

The purpose of Bill S-7 is to amend the Broadcasting Act. The summary of Bill S-7 states that this enactment amends the Broadcasting Act in order the enable the Canadian Radio- Television and Telecommunications Commission to make regulations establishing criteria for the awarding of intervenor costs.

The Telecommunications Act presently has a procedure for awarding costs. This procedure is defined under its rules of procedure. Under the existing rules of procedure of the Broadcasting Act, there is no section for cost awards. Cost awards are clearly defined by the CRTC under its rules of procedure. The commission determines whether the intervention was worthy of consideration for such a cost award. Intervenors also have a right to request an exemption when presenting before the CRTC.

Second, this bill affects the Canadian Association of Broadcasters members who are non-profit by their definition - though that is a different definition than you and I would normally use. The 600 members of the Canadian Association of Broadcasters include the large corporations with which we are familiar today. They represent a $4-billion industry and they employ more than 30,000 Canadians. They invest close to $1 billion per year, generating thousands of hours of Canadian programming. Most importantly, members of this industry touch the daily lives of all Canadians.

We can be proud of our broadcasters' efforts to promote Canadian content and to provide Canadian consumers with good programming. At the same time, there are undertakings and situations today that are far different than they were in the past. The world of broadcasting and telecommunication world is a world of convergence at this given time.

We must keep that important fact in mind because consumers are directly impacted by the decisions taken by the CRTC. It is hard to separate the telecommunications part of it from the broadcasting part.

Under telecommunications, intervenors who have shown knowledge and understanding and who bring substantial information to the hearing do get awards. Whereas people from the broadcasting side at the same time to speak to these converging issues, which are very much in the interest of consumers, do not get any kind of awards.

It is very expensive to come up against a $4-billion industry that has $1 billion in annual revenues. That industry has a raft of good, qualified lawyers. Meanwhile, presenters from organizations such as the Public Interest Advocacy Centre or the Consumers' Association of Canada may have difficulty finding the kind of finances that are required to intervene.

It is important to remember that there is tremendous consumer impact on hearings on the broadcasting side. In this era of transparency and openness, the voices of consumers should be heard. Their views should be considered if they bring significant information before the CRTC and the Commission judges that their views have been important in the hearing.

There is one significant area that requires further elaboration and it is this basis for the amendment that I am advancing. Consider the following: Under sections 56 and 57 of the Telecommunication Act, the Canadian Radio-Television and Telecommunications Commission, which I shall call the CRTC, has the power to compensate the organizations or individuals appearing before it during proceedings on telecommunications. Conversely, the Broadcasting Act does not envisage such provisions. Consequently, the CRTC has no power to either award costs or establish the criteria of awards under such an act.

This discrepancy between the two acts has created imbalances and inequalities. At CRTC broadcasting hearings, on the one hand, we have powerful and well-funded representation by corporations, while on the other hand the voice of the civil society is not heard. Substantive and effective participation by consumer organizations representing the interests of citizens is often hampered by financial limitations. I should qualify that to say they are heard but that they are not heard to the extent that they would like. There are financial implications that they cannot support, therefore they do not appear as often as they should in the interest of the consumer. You and I pay a monthly fee to our television and cable service people, and our voice should be heard. These imbalances and inequalities are inconsistent with our democratic system.

Why is it essential to amend the Broadcasting Act? This amendment will bring the Broadcasting Act into concordance with the Telecommunications Act, and it will bring into symmetry and balance both acts. Thus, the consumer will be fairly and equally treated in all proceedings before the commission whether conducted under the Broadcasting Act or the Telecommunications Act. With rapid changes in technology, there is a blurring between broadcasting and telecommunications per se. It is hard to distinguish where one begins and the other ends.

This amendment will be beneficial to the Canadian public, as costs awards will allow consumers and public interest groups to represent effectively the interests of citizens in broadcasting and cable television policy, and regulatory proceedings. The pass-through costs awarded are passed on to the consumer as monthly payments for their subscription to television services, Web and international services. Consumers should be allowed to express their opinion.

This amendment is strongly supported by consumer groups across Canada, as they are aware that it is important that corporations and consumer groups both be present and have equal representation under the Broadcasting Act. Many of these issues touch them and determine the cost of their subscription. It is also good for business plans, so we are talking about both the consumer and corporate business.

This amendment does not affect the existing CRTC rules of procedure for cost awards. Under the existing rules, any party may ask the CRTC for an exemption to pay intervenor costs based upon a valid rationale. The CRTC will examine requests on an individual basis, and if it judges that there are sufficient grounds, it will grant the exemption. As well, the CRTC will examine intervention requests and judge whether the input is relevant to the case and helpful to the process, in which case it will grant the award. The criteria for evaluations are already established in the Telecommunications Act and it will be up to the CRTC to determine if they are appropriate to the broadcasting side.

This amendment does not interfere with the CRTC cost award process. It has been historically proven that the CRTC cost award process is multi-staged, non-punitive, fluid, adaptable and varies according to circumstances.

This amendment will ensure that individuals or groups that are or may be directly affected - economically culturally, socially, educationally, environmentally or linguistically - by a program or project under review by the CRTC have reasonable opportunity to review information submitted by the applicant and other parties; to provide evidence relevant to the application; when appropriate, to cross-examine persons submitting information relevant to the application; and to make arguments before the CRTC regarding the project.

This amendment will ensure full adherence to the Broadcasting Act of 1991. Section 3 of the Broadcasting Act reads:

The Canadian broadcasting system should:

(i) serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada,

(ii) encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity ...

(iii) ... serve the needs and interests, and reflect the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of aboriginal peoples within that society ...

Buy-outs and cross-ownership in broadcasting have created new monoliths, the so-called "media giants." Plurality of information is decreasing while, at the same time, no voice is being heard from the civil society. Who will protect and defend the desires and aspirations of Canadian men and women, the Canadian population, the listening and watching group? Who will protect the rights of the consumer or underscore the pluralistic and multicultural nature of our society?

It is clear that the CRTC's mandate is to:

maintain a delicate balance - in the public interest - between the cultural, social and economic goals of the legislation on broadcasting and telecommunications ... to ensure that programming in the Canadian broadcasting system reflects Canadian creativity and talent, our linguistic duality, our multicultural diversity, the special place of aboriginal people within our society and our social values ...

At the same time, we must ensure that the CRTC has access to educated, well-researched and pertinent information in order to maintain this delicate balance while making equitable decisions for the business community.

This amendment is one more exercise in democracy that I believe we must undertake. This amendment will preserve and defend our principles and values by reconciling the interests of all parties and by assuring that all voices are heard in the decision-making process.

I would ask you to perhaps circulate this document from the CFTPA, which is a huge organization. It is their plan 2001. It would be interesting for us to look at what they have put forward. It is called "Fair Play in the New Media Jungle." Their action plan reflects new realities that demand new strategies. Madam chair, they are looking at vertical integration and consolidation. They are looking at regulation that is now deregulation, traditional and new media - which are melding, trade and ownership issues that are looming, and the marketplace, which is increasingly global. We have to change with the times. I think the consumer must have his voice and her voice heard at that time.

The Chairman: Thank you, Senator Finestone. Do you have a copy of that we can circulate?

Senator Finestone: I hope that you all received a copy of my remarks and background.

The Chairman: As per the Telecommuications Act, would you know the percentage of requests that is accepted?

Senator Finestone: Of intervenors? Yes, I do know. I just have to find it.

The Chairman: And the awards granted. Is there a known percentage?

Senator Finestone: There are very few on the telecom side. The amounts awarded per application have varied from $700 to over $300,000 in very large and complicated and many-day hearings. Total costs awarded per year have averaged, to all intervenors, at about $700,000 in recent years. There is no cost on the possible award per application or on the total per year. This is a presentation that was given and that you will all be receiving from Canadian Heritage on broadcasting policy.

The Chairman: A copy of this document was sent to senators' offices. Perhaps there is no percentage.

Senator Finestone: I do not think I have percentages. I have some historical evidence on cost awards, and I must thank Terrence Thomas, who prepared this document.

Cost awards are modest in amount. In the year 2000, there were 18 costs orders under the Telecommunications Act. There were no cost awards, of course, under the Broadcast Act. Of those, 5 orders were not fixed; the remaining 13 orders totalled $34,354. The average award was $2,642. The range of the awards was from $152 to $5,923. The five awards in which cost was not fixed will be determined by taxation. That means the CRTC will examine and evaluate those presentations and determine what percentage is worthy of consideration for taxation. That term is used because the companies are asked to pay the balance of the cost.

The Chairman: Thank you, Senator Finestone.

Senator Forrestall: I have some general concerns. Recent discussions seem to reflect the view that the Broadcasting Act and the Telecommunications Act might find a far better home, as would some other acts, under the Competition Bureau`s authority. The Competition Bureau moves more quickly and this awards issue would not create a problem under the rules of that body.

I see your point, but we are moving towards changing this great thing out there. Is this bill not perhaps a little premature? In my opinion, we should wait and see what happens in the next year or two.

I appreciate the concern reflected in this amendment, a concern to ensure fair compensation for people who come forward with legitimate concerns under both the Broadcasting Act and the Telecommunications Act.

Speaking in a general way, affected intervenors puzzle me a little bit. An individual can be granted intervenor status at a hearing. They come to express their concern. The presiding authorities in their wisdom deem that, yes, the individual is entitled to intervenor status, but there are not necessarily any real costs involved in that entitlement. Then there is the situation where witnesses are asked to come and give their views. Those are two entirely different situations. One can be compensated and the other cannot.

Are you trying to catch all those loose ends and bring them together, all the while we are wondering, over the next couple of years, just where we will wind up?

Senator Finestone: No, I am not trying to catch all those little ends. I am merely trying to ensure that you and I, when we go the pay our cable subscription fee, are aware of the fact that our voice of concern and interest has been heard.

I am an anglophone living in Montreal. I want assurance that I will get the English channels as well as the French channels. I want to ensure access to enough Canadian content. I also want to ensure that as all these companies are busy converging and undertaking new responsibilities and new directions, that I, as a consumer, will get the best bang for my buck, if I can put it that way.

How will I be heard? I expect and hope that our views will be presented by the consumer associations, such as Rural Dignity and other grassroots associations that speak for the ordinary person. I know from past experience, that the voices of those consumer groups have been very effective in preventing exorbitant pass-through costs. There is an elastic window of how much the consumer can pay for cable subscription. It may cost 68 cents to access a program on my television screen, but the cable companies have the right to ask for other costs to included or increased. Who will defend me against Vidéotron or Rogers or Shaw or any other cable distribution system?

The consumer organizations will give reasons for why prices should not be as high as the cable companies are requesting. I do not blame business for trying. I think consumers should also try. The CRTC should judge a reasonable cost based on the evidence and the reasoning that they hear from all across Canada.

Canada is a complicated country, senators. If you live along the border, you do not need a cable system. You can get a little antenna, which can be as big as a spider's web these days, and you can pick up everything from the United States. Sometimes the dishes cannot receive Canadian programming. In Whiterock, British Columbia or in the London-Hamilton-Windsor area, for example, it is very difficult to get good, clear, Canadian programming unless you have cable distribution.

Cable availability is important. In some areas, providing that cable service is very costly. Maintenance can also be costly. With the Internet being offered on cable now, the demand is growing. There are myriad issues and I believe it is even more vital today than in the past that the consumers` voice be heard.

Madam Chair, I hope we will hear from witnesses who can more fulsomely answer the question asked by Senator Forrestall.

Senator Forrestall also mentioned the Competition Bureau. I think a highly trained group of board members is required to hear these issues. The Competition Bureau hears everything from railway issues to trucking to aircraft to big business. Broadcasting is a very specialized field; it touches every person, every child. It touches me.

Senator Forrestall: There is always a concern about access. Perhaps 20 or 30 people will come from Ecum Secum to ask why they cannot get television programming without buying a dish and why, when they do buy a dish, they still cannot pick up CBC or CTV. There is such confusion.

We may see a flood of people complaining that they do not have the access they want. They could say: "Why can I not have that kind of access? Why can I not have the right to make my point? Why can I not be an intervenor like that person over there? Why can I not lash out, too? Yes, of course, I brought a lawyer with me."

All of a sudden you see not just the cost a plane ticket, a hotel night and two or three meals, but also 26 hours for legal time. Suddenly, what might have been $300 or $400 or $1,500 or $2,000 becomes a $20,000 item, and the multiplier effect kicks in. I am not exaggerating; we have seen this.

Who would pay for this? Is there a special fund? I believe it is government's responsibility to ensure that people have an opportunity to express their views. Would the funds come from licensing fees? How do you envision it? Do you have any idea what it might cost? That is a very difficult question, and I understand if you do not know how much it might cost. The more important question is where the money would come from.

Senator Finestone: You have asked a number of questions, senator. First, I mentioned that there are serious rules of procedure are defined under the CRTC, and it is their responsibility to assess whether or not the intervention was frivolous or if the intervention did not have great merit. I had a list of the three or four qualifications that you must meet and I cannot put my hand on it right now. You can get that from the CRTC. I believe they will be appearing as witnesses. The CRTC has the right and responsibility to ensure that the intervention added to the decision-making possibility and enlightened them in the course of their deliberations.

The Chairman: I do not want to interrupt, but you might want to look at the first page of the notes from the Library of Parliament.

Senator Finestone: On the first issue, I would not call the intervention frivolous if someone complained that they could not get CBC. I would complain if I could not get CBC, because that is important. On the other hand, perhaps there is a technical reason, and that could be determined independently.

Senator Forrestall: It is all dollars and cents.

Senator Finestone: With respect to how it is to be paid, that funding is the responsibility of the CRTC. It could be a tax from the corporations that are appearing before them. The revenue that is raised by the CRTC and passed over to the Consolidated Revenue Fund is quite significant. There is substantial money that goes beyond the cost of operation. If these are cost-recovery funds, I question whether or not cost-recovery funds should also be fundraising funds. I do not think they should be profit. However, that is up to the Treasury Board and the Consolidated Revenue Fund and the CRTC to negotiate. Funding is not my concern.

I attended many hearings on broadcasting and telecommunications when I was a critic 100 years ago in another life. I recall small groups coming in which had raised money on their own. They certainly did not come and spend three nights in three different hotel rooms and present a $20,000 bill. There is no way they could get paid on the broadcast side anyway because there are no rules at the present time. They came and said what they had to say and went home.

Senator Forrestall: I was suggesting that what you are suggesting here would open the door for that to happen. If I thought I could recover my costs, I would take every advantage and best prepare myself, even if that included hiring counsel. Counsel, in their wisdom, could think "Here is five days' work. I will review the briefs, and spend two days in Ottawa. Here is my bill." It would encourage that.

I am not complaining about that because if I have learned anything in 40 years here in Ottawa, I have learned that the more you talk about an issue or policy, the stronger it becomes. The fewer loopholes to be found, the greater the strength. The harder and the more vicious the attack, the stronger it becomes. No one that I have met, so far in my years here, has ever been right the first time. I welcome it. I am not in any way rejecting it, because the best ideas in the world can be improved upon when they are exposed to other minds and debated. I have no objection to it.

Thank you very much. I wish you well in what you are trying to do here.

Senator Finestone: Thank you very much. I wonder, Madam Chair, if I can put on record the actual definition of the manner in which the CRTC panels can make a decision to determine how much they should award as cost. In the case of legal counsel, they determine an hourly maximum range from $115 to $230 per hour, depending on the counsel's completed years as a practising lawyer. I would presume it would also depend on whether or not the counsel has given the kind of input that they require.

The eligibility criteria that enable the intervenor to be eligible for a cost award are as follows: The intervenor must have, first, an interest in the outcome of the proceeding of such a nature that the intervenor or group or class of subscribers will receive a benefit or suffer a detriment as a result of the order or decision resulting from the proceeding. Second, the intervenor should have participated in a responsible way. Last but not least, they should have contributed to a better understanding of the issues by the commission. They are subject to questioning by both the commissioners and the groups that have come before the commission asking for changes of whatever nature.

I believe that the CRTC has been responsible in the way they have set it up under telecommunications, and I presume they would set their regulations based on what would be needed on the broadcast side. I would suggest that there would be many more intervenors on the broadcast side than there have been on the telecommunications side. Telecommunications is highly technical and much more complicated.

Senator Fitzpatrick: I would like to know more about the criteria for awarding costs or what the valid rationale would be. I am not so much concerned about abuses that could take place, as Senator Forrestall has suggested - although I do not rule that out. My concern relates to how it will affect regional representation depending upon where hearings are held and depending upon the ability of people from rural areas or the far reaches of the country to get to the hearings, and whether or not they would be treated on a fair and reasonable basis. It would be much more difficult for someone from Dawson Creek, for example, to get to Ottawa for a hearing than it is for someone from Ottawa or Vancouver.

The criteria that have been set out here are pretty general. If we invite intervenors or give them have an opportunity to make an intervention, they should know what those rules are so they can determine whether or not they are qualified or can be qualified to make an intervention. I realize they have set out what the rates would be for the lawyers, but it does not set out the number of hours or where the lawyers would come from or where the individuals who want to make an intervention would come from.

I applaud the purpose. However, if we are to encourage people to have their say - particularly people from the rural areas - they had better know how to get there, what it will cost and what the risks are with respect to recovering those costs.

The Chairman: Before you answer, clause 2 of the bill talks about establishing criteria for the awarding of costs. So the criteria would be established prior to any awards being granted.

Senator Fitzpatrick: I appreciate that, but I think people should know generally, or even more specifically, what the criteria are so they can consider whether they want to apply to intervene.

Senator Finestone: That is a valid question. The CRTC puts out a well-defined public notice in advance of their hearing date. Those in the industry know about it. Interested consumers are advised about it. I doubt that there would be a flood of groups asking for cost awards.

Expectations can be clarified by calling the CRTC. They will provide a three-point list to help an intervenor prepare for the hearing. I am sure there is a definition of each intervenor's entitlement.

That is a good question to ask of the CRTC. It is difficult to estimate the number of applicants and the potential costs. Looking to the past, we know that, in 1997-1998, the CRTC processed 1,379 applications relating to television, radio, cable, pay and specialty television undertakings. Those included new license requests, license amendments and renewals, applications to transfer ownership control, and cable rate filings. They also issued 658 broadcasting decisions and 143 public notices. Cost awards were not available for any of those hearings.

They also processed 2,124 telecommunications-related applications in addition to holding hearings. The CRTC issued a total of 1,912 telecommunication decisions, public notices, orders, cost orders and taxation orders, and a total of 15 taxation cost awards in that year. That is an amazing amount of work and perhaps a another indication that the CRTC should remain separate, rather than being moved under the Competition Bureau.

That workload can change from year to year. The board also travels and I believe they could appear here. The CRTC is an itinerant regulatory board; they do go to different parts of the country and they have offices in different parts of the country to provide easier access to their resources.

I wish you would keep those questions and ask them of the CRTC and then ask the consumer association intervenors if they have any problems.

Senator Forrestall: Senator Gauthier, at another stage in Bill S-7 generally wondered out loud, and I quote:

...Bill S-7 gives the right to the commission to grant costs, but not to panels established by the commission.

Would your amendment capture those panels?

Senator Finestone: Yes, sir. I think this amendment would make Senator Gauthier feel that he was now fairly treated. He put hundreds of hours of research into his speech. His comments were absolutely vital, reflecting an interest in the linguistic duality of Canada and in allowing TFO to have a home not only in Ontario but in Quebec.

It was a very important thing that Senator Gauthier was trying to do. It cost him thousands of dollars personally. Maybe he will appear here and tell us about that.

Senator Forrestall: I remember reading about that and I appreciate your response. I wanted to get Senator Gauthier`s name on the record.

Senator Finestone: He is my seatmate. I support him all the way.

Senator Milne: Senator Finestone, why do you think the government originally did not provide this equity between the Broadcasting Act and the Telecommunications Act, as your amendment is attempting to do? Was there a reason?

Senator Finestone: That is a good question. I cannot give you an answer. As I remember, we revised the Broadcast Act three times in the course of eight years or ten years. We did extensive examination of that act. I cannot remember that question being raised even once.

Perhaps I have a failing memory. I will go back and look at the various testimony. We did travel and we made enormous changes but all to the Broadcasting Act. I do not think we heard complaints about intervenor cost.

It was a different scene in those days. I remember that we saved the consumers millions of dollars on an increase to cable fees that were about to be awarded. The consumer groups gave a reasonable presentation as to why that increase should not take place. I am sure PIAC or the Public Interest Advocacy Centre can come and give you the details on that story.

I do not recall a request for that amendment. Yet it was such an obvious lack of concordance. We did not see then the same kind of convergence and cross-media involvement. Corporations then were not the gigantic conglomerates that they are today, covering cable, broadcasting, news media and print. At that time, it would have been considered unacceptable to have such cross-media investments. It is not any longer.

The Chairman: Thank you for your very clear answers, Senator Finestone. We are very proud of one of our own appearing for the committee.

Tomorrow we will hear from Action-Réseau Québec and from PIAC. We will meet at 5 p.m. tomorrow to hear from Senator Austin and Senator Stratton to discuss the restructuring of Senate subcommittees in accordance with the March 15 order of reference to the Rules Committee. They want to obtain our views. We will spend one-half an hour on that before hearing our other witnesses at 5:30.

The committee is adjourned.

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