Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 4 - Evidence - February 13, 2003
OTTAWA, Thursday, February 13, 2003
The Standing Senate Committee on Transport and Communications, to which was referred Bill S-8, to amend the Broadcasting Act, met this day at 10:47 a.m., in room 256-S, Centre Block, the Chair, the Honorable Joan Fraser, presiding.
Senator Joan Fraser (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, we are meeting today to continue our consideration of Bill S-8, to amend the Broadcasting Act.
[Translation]
This is a private bill that was considered in the last session of this Parliament and that we are reconsidering now.
We have today witnesses from the CRTC, the Canadian Radio-television and Telecommunications Commission.
[English]
Welcome, Mr. Rosenzveig and Mr. Lacombe. I know that representatives of the CRTC appeared before this committee on Bill S-7 during the last session. We are grateful to have you with us again today.
Mr. Allan Rosenzveig, General Counsel, Telecommunications, Legal Directorate, Canadian Radio-television and Telecommunications Commission: Thank you, honourable senators, for inviting us here today. I have had lengthy experience in the areas of cost awards and telecommunications proceedings. With me today is Mr. Tony Lacombe, the acting executive director of broadcasting operations at the Canadian Radio-television and Telecommunications Commission, CRTC. Mr. David Colville, Vice-Chairperson, Telecommunications, appeared before the Senate Transport Committee in May 2001 to comment on Bill S-7, the predecessor to Bill S-8. At that time, Mr. Colville was acting chairperson of the CRTC.
Jean-Pierre Blais, who was then the executive director of broadcasting, appeared before the House of Commons Standing Committee on Canadian Heritage in the spring of 2002, when they were considering Bill S-7. I assisted during both of those presentations.
Today I will briefly outline the CRTC's experience in the awarding of costs in telecommunications proceedings. Mr. Lacombe will describe how the CRTC receives input on the broadcasting side. We hope to leave time for questions and we will respond as effectively as possible.
Honourable senators have asked for background information about the entities appearing before the committee. The Canadian Radio-television and Telecommunications Commission, or the CRTC, was established by Parliament in 1968. It is an independent, public authority constituted under the Canadian Radio-television and Telecommunications Act. We have responsibility for telecommunications. That was transferred to the commission in 1976. Shortly thereafter, in 1997, we began awarding costs on the telecom side.
The CRTC reports to Parliament through the Minister of Canadian Heritage. We have approximately 400 employees, and are very small as far as government departments and agencies go. Our headquarters is located in the National Capital Region, in Gatineau, and we have seven regional offices.
The CRTC is vested with the authority to regulate and supervise all aspects of the Canadian broadcasting system, as well as to regulate telecommunications common carriers and service providers that fall under federal jurisdiction.
The CRTC derives its regulatory authority over broadcasting from the Broadcasting Act, while its telecommunications regulatory powers are derived from the Telecommunications Act.
[Translation]
Mr. A. R. Lacombe, Director General, Broadcasting Operations, Canadian Radio-television and Telecommunications Commission: Madam Chair, the commission considers public participation in our many and varied proceedings to be an important tool, enriching our decisions and helping us better determine the public interest on a case-by-case basis.
CRTC hearings allow for extensive public input, and the electronic age has allowed the Commission to expand its Internet and electronic document filing system for access by members of the public.
The CRTC has been improving on our web site, making background on each decision easier to find, access and review.
The CRTC holds broadcasting hearings in different regions around the country, to facilitate local participation. In more recent years, the Commission has been proactive in putting an increased emphasis on regional hearings.
There is an example underway right now: an extensive broadcasting hearing in Montreal started last Monday, February 3. It is expected to conclude late next week, thus lasting a total of three weeks. Our Chairman, Charles Dalfen, is chairing the Montreal panel and sends his regrets that he cannot be here today.
For some 29 specific applications at those hearings, there were 1,538 interventions, written and oral.
Last year the commission held public hearings to deal with some 75 applications. Six of these public hearings were held in the regions affected.
The CRTC also conducts numerous paper-only broadcasting proceedings, roughly 65 per year, which do not involve any oral component, but in which there are many interventions sent in from all sources, electronically, by mail or courier, or by facsimile. These range from general opinion letters submitted by individual citizens to more complex analytical submissions from companies or associations.
[English]
Mr. Rosenzweig: I will briefly summarize our costs award experience.
Our experience in the awarding of costs is limited to cases falling on the telecommunications side of our mandate. The Telecommunications Act and the predecessor legislation empowered the commission to establish the criteria for costs and to award costs in telecommunications proceedings.
The CRTC awards costs with a view to enhancing informed participation in its proceedings. Costs are awarded in only a small number of our telecommunications proceedings.
In Mr. Colville's remarks to this committee on May 30, 2001, he indicated that over a five-year period, from 1996 to 2000, costs were sought and awarded in roughly 1 per cent of our telecommunications proceedings. I can update honourable senators at this time. Over the seven-year period from 1996-2002, that figure is 1.3 per cent.
This reflects the fact that many proceedings are not of significant interest to public interest groups or require little special effort in order to participate. Costs are not available to everyone who intervenes and participates. They are meant to be available where needed in order to participate in a significant way and to provide for informed participation. The criteria for determining whether costs will be awarded are set out in the CRTC's telecommunications rules of procedure. They are based on a three-pronged test.
First, the party asking for costs must have an interest or represent people who have an interest in the outcome of the proceeding.
Second, the party must have participated in the proceeding responsibly.
Third, the party must have contributed to a better understanding of the issues by the commission.
In the most recent year, 2002, the commission issued 16 cost decisions, totalling, for the year, $542,000. We did not deny any cost requests in 2002. The amounts ranged from just over $1,000 to just over $296,000.
Over the seven-year period from 1996 to 2002, 90 per cent of cost applications were approved; conversely, obviously, 10 per cent were denied. The amounts awarded range from approximately $150 to approximately $305,000. $305,000 is the largest single cost award over those years. On average, each year, just over $375,000 was awarded to all those who asked and received costs in that year for all our proceedings.
Some telecommunications proceedings are very important to consumer groups and public interest groups and informed participation enhances the proceeding. That is why those particular instances merit an award of costs.
Over 90 per cent of cost awards have been to public interest and consumer groups and not to individuals. We do have participation from individuals. However, normally, due to the extent of that participation, they are able to do so without asking for cost awards.
Mr. Lacombe: Bill S-8 would amend the Broadcast Act to permit the commission to award costs in broadcasting proceedings, using the same language as is found in the Telecommunications Act.
If Bill S-8 were to pass, the CRTC would hold public proceedings to enable interested participants to suggest the appropriate criteria for the awarding of costs in broadcasting proceedings.
For example, should the criteria be the same as those employed in telecommunications proceedings? To maintain and ensure credibility, I assume that as on the telecommunications side, the criteria would include a requirement that the participation be relevant and enhance the proceedings.
It would be important to the CRTC to have discretion to determine cost criteria. The bill, as worded, appears to ensure this.
[Translation]
To sum up, our experience in awarding costs on the telecommunications side has been positive. Cost awards have facilitated informed participation in the relatively few proceedings that require special effort and are of particular interest to consumer and public interest groups.
If Bill S-8 were enacted, we assumed that they would, similarly, seek costs in some broadcasting proceedings.
Thank you, Madam Chair, for your invitation to appear before the committee today to discuss this issue. We will now be pleased to answer your questions.
The Chairman: Thank you very much. This was extremely interesting.
[English]
Senator Spivak: Mr. Rosenzveig, do you know why it is possible to have costs awarded under the Telecommunications Act and not under the Broadcasting Act? What was the reasoning behind one and not the other?
Mr. Rosenzveig: I am not intimately familiar with the passage of the existing Broadcasting Act. It did not provide for costs, nor does the new act. On the telecommmunications side, it was thought desirable to provide a means, in the rare cases where informed participation is not possible for some groups, for that to take place. At the time, our telecommunications hearings tended to be adversarial, with cross-examination of witnesses. We regularly award costs, and we have very few oral hearings on the telecom side. People file submissions in writing. Some of those meetings are of interest to consumer groups, they participate, and costs are awarded. We have found that this has been important in providing a better record and more informed participation on the telecom side.
Senator Spivak: Do you find that it is not adversarial at all these days? Do you mean among the public interest groups or among the telecom companies?
Mr. Rosenzveig: Both on the telecom and broadcasting side, people with different interests participate. One of the roles of the regulator is to balance and consider the various competing interests and determine what is in the public interest. You will have different people with different interests on both sides of a competitive licensing hearing on the broadcasting side.
Senator Spivak: It looks like you have many interventions on the broadcasting side. Do costs need to be awarded on the broadcasting side, or are you happy with the present system?
Mr. Lacombe: We support, and the commission has been pushing this forward, making it possible for interveners who come in front of the commission to be well equipped to provide interventions that support their points of view. This would render it possible. There are other ways this could happen, but we certainly have been taking all kinds of measures to ensure that interveners have access to public hearings. One of the measures that we have not talked about, and which is quite apparent, is that we request that the applicants broadcast any changes or renewals of their licence on their stations when they are in front of commission, to incite people to come forward.
Senator Spivak: Have you found that the interveners on the broadcasting side are well equipped to intervene? Do you think there are more technical aspects on the telecommunications side? What is your informed view?
Mr. Lacombe: There are a variety of interveners on the broadcast side. Many of them are companies that provide substantial information. However, there are other occasions where someone who wants to support a new service, for example, does not need necessarily more technical or economic data in order to say, this would be a good service. They would write in and say, ``We support the service.'' There is no cost associated with that.
Mr. Rosenzveig: On the broadcasting side, we believe that if there were a cost-awarding power, it would be rarely exercised. In the vast majority of proceedings, either there is no significant interest, or they can participate without requiring significant additional resources they do not have. Obtaining surveys or expert opinion might be helpful in improving their ability to participate. Obviously, there are some public interest and consumer groups who think it would be helpful to have more resources on some occasions. I do not think the ones who appeared before the committee have said they would need it every time. As on the telecom side, in some cases, they will be asking for awards. However, it will not be for every proceeding.
Senator Ringuette-Maltais: In a previous presentation, we heard the comment that it would be useful to have regional experts to help groups that want to make presentations. What is your pool of expertise in the CRTC, and how do you think that compares to the pool of outside expertise that is available to different groups?
Mr. Rosenzveig: By definition, as a regulatory tribunal we build expertise, both at the commissioner and staff level. As I said earlier, we are small in comparison to other departments and agencies. We are tiny compared to the industries we regulate. There are two sets of industries. Having said that, we are expert. However, some of the hallmarks of a good regulator are fair and transparent process and public proceedings. In that context, it is important that people be able to participate in an informed fashion. I am sure interveners would be quick to say that we make up our own mind. Our decisions do not always provide what everyone wanted. There is a range of things people are asking for, but we do prize and value informed participation. On some occasions, not often, some of the participants may need additional help because they do not have the resources to participate at the level they may think is appropriate.
Senator Ringuette-Maltais: Going back to my original question, could you please quantify the number of experts currently employed by the CRTC?
Mr. Rosenzveig: We have approximately 400 staff. That includes everyone, from the mailroom to the library. On the broadcasting side, how many analysts are there?
Mr. Lacombe: The total staff in broadcasting is 132, I believe. That includes clerical staff and so on. I have not counted them, but it is probably in the area of 40 or 50. Most of the time, when people ask for assistance from our side, we do not provide expert advice. However, we do provide as much information to them as possible, including whatever economic, financial or TV log data we can.
Mr. Rosenzveig: On the broadcasting and telecom sides, staff members are available if people have questions about our processes or precedents. On both sides, we put public notices, submissions and decisions on the Web to try to make the information as readily available as possible.
Senator Ringuette-Maltais: You are saying to us that if a consumer or group wants to make a presentation, then they have full access to all the data that is currently available to the CRTC?
Mr. Rosenzveig: No, I am sorry, perhaps I should have been clearer. We do not put our thinking and analysis on the Web. We are advising the commission. What I meant was, we are quite prepared to talk to people about our precedents, our decisions and the way the processes work. The staff analysis is not revealed to the parties. The parties appear, make their points of view known, and staff members help the commissioners by providing advice and recommendations. We are not able, by definition, to share our thinking about what the right answer may be with the public.
Senator Eyton: I would like to talk about numbers. The numbers you have given us relate to last year and, on average, over the last seven years. Given your telecommunications experience — and we are looking at the broadcast side, which is a different question — and looking at the last seven years, the average was $375,000, according to your brief. However, last year, it amounted to $542,000.
Therefore, it was higher than average.
Perhaps more disturbing, in terms of control, is that you have said you did not deny anyone's request last year. The trend line in the telecommunications sector is up. You said that you grant 90 per cent of the applications, on average, but last year it was 100 per cent.
You can correct me here, but I have a sense that most broadcast applications, and I have had some experience with those, tend to be high profile and publicly known and debated, because many of the applicants have radio and television stations and other ways in which they can tell what is happening to them in Ottawa on a daily basis.
Given a situation where you grant all of the requests for funding, in a venue that would have a higher profile and more demanding people, do you think the numbers and experience you have had so far in telecommunications is at all applicable to broadcasting? How does one become a little more discerning and a little more judgmental, rather than granting 100 per cent of the requests? That number struck me forcibly.
Mr. Rosenzveig: I do not think that there is such a trend. I have only given you the numbers last year and the average. The average was $375,000, and the previous year it was over $540,000. It is not a trend upwards.
It depends on the nature of the proceedings. Last year, we were awarding costs with respect to our recent price caps proceeding. It is a large proceeding that takes place every four years. The costs were awarded last year. In 1998 and 1999, it was $418,000 and $458,000 respectively. In 2000, it was lower. When you average them, it comes out to that $375,000 plus or minus figure, so it is not a trend.
I do not think that there is a trend in denials either. We have an average of 18 cost order decisions a year. In some years, there will be fewer than others. Over time, about 10 per cent have been denied.
The interveners have had some experience. There have been some denials in the past, so they pull up their socks. They tend not to duplicate each other, but rather coordinate what they do. They tend to do a good job.
It is a merit-based approach. By and large, they are approved, but last year was not a trend. They are not all approved.
You asked whether we foresee that because of the nature of the issues in broadcasting, there will be an exponential increase if the bill were passed. People would be applying in larger numbers, but it would settle out. In the long run, we do not see that it would be much different.
Costs are not required in broadcasting if it is a small matter. On a major matter, where you need to do a study, presumably application will be made for costs.
We do not see costs becoming the rule, and we do not see a huge amount being awarded relative to the telecom side. We do not know. It will be a new field, but we do not see anything that would drive the two sides in a different way.
The Chairman: When you are contemplating the awarding of costs, does capacity to pay enter into your calculations? We have heard from broadcasters who have suggested that it could be a serious financial burden for them, given the great public interest in many broadcast hearings. The fears expressed have ranged from the impact on very small operations, such as a little country radio station, all the way up to the CBC, which may have what sounds like a lot of money, but has to spread it thinly over a wide range of activities. The CBC has already expressed, and I expect will do so again this morning, some considerable concern about the potential financial impact of such a provision.
When you are calculating how much, or whether, to award, does capacity to pay figure in the picture?
Mr. Rosenzveig: On the telecom side, if we have a proceeding where many regulated telephone companies are involved, we do look at capacity to pay. If we award costs to several telephone companies, ranging from Bell, which is very large, to SaskTel, which is much smaller, we will prorate the costs award. If $80,000 is awarded, Bell will pay its share based on its telecommunications revenues.
Bell telecommunications revenues are approximately half of the entire industry. Therefore, SaskTel would pick up only a small amount of that cost.
[Translation]
Thank you, gentlemen. You deserve special thanks because this is the third time you appear before Parliament, either here or in the other place, to discuss the same bill. Your comments are very helpful.
Our next witnesses already know us. You will recall, honourable senators, that they appeared before us on October 30 of last year. Some senators wished to keep discussing the Canadian Broadcasting Corporation.
[English]
We welcome you again. I believe you are familiar with our format.
Mr. Michel Tremblay, Vice-President, Strategy and Business Development, Canadian Broadcasting Corporation: We have appeared before this committee previously on this issue. Today I would like to reiterate four key points and also bring new evidence to sustain our position with regards to Bill S-8.
First, we strongly believe that Canadians should have the opportunity to be heard before the CRTC.
Second, we believe that currently, there are ample opportunities for them to be heard on broadcasting matters.
Third, the CBC does not rely on CRTC hearings to connect with its audience. As public broadcasters, we reach out every day to get public participation and the public's views of what they see and hear on our services.
Fourth, while we support greater public participation, we do not believe that the CBC/Radio-Canada parliamentary appropriation should be used to pay cost awards. This is not how Parliament intended those funds to be used.
Fifth, we have considerable concerns about the economic effects Bill S-8 could have on our programming.
As you know, we depend on our annual appropriation from Parliament to provide services as required in the Broadcasting Act. With that appropriation, we operate four national radio networks, including 72 regional stations, two television networks, including 25 stations, Newsworld, Le Reseau d'information, CBC North and our Internet sites. We believe it is inappropriate to divert public money away from its intended use — our programming — and use CBC/Radio-Canada's appropriations to fund participation in public proceedings.
[Translation]
We are also concerned about the amount of costs that may be awarded.
Bill S-8 proposes to initiate a new system where broadcasters would pay additional costs for public participation without any accurate estimates of what those costs will be.
We all know that there is a huge difference between CRTC processes under the Telecommunications Act and the Broadcasting Act, and that makes it difficult to predict what the costs of awards would be.
We do know, as mentioned earlier, that telecommunication proceedings are more complex, and often include a cross-examination stage that requires expert witnesses.
We know that since 1996, individual awards for intervenors have exceeded $500,000. There is no ceiling on how high awards can go. We also know that far more Canadians intervene in broadcasting proceedings than in telecommunication proceedings.
Four thousand people intervened in the CBC's last license renewal. That increases the unpredictability of potential cost awards.
[English]
The Public Interest Advocacy Centre, which appeared before this committee in December, told you that they are confident that Bill S-8 will not hurt us and that we can afford it. With respect, we cannot agree with that view. CBC/ Radio-Canada's budgets are stretched now. We have spent the past two years re-examining the way we do everything, from looking at our real estate to our transmitters, all in an effort to find more money to invest in Canadian programming for Canadians who view and listen to our programs. We cannot pay cost awards without diverting money away from our programming, which we are mandated to provide.
Supporters of this bill will tell you that it will increase public participation in proceedings before the CRTC and that it will help programming. First, CBC/Radio-Canada receives more public submissions before the CRTC than any other broadcaster. In addition to the 4,000 interventions during CBC/Radio-Canada's last renewal, 600 Canadians came to speak at CRTC public consultations in 11 cities. Sixty-five of them chose to appear at the CRTC hearing in Hull, Quebec.
[Translation]
CRTC representatives have just indicated that the public hearings presently underway in Montreal have attracted more than 1,500 interventions from the public.
[English]
No one has provided any evidence that the quality of these public hearings on broadcasting matters has in any way been hurt by the absence of cost awards.
[Translation]
I think what is even more important for committee members to remember is that we don't wait for CRTC hearings to seek public input. We do it every day.
At the end of each of CBC programs we ask for feedback from the public and from our viewers. Our town hall programs provide ordinary Canadians with a platform to share their views on a wide variety of topics. Our television and radio Vice-Presidents regularly participate in public forums about CBC and its programming, forums which we also broadcast.
We are present in all regions of the country through our offices and our stations which are well connected to the communities they serve.
We actively seek out the views of Canadians through our Internet services, our talkback lines, e-mail and fax. If they do not like our programming, we have ombudsmen to investigate their complaints.
As many of you have probably seen on CBC Newsworld, we have a daily segment in which we respond on air to viewers comments about our coverage.
[English]
We act on what Canadians tell us. It was feedback from Canadians that convinced us we had to change our English television services to make our programming different from that other broadcasters are offering. That is why we launched our transformation of English television. Canadians now tell us it is working. We did not wait for a CRTC licence renewal process to implement such changes. We are Canada's national public broadcaster. This is what we do, and through it all we try to dedicate our resources to high quality Canadian programming. Bill S-8 proposes to take some of those resources away. We feel strongly that CBC/Radio-Canada public funding should not be used for that purpose.
Supporters of this bill say costs awards are necessary to fund research. CBC/Radio-Canada already conducts extensive research on broadcasting issues, much of which is publicly available on our Web site. This is objective, quality research that is used by others, including private broadcasters, the Copyright Board of Canada, and the Standing Committee on Canadian Heritage in its recent broadcasting review. We do this research so we can better serve Canadians.
[Translation]
When we appeared before this committee last year — when Bill S-8 was still Bill S-7 — you shared our concerns about the effect of cost awards on CBC, and this committee reported the bill with a recommendation that the government examine other solutions. Unfortunately the government was unable to do so.
Thus, if you are determined to proceed with Bill S-8, we urge the committee to at least act on its previous recommendation and amend Bill S-8 to exempt the CBC from taxation awards.
We tabled a suggested amendment when we appeared before you last October. We have left a copy of the amendment with the clerk this morning.
[English]
It was not the intention of Parliament that CBC/Radio-Canada's public funds be spent on cost awards for CRTC hearings. At the very least, this amendment would address CBC/Radio-Canada's concerns about the impact of Bill S-8 on the programming we provide to Canadians.
I wish to thank you for this opportunity to speak to you again today, and we would be pleased to answer any questions you may have.
Senator Spivak: In other words, you are saying to us that you are not opposed to Bill S-8 in principle. I think I am with you. I would not want to see any funds diverted from the CBC, which needs all the money it can get. Are you saying that you would be in favour of the bill with the amendment that you propose, or am I being too strong here?
Mr. Tremblay: This is correct.
Senator Gustafson: In terms of viewer time and what Canadians are watching, have you any figures on how many Canadians, and in what time frame, are watching CNN? Are you losing viewer audience? I go into the hotel; CNN is on. I was at breakfast this morning; CNN was on. I go into offices; CNN is on. What are the numbers?
Mr. Tremblay: First, it is true that given world events, there is considerable interest from viewers in CNN. We have had this since 9/11. They had quite a bump in their viewing hours last year, and that has carried over into this year, so there is no doubt that CNN constitutes a significant source of competition for our services such as Newsworld. I would say that in reality, it was not always like that.
I would be pleased to provide you with those specifics, but it is clear that it is currently a significant source of competition to Newsworld.
The Chairman: I would like to pursue this avenue that Senator Gustafson opened because the issue irritates me. I do not know what it is like outside Quebec, but if I go to a comparatively small town in Quebec and turn on a television in a hotel room, I can get CNN, but not Newsworld. I am not sure why this is, but I find it intensely irritating — I really do. I just leave that thought with you. It has nothing to do with Bill S-8, I suppose.
Senator Eyton: I do not care about CNN and I am a strong supporter of CBC. In particular, I listen to CBC Radio One and Radio Two.
We have been assured that the dollars involved are, according to the precedent that we talked about, relatively small. When that is the case, I am tempted to say: What the heck, it is a tiny amount of money in a large CBC budget. Now, if it were more than a tiny amount, why would the government not consider providing funding so that it would not be a hardship? If it is a large amount, the funding is not provided, and it hurts. Of those three alternatives, I would think that number one or number two was more likely, given assurances of the small amount of money and the relatively infrequent use of discretion by the CRTC in awarding costs.
It seems odd to me that the CBC would ask for an exemption from the bill. I heard that there were about 4,000 interveners in one hearing, and about 800 people who actually intervened before the commission. Those are immense numbers. Using that as a kind of guide, what portion of the CRTC hearings would be occupied by CBC questions? Would it be 30 per cent or 40 per cent? It must be a goodly percentage if 800 people appeared and it must take up much of the agenda of the CRTC.
How does the CBC compare with the rest of the industry in terms of appearances before the commission? If it were a small proportion, that is one thing, but if it is a large part of the kind of activity that I am trying to describe, that would be another. What proportion of the commission's activity do you occupy?
Mr. Tremblay: Let me deal with your second question first, senator. I would say that we come before the CRTC quite often and it occupies a great deal of time. I was at the helm of the renewal process in 1999. That took several months, because we were dealing with our major licences and our radio-television network, Newsworld, RDI, et cetera. A considerable effort was devoted to that. There was a massive hearing that lasted for more than three weeks. We occupied much of the CRTC's time that year. Then they had to write their decision, which was announced later. I guess it was very time-consuming.
Other than through the renewal process, I do not think that we are a greater user of the CRTC than any other broadcaster. It is hard for us to assess because it depends on whether we require an application to acquire a new licence or to amend existing licences. I would say that the volume is not greater than that of CTV. However, in respect of the issue you raised, about small amounts and are they simply issues of principle, we have to keep in mind that the evidence we have relates only to telecom proceedings. Telecom hearings are fewer in number than broadcasting hearings and they attract specialists. There would not be 4,000 people appearing before the CRTC for a telecommunications hearing. We cannot predict what will happen in broadcast proceedings.
We must also bear in mind that, beyond the complexity of the process on telecommunications versus broadcasting, at the end of the day, telecom hearings are held on issues of rate increases, which have a direct impact on the pocketbooks of Canadians. It is entirely appropriate to equip those public interest groups with the necessary tools to go before the CRTC and have their say. When the CBC appears before the CRTC, we are talking about providing a free service to Canadians and how to better our programming. There are significant differences between what the commission is trying to achieve through telecommunications proceedings and how it manages and supervises the broadcasting industry. The consequences are different, as are the technicalities surrounding the process.
Ms. Edith Cody-Rice, Senior Legal Counsel, Canadian Broadcasting Corporation: Added to that is another concern, that once something is enshrined in legislation, it is there for a long time. Although the current view is that the CRTC will award minimal costs, that may change over time and we would have no control over it. Given our experience of budget cuts, we have no assurance that the government would add money to our budget. Over the years, money has been taken away, yet we still have to provide the same service.
Senator Eyton: Coming back to my second question, it would be one thing to make an exception if the CBC were to occupy 10 per cent of the commission's time, and another if it were to occupy 50 per cent. To use an example, if the CBC were to occupy 80 per cent of the commission's time — I am sure that is not correct — there would not be much point to the bill. However, do the activities of the interveners for the CBC involve about 10 per cent of the proceedings of the CRTC? Give me a ballpark figure so that I can get some sense of it.
Mr. Tremblay: This is difficult for me to assess. The commission would be in a better position to know where we fit in respect of the overall volume. I can only say that when we go back for the next renewal, it will be a major project for us and for the commission in that year. There will be a bump. We always have a range of applications for new radio stations. I would be pleased to provide you with that number. However, we always have smaller elements on the go with the commission, such as setting up new broadcasters across the country and new television stations. We have applications that are not large in scope, but nevertheless, they are significant in number.
Senator Eyton: I was trying to relate it to the number of interveners who actually appear before the commission relative to the CBC.
Ms. Cody-Rice: When you talk about the number of interveners, a pertinent question would be: How does the number of interveners who appear at a CBC hearing compare with the number who appear at a private broadcaster hearing? I think we have significantly more interveners. The impact of cost awards would be greater for the CBC.
Senator Eyton: I was trying to quantify the extent of the exception that was suggested.
Mr. Shaun Poulter, Manager, Government Relations, Canadian Broadcasting Corporation: In respect of the amount of money involved, the people at CBC who produce Canadian drama will tell you that there is no such thing as a small amount when it comes to trying to get money to produce programs. When we look at the money awarded on the telecom side, we see it in terms of programs. One episode of Da Vinci's Inquest, a popular Canadian program, costs $1 million to produce. That money has to come from somewhere, and so we have been working hard to find ways within our own system to get a dollar here and a dollar there. There really is no such thing as a small amount of money.
[Translation]
Senator Ringuette-Maltais: My questions will probably take the form of a general comment.
I will start with some compliments. I may then come to a few negative points.
I will have to admit that even with what you called — no, I think it was Ms. Cody-Rice — huge budget cuts, the CBC and Radio-Canada successfully made a major transition when they introduced a new Internet information network, which was extraordinary.
They say ``It's time to reality.'' I can only congratulate you. This was a major step forward even if some say you had budget cuts. I do not necessarily believe this was the case, which means that maybe there was still some extra fluff.
My comments will be mainly focused on linguistic minorities which, if my memory serves me right, have been subjected in the past few years to cuts in regional offices, regional reporting as well as regional programming and broadcasting, as Madam Chair indicated a few moments ago.
Since I expect another wave of cuts in the regions, which will affect official language minorities, I am not sure I can support your suggested amendment because, most of the time, these are small communities with limited economic resources that cannot afford to prepare a good brief with well-thought-out arguments and expert analysis.
My comments are directed to the future. As I come from a linguistic minority community where access to information and programming in the language of our choice is important, I have reservations and concerns.
Mr. Tremblay, I wonder if you could today reassure people from isolated areas and minorities living in some regions by indicating to them that your future programming will not make them want to use Bill S-8 to make a presentation to Radio-Canada.
Mr. Tremblay: Please allow me to respond immediately. Members of our regional audiences can already contact us without having to wait for anything else. We have a 1-800 line and a Web site they can use to get in touch with us.
I wish to thank you for your compliments about our Web sites. We are very proud of them because we actually think that the quality of our news and programming services must extend to the Internet in order to provide additional means to reach Canadians wherever they are.
The issue of the services provided to minorities is very important, and I am very pleased that you raised it.
First, before considering the future, I want to take a little step back. I hate to mention that again, but you cannot underestimate the budget cuts we were subjected to. We had a $400-million reduction in our budget in the mid-eighties. We lost 3,000 jobs. Cuts of this magnitude are no doubt very painful.
So we did have some service cuts throughout the country. Those budget cuts were huge and you cannot underestimate their impact. Everyone suffered, in the regions, at the network level, everywhere.
Second, as you know, our French television services operate regional stations all over the country providing unique news services to francophone Canadians. No other broadcaster extends its news services throughout the country as we do.
Third, more than 400 hours of programming are produced in the regions each year. Some programs are only aired in the regions. Others are carried over the network.
Yesterday, as you may know, the new Vice-President of French television, Daniel Goure, announced that Radio- Canada, as a public broadcaster, is repositioning its French television services in order to bring them back closer to their roots.
The repositioning will include a review of our role in the regions. Mr. Goure had already indicated several times that he intended to give a stronger voice to regions and to the people who operate our regional stations non only for regional programming, but also for their contribution to the network.
I think it is important to reflect regions within the network and not to limit their share to a few slots in the programming schedule called ``regional programs.'' This is not effective. We have to reflect regions on a larger scale. This is a new direction we are taking. We have already started to train and to help train independent producers in the regions in order to increase the regional input.
A first television drama produced by an independent producer in New Brunswick will be aired on the network in the coming year. We are trying to develop these production centres around the country.
We are doing much already, more than others, since this is our mandate. Obviously we can do more, and I think we will try to go as far as we can.
To put things in perspective — if you allow me, because I'm trying to keep this short — when some say that $400,000 or $500,000 a year is not a big deal, I have to note that this is what it takes to maintain one or two regional news offices.
So, there is an impact when we get a budget cut of $400,000 or $500,000 a year. This represents half the budget of an episode of Da Vinci's Inquest or of another series on the French network. These amounts will also impact the regions.
We are presently making all possible efforts to free some money from operations, by reviewing everything we do, in order to reinvest it in the network and in the regions.
When you cut one dollar from the CBC budget, you will have an impact on programming because we have a lot of fixed costs in our operations, for network transmitters and so on. So it is always programming that suffers the most each time one dollar is cut.
Senator Ringuette-Maltais: Thank you very much, Mr. Tremblay. As I am not from Central Canada and the golden triangle of Montreal, Ottawa and Toronto, I find it very difficult to accept your comments to the effect that a $1 cut in the CBC budget will automatically impact the regions. This is really difficult to accept. Perhaps what is needed is a change in philosophy.
Mr. Tremblay: This is not what I meant. If we get a $1 cut obviously, everyone will suffer. The cut will affect either the network or the regions. The regions are not the only area affected. I was just giving an example when I said that $300,000 or $400,000 a year is what it takes to maintain two regional news offices. This was only an example. We definitely don't try to target the regions. On the contrary, we made a special effort to develop news ways of doing things through sharing of resources between radio and television so as to go further in the regions and bring back news to be broadcast on the network. We are doing quite the opposite. We surely don't want to penalize regions.
[English]
The Chairman: Obviously, people care a great deal about the work you do.
Senator Gustafson: What is the total budget of the CBC?
Mr. Tremblay: At this point, we are looking at $1.4 billion.
Senator Gustafson: What portion of that comes from the government?
Mr. Tremblay: I am not very good at on-the-spot calculations. I would say that $950 million would be the operating appropriation for this year. We must keep in mind that this a special year. We have been blessed with $60 million in additional government funding, which has been totally dedicated to programming.
We have no guarantee that this money will be renewed next year. We are just hoping for the best. Obviously, if that is not the case, we will have less than $950 million to work with next year.
Senator Gustafson: The rest of the money comes from advertising or —
Mr. Tremblay: About $300 million will come from advertising and self-generated revenues.
The Chairman: Thank you all very much. Indeed, the work that the CBC does is important, which is why we wanted to hear from you again. We are grateful for your being here this day.
Senators, we thank our witnesses, but we are not free. We still have more work to do. As you see from your agenda, we will consider a draft legislative budget for the coming year. After that, we will go in camera to discuss future business of the committee.
Does everybody have a copy of the proposed legislative budget for the coming year? It is a fairly simple matter.
The steering committee has approved this budget. It is simply for our work on legislation for the fiscal year that ends March 31, 2004.
It is, I believe, a prudent and modest amount of money — $21,200. You will find a breakdown of that amount on the third sheet of the package.
If you look at the second sheet, you will see that we did not spend as much money as we budgeted. However, it is prudent to budget appropriately. For example, we should budget for a certain number of working meals, because if we are holding a committee hearing on a particularly complex piece of legislation, which may happen in the coming year, it could run into lunchtime.
The professional services item refers to the possible use of an outside consultant, as we have done in the past. It would probably be on transportation matters. As you know, there is discussion in the other place of one or more fairly complex pieces of transportation legislation. In the past, notably the busing study, we found it useful to supplement parliamentary resources with an outside consultant.
Other than that, I think it is straightforward. Does anyone have any questions?
Senator Gustafson: I move the adoption of the budget. I think that it is very modest.
The Chairman: It is moved by Senator Gustafson, supported by Senator Phalen. All in favour? All opposed? Carried. Thank you very much.
The committee continued in camera.