Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 5 - Evidence - February 25, 2003
OTTAWA, Tuesday February 25, 2003
The Standing Senate Committee on Transport and Communications met this day at 9:57 a.m. to consider Bill S-8, an Act to amend the Broadcasting Act.
The Honourable Senator Joan Fraser (Chairman) in the Chair.
[Translation]
The Chairman: Today, we continue our examination of Bill S-8, an Act to amend the Broadcasting Act. We are pleased to welcome witnesses from the Department of Canadian Heritage.
[English]
We welcome Mr. Marc O'Sullivan, Director General, Broadcasting Policy and Innovation; Mr. Larry Durr, Director, Broadcasting Distribution Services; and Mr. Mario Lepage, Legal Counsel.
Please proceed.
Mr. Marc O'Sullivan, Director General, Broadcasting Policy and Innovation, Department of Canadian Heritage: I will make a short statement and then open it up for questions.
[Translation]
When we first appeared before this committee on May 30, 2001, when Bill S-7 was before you for consideration, we expressed agreement in principle with the aims of the bill, although we also shared with you some of the concerns we had about the draft legislation's inherent problems, specifically the marked differences between the broadcasting and telecommunications sectors.
[English]
The differences between the broadcasting and telecommunications systems that have been pointed out by various witnesses in front of this committee and also in front of the House of Commons committee are still at issue in terms of considering the merits of this bill. Important concerns have been raised before both committees in terms of the differences between the operations of the two sectors: the number of hearings and the number of interveners; the nature of the hearings; public participation in the broadcasting and telecom proceedings; and the different objectives of the proceedings. Concerns have also been raised about money being diverted from programming to intervener funding and the impact of an intervener funding regime on small and non-profit broadcasters.
Members of the House of Commons Standing Committee on Canadian Heritage, looked at possible amendments at length, and I know that you have also considered possible amendments to the bill to take these concerns into account. There have been discussions about amendments to exempt certain broadcasters from an intervener funding regime. There has been a debate about whether the CBC should be exempted, saying on the one hand that the CBC is already hard-pressed for funds and should not have additional obligations imposed on it. Others say that to exclude the national public broadcaster would defeat the purpose of the bill. Similar debate also took place with respect to exemptions for small broadcasters, exemptions for Aboriginal broadcasters, such as the Aboriginal Peoples Television Network, and exemptions for educational channels. There has been quite a bit of controversy about whether the bill should proceed as it is or whether it should be amended.
[Translation]
As you know, the House of Commons Standing Committee on Canadian Heritage is currently examining the broadcasting system and is poised to table a report, possibly in late March or April. May I respectfully suggest that it would be a good idea to consider intervener funding in conjunction with the broader issue of examining the Standing Committee's report on the state of the broadcasting system. This approach would allow you to consider at the same time this issue and the broader one now being examined by the House committee, namely the analysis of the broadcasting system's policies and regulations, and issues such as content, ownership and the impact of new technologies on the legislative and regulatory framework of the Canadian broadcasting system. Specifically, there is the question of Part II licensing fees charged to broadcasters. I know that broadcasters have established a link between these fees and the additional obligation to pay intervener funding, as proposed in Bill S-8. If the Standing Committee were to make recommendations concerning Part II licensing fees, this could potentially tie in with the whole issue of intervener funding.
[English]
I conclude my statement on that note, highlighting the contentious issues raised in consideration of the bill.
The Chairman: It is my impression that when the predecessor of this bill was before this same committee, a year or more ago, that the department was essentially favourable. I am not quite sure what has changed. Could you enlighten me?
Mr. O'Sullivan: The department supported the bill in principle when it was first introduced. There was a distinction that we tried to make and maybe got lost in the various proceedings. The objective of the act is obviously hard to argue against: to get more participation in broadcasting hearings. That is a valuable objective. However, we pointed out that there are marked differences between the telecommunications and broadcasting sectors. We pointed out that the two sectors are structured very differently. The nature of the proceedings before the CRTC are such that broadcasting proceedings are very informal in nature and already garner quite a bit of public participation. On the telecom side, on the other hand, a small number of industry players are involved and there are far fewer hearings. The telecom sector has less than 10 hearings in a typical year. The difference in the nature of the two systems is such that we realize, and we said as much, that it is not obvious how to apply an intervener funding regime to broadcasting. It is much more complicated to do so in broadcasting than it would be in telecommunications.
As the bill was debated and as witnesses appeared, it became obvious that there were many concerns about the impact it would have as an additional burden and obligation on the broadcasters. We have to keep in mind that we are talking about a gamut of players. We are talking about 600 private broadcasters. CBC has about 80 radio stations and almost 25 television stations. We are talking about some 2,000 cable licencees. There is a multitude of players.
The issue has often been portrayed as a David-and-Goliath situation. There are a number of quite small radio stations. They have a legitimate concern about how this bill would impact their bottom line. Some have argued that the real objective of the amendment contained in the bill is to allow more fulsome debate vis-à-vis certain of the big players. There were examples given of dealing with the larger cable companies. However, the fact is that this amendment, if passed, opens up the system. Who knows how it will be applied and what the result will be.
Broadcasting proceedings before the CRTC touch a whole gamut of issues. They touch on programming issues, whilst on the telecom side oftentimes the hearings have to do with rate setting. This is a black-and-white issue. We are talking about whether a certain rate is appropriate, and various economic analyses are conducted to determine the appropriate rate. In broadcasting, we are trying to juggle many competing interests. We are often trying to juggle conflicting objectives of the Broadcasting Act, which push and pull the CRTC in several different directions.
I am not sure this lends itself to the type of regime that is being contemplated here, one that works fine apparently. Witnesses have said that it works fine on the telecom side, but it is not as obvious that it would work as well on the broadcasting side.
The Chairman: Forgive me, but all of this was true a year and a half ago as well. Your ministry is supposed to be aware of how many broadcasting outlets there are and how the system works. My question was: What has changed? I would draw to your attention that the CRTC, when its representatives appeared before us, did not seem to see any difficulty at all in administering a system such as the one being proposed.
If this committee rejects this bill, which of course it is free to do, we have to explain to the Senate why, and that is what I am trying to find out. What is different now? Is it just that you feel you had not done your homework the last time?
Mr. O'Sullivan: When the bill was introduced, as I said, we pointed out what I have just mentioned in terms of the differences between the two systems. What was not clear in our minds at that time was what would be the impact or the consequences of trying to impose an intervener funding regime on the broadcasting system in light of those differences. That is why bills are debated in committee. That is why witnesses appear and provide their input. We were informed by those appearances and by the information provided. We indicated our preoccupation with the differences between the two systems. The various witnesses who appeared before the committee and the debates amongst committee members highlighted legitimate concerns vis-à-vis the difficulties in trying to implement the system on the broadcasting side.
The House of Commons committee studying the bill was in the throes of trying to sort out potential amendments when they asked for an extension to give further consideration of the bill. That extension was refused. The bill was at report stage when prorogation occurred. Therefore, back in May of 2001. Were we certain about the difficulties? No, we were not.
We had a sense that it would be difficult to marry the telecom intervener funding system with the broadcasting system, and we pointed that out. What has changed over the past two years is that the submissions of witnesses and the debates that have taken place in committee have highlighted all of these concerns. I feel that they are legitimate concerns. I cannot just ignore them and say the principle is fine so let us proceed nevertheless. Maybe we should have done our homework better and made these points more strenuously at the outset. I accept that. However, this is what happens when a bill is debated over the course of almost two years.
Senator Callbeck: Are you saying that since you were here in May of 2001, you have changed your opinion because of the discussions that have taken place in committee?
Mr. O'Sullivan: Yes. We were preoccupied with the differences between the two systems. Originally we were uncertain about how the system could be implemented on the broadcasting side. The CRTC looks at the situation in the following terms: If legislation gives them the responsibility to implement a regime, they will implement that regime. It is their job to do so and they will do so. For the CRTC, it is a matter of looking at whether they can we do something. They will say, ``Yes, we can, because we will do what we normally do. We will issue a public notice, we will ask for comments and we will develop regulations and a regime for implementing this.''
We must look at this bill in terms of the impact it could have on the broadcasting system. We have concerns about that, notably because the open-ended regime as proposed in the legislation gives full discretion to the CRTC. We do not know the end result. The CRTC will consult. Under such a regime, they would develop regulations to establish an intervener funding regime. We do not know what that will be and we do not know what the impact will be on the broadcasters.
The CRTC would obviously try to minimize the impact and will administer the regime in a way that is as feasible as possible, but it remains an unknown. I understand the concerns of the industry players — the private broadcasters and the public broadcasters. They have all expressed concerns about this regime. It is difficult for us to just ignore that and support the bill.
Senator Callbeck: Obviously you are against this bill now; is that right?
Mr. O'Sullivan: Yes.
Senator Callbeck: Therefore, do you not think there is any way of getting around this intervener funding. The CBC and non-profit broadcasters want to be excluded. Do you not think that is a possibility?
Mr. O'Sullivan: It is a possibility. The bill could be amended to exclude public broadcasters and not-for-profit broadcasters. At one point, an amendment was being contemplated to exclude small private broadcasters as well, on the basis of who pays and who does not pay the Part II licence fees. The bill could be amended. A decision on whether to exempt certain categories of broadcasters is open to the committee, of course.
When amendments were debated in the House of Commons, we saw how contentious the debate became. On the one hand, some were saying that we need to exempt the CBC; others saying that we cannot exempt a national broadcaster. The hearings that garner the most public attention are the CBC hearings. An impasse occurred in the House of Commons over formulating amendments that would make the bill more palatable.
Senator Callbeck: Of the amendments that have been suggested, you do not favour any.
Mr. O'Sullivan: For example, if the CBC is exempted, there will be opposing views. On the one hand, some will say that the CBC does not need an additional financial obligation; on the other hand, some will say that the CBC is a national public broadcaster and therefore must be part of this regime. People must be able to get funding for their interventions in proceedings dealing with the CBC.
I am commenting on the bill as it stands. In terms of possible amendments, they are all possible, but each one raises other issues. If you exempt one, then the others will say, ``What about exempting educational broadcasters and Aboriginal broadcasters as well? Each exemption leads to calls for further exemptions, and then we get into a debate about whether we are eviscerating the bill.
Some have stated that the issue boils down to whether you trust the CRTC to implement this regime. Some have said the bill should be passed and then trust the CRTC to implement it as they see fit. Some have said that we cannot do that; we have to establish certain parameters in the bill to exclude certain people and allow for others. There are many options open to the committee in considering the bill.
Senator Callbeck: With any amendment, we will get people supporting both sides, right?
Mr. O'Sullivan: Yes.
Senator Callbeck: In other words, the amendments that have been proposed have you on one side or the other, or are you just down the middle?
Mr. O'Sullivan: I am counting on the bill as it stands. I have briefed my superiors on the bill as it stands. I do not have instructions in terms of saying the bill would be acceptable with a certain amendment.
When this question was debated previously, the department's position was, and remains, that we were commenting on the bill as it stands. Today, we are saying that if the committee sees fit to trust the CRTC to implement this regime, then do so. Others will say no, we cannot do that; we need to establish exemptions already in the legislation.
Senator Callbeck: In other words, the department does not see fit to trust the CRTC; is that what you are saying?
Mr. O'Sullivan: No, that is not what I am saying.
Senator Callbeck: I find this very confusing because I was here when you presented a brief before. In fact, I have it here. There was no question in my mind that you were supportive of this legislation. I have listened to all the witnesses.
You have obviously turned full circle on this thing. I would like to know the witnesses that really changed your mind, because they have not changed my mind. I would like to know what I missed here.
Mr. O'Sullivan: It was the witnesses here and it was also witnesses before the House committee.
Senator Callbeck: Can you be specific?
Mr. O'Sullivan: Essentially, all the broadcasters have raised concerns with the bill, both the private broadcasters and the public broadcasters. I will not point to one specific witness and say it is that witness, that person, or that individual who convinced us. It is just that all the witnesses who spoke about their concerns surrounding the potential impact of the bill on them raised legitimate concerns. That was exemplified by the long and contentious debate that took place in the other House over the bill. That committee is also working on a study of the broadcasting system. The committee that is about to table a report to the government, to which the government will have to respond, itself is unable to come to a consensus on how to deal with this bill. That raised red flags. It is difficult for us to say there is no problem with this bill when we see how contentious it is and how it is impossible for the House committee to arrive at a consensus on the bill. For the department to lend its support to the bill in the face of all these unresolved matters is difficult.
Senator Callbeck: When did the Canadian Heritage Committee in the other place begin to study the Broadcasting Act?
Mr. O'Sullivan: They started in November 2001.
The Chairman: At the outset, you said that the department favoured the principle of this bill, which is that those advocacy groups, consumer groups and people who represent some facet of the public's interest in the broadcasting system feel they should be able to get more expert input than they now can with the financial means they currently have. You said that you favoured the principle of helping them, but you do not favour this way of doing it. Have you any thoughts about alternative ways of helping them get the resources that they believe they need?
Mr. O'Sullivan: I have been in my current position for two years, and I have yet to receive representations from anyone saying that proceedings before the CRTC are unfair because they do not allow for intervener funding. From a public policy perspective, if I were to ask whether there was a problem here that needs to be fixed through an amendment to the act, we have never been approached by groups saying that there is a problem that needs to be fixed.
I am not aware of major proceedings before the CRTC in recent years whereby groups that absolutely wanted to intervene were not able to do so and therefore felt frustrated. If they were frustrated, they have not communicated those frustrations to us. When a public policy analysis conducted, one asks if there is a problem and one does a diagnosis of the current system. I have yet to have see indications that there is a problem that needs to be fixed to begin with. Everyone agrees with the objective of making the process as open and transparent as possible.
If we ask ourselves right now whether there is a major deficiency in the way the CRTC operates that frustrates the will of people who want to intervene and if we look at the facts, it is difficult to see that there is a problem. The number of people who intervene before the CRTC on broadcasting matters is very high. People intervene en mass. They write letters and they appear before the commission. People are concerned about when a licence is up either for attribution or for renewal in their communities and they do intervene.
The process right now is quite open and transparent. The commission has that as one of its objectives. It puts a lot of effort into making its proceedings as open and transparent as possible, and it garners a lot of attention and input from the public. At the first step, if you ask yourself whether there is a problem that is in desperate need of being fixed, I have yet to see that. I understand that the advocates of this bill have argued that there is a problem. We can look at some of the major proceedings that have taken place, such as the licence renewals of Global TV, CTV and the CBC. There was a tremendous amount of public input. We at the department have never received a complaint from someone saying that they wanted to intervene, do research, present their own views and were denied the opportunity because they did not have the financing. That point has never been raised with us. We have never received an indication that there is a problem that needs to be fixed.
The Chairman: In fairness to those who appeared before us in favour of this bill, I do not think many of them argued that they were not able to appear. They were suggesting that the quality of the work they could put into their briefs was not of the calibre they would have wished because of a lack of resources. I did not hear anyone say they could not get to speak in front of the CRTC or they could not write a letter to the CRTC. Their representations were of another nature. I though it was pretty important to get that comment on the record.
Did you have any final remarks you want to leave with us?
Mr. O'Sullivan: No. I am here to make myself available to answer your questions. Thank you for this opportunity.
The committee adjourned.