Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 4 - Evidence, April 8, 2014
OTTAWA, Tuesday, April 8, 2014
The Standing Senate Committee on Transport and Communications met this day at 9:31 a.m. to examine the challenges faced by the Canadian Broadcasting Corporation in relation to the changing environment of broadcasting and communications.
Senator Dennis Dawson (Chair) in the chair.
[English]
The Chair: Good morning. Pursuant to the order of reference adopted by the Senate, the committee continues its study on the challenges faced by the Canadian Broadcasting Corporation in relation to the changing environment of broadcasting and communications.
This morning we have witnesses from ACTRA: Ferne Downey, National President; and Marit Stiles, Director of Policy and Communications. Ms. Downey will make a statement.
If I may, the deputy chair of the committee wants to put something on the record concerning correspondence from a former witness.
Senator Housakos: Honourable senators, I would like to take a few moments to put on the record my thoughts regarding an email that came to my attention. Ian Morrison from Friends of Canadian Broadcasting put out an email asking support and donations while spreading misinformation. His claim is that this committee, through Senator Plett and me, has a hidden agenda against the CBC/Radio-Canada. Furthermore, he claims that this study has been covertly driven by the Prime Minister and the government. These claims are completely false.
The only trigger for this study has been a genuine interest in public broadcasting, the CBC and the changing environment in broadcasting as well as CBC's loss of the iconic ``Hockey Night in Canada.'' We determined, as a committee, that the time had come for a comprehensive and fair review of one of Canada's largest Crown corporations. I have embarked on this study with an open mind and an objective to improve Canadian public broadcasting, not to shut it down.
All my questions are on the record and reflect a balanced approach while looking into all aspects. Some questions can be viewed as pro or con, but all questions are designed to stimulate debate so that our study is wide-ranging. Mr. Morrison's focus on one of my questions, which he took out of context in order to create an issue where it does not exist to stimulate fear, is disingenuous.
Thank you, Mr. Chair.
The Chair: I asked Senator Plett, who was copied on the email, to send us a copy. Since I'm not on the list of membership of Friends of Canadian Broadcasting, I wanted the clerk to have a copy. The same email will be sent to all members of the committee so they are up-to-date on what Senator Housakos was talking about.
[Translation]
I apologize for the interruption. Ms. Downey, please go ahead.
[English]
Ferne Downey, National President, ACTRA: Good morning. I'm Ferne Downey, actor and National President of the Alliance of Canadian Cinema, Television and Radio Artists. Thank you for inviting us to be part of this very important study. It's an honour to be the voice of 22,000 professional performers, members of ACTRA, whose work entertains, educates and informs audiences in Canada and around the world. I am joined by ACTRA's National Director of Public Policy and Communications, Marit Stiles. You have asked us to comment on the challenges faced by the CBC in relation to the changing environment of broadcasting and communications. It's a pleasure for us to be invited to do so.
The history of ACTRA is inseparably linked to the CBC. Indeed, my personal history, like that of so many Canadian actors, is intertwined with the CBC. Fresh out of Dalhousie Theatre School in Halifax, my first professional acting gig was in CBC radio drama in the late 1970s, but my work in radio drama continued for many years after moving to Toronto until this very popular programming was cancelled. We'll touch on that a bit later.
From ``Mr. Dressup'' to ``Degrassi High'' to ``The Beachcombers,'' ``Heartland,'' ``The Red Green Show,'' ``Little Mosque on the Prairie,'' ``Afghanada,'' ``Republic of Doyle,'' ``Being Erica,'' ``The Rick Mercer Show'' — great Canadian stories, great Canadian characters; and great Canadian actors brought them all to life. Without the fabulous performance of Robert Clothier as Relic, would ``The Beachcombers'' have become a Canadian classic? Erica, on ``Being Erica'' was vividly realized by the performance of a great young Canadian actor, Erin Karpluk. Can you imagine Canadian TV without Rick Mercer? Let's hope we never have to.
ACTRA began when our predecessor union was created at CBC Radio in the mid-1940s. Then as CBC Television facilities were established across the country in the 1950s, we evolved into ACTRA and opened branches in the locations where the CBC launched local television services and hired local performers. Given this historical relationships, it is not completely surprising that ACTRA has always supported and continues today to advocate for a strong national public broadcaster. Indeed, there are few who do not.
CBC has been an essential part of the creation and development of the pool of professional performing, writing and journalistic talent in our country. CBC has been critical to the development of an infrastructure on which private broadcasting and an independent production industry could thrive and grow — both an incubator and a vehicle for showcasing our talent internationally. Like many of you, we have been concerned that the changing broadcast and communications environment would negatively affect CBC along with a constant threat of cuts to CBC's funding. The loss of ``Hockey Night in Canada'' has brought these issues into sharp focus, but we choose to see this as a challenge to be overcome — an opportunity to make the CBC stronger and to grow our Canadian content.
CBC management and government will be looking at how the CBC can deal with these changes. Valuable time has already been lost where instead of addressing their reliance on revenues from ``Hockey Night in Canada,'' CBC management increased their reliance. We believe any decisions regarding the future of the CBC should be guided by several key principles.
CBC must aspire to a Canada-first approach to programming with an aim to airing 100 per cent Canadian content and a particular emphasis on categories that are historically under-represented and not as freely available on other platforms, such as our programs of national interest, regional programming and children's and youth programming. We believe that the CBC must continue to support the Canadian drama production industry, in no small part by negotiating fair terms of trade with independent producers.
The public broadcaster must be an open and accessible space, not unlike the way we Canadians view our parks that give Canadians the opportunity to engage in activities they might not otherwise have access to. It must welcome Canadians of all economic and ethnic backgrounds by giving them a voice and sharing their stories and by being a place where Canadians can connect with one another and exchange ideas, stories and experiences. This is not the mandate of a private broadcaster. Private broadcasters are beholden to shareholders. As a public broadcaster, CBC has a higher calling. CBC is responsible to the country's citizens.
ACTRA recommends that CBC, in its role as Canada's national public broadcaster, shouldn't settle for simply maintaining the status quo. Rather, it must strengthen and reinforce its position as a pillar of Canada's digital economy and an important cultural and economic generator.
In recent years, CBC has not been a distinct alternative to private broadcasters. To be a true alternative, CBC must not only reflect the current reality of Canada but must challenge us to reflect on our history and our future.
CBC must not be in a position where its programming choices are driven exclusively by the potential for mass commercial appeal. Only a public agency can afford to take the risks inherent in producing unique, niche programming. In ACTRA's view, which happily is a view shared by many Canadians, it is the role of the government to give CBC the resources to take these risks.
CBC must also do better in offering original, quality programming to children and youth. Canadians who feel passionately about the corporation say they grew up with CBC. They have fond memories of connecting with the public broadcaster at various points throughout their lives. Particularly in this era of endless content anywhere at any time, you cannot reasonably expect a 25-year-old to suddenly get turned on to public broadcasting and go to the wall for the CBC. You must build that relationship over time. It must be constant, and it must be reliable.
By abandoning five- to seventeen-year-olds, CBC is doing a disservice to our youth and its own future. As you know, CBC has been moving out of children's programming. Last year, at their licence renewal hearings, CBC asked the CRTC to allow them to reduce some of the requirements around airing of child and youth programming. We fought that, and fortunately the CRTC did not allow this. Indeed, they made it a condition of licence that CBC air youth programming.
If CBC is merely mirroring what Canadians see on the private broadcasters, which is usually a seemingly endless stream of American programming, Canadians will be less inclined to appreciate the unique and precious mandate of the corporation. While ACTRA understands the considerable pressure that decades of underfunding have put on the public broadcaster, we cannot lower our collective expectations by sinking to the lowest common denominator.
CBC has produced some of the most important and entertaining radio drama in the world — award-winning shows like ``Afghanada'' and ``The Mystery Project'' series, programs that CBC has now abandoned despite their very low cost and devoted audience. Who will tell those stories now?
CBC has an obligation and a responsibility to provide Canadians with a forum in which they can see their stories and their heritage reflected on their televisions, tablets and radios.
Now, our second guiding principle: CBC must maximize investment in content, putting the broadcaster's resources on screen and on air, minimizing superfluous management structures and overhead costs. It's about a balance. I know it's not our job to tell CBC where to reduce these management costs, but we recognize that if we are going to ask for stable, long-term funding for our public broadcaster, we need to know that those dollars are spent on the creative side, on producing the high-quality content that Canadians actually crave.
As creators, we witnessed first-hand the impact of a lack of stable, long-term funding for CBC. Because make no bones about it, there is absolutely an impact on production. Let us take, for example, TV drama series. In our industry, we are often compared to high-quality, U.S. success stories. People wonder, why aren't we producing more shows like that? Some of this is understandably a matter of economy of scale. For every one TV series that makes it past the pilot in the U.S., there are hundreds that are dropped. They have their failures, too.
But once you pass that point, then what is the difference? Well, creators and showrunners do much better when they're playing the long game, not just planning for a short season. To create lasting and engaging shows, you need time for the characters to evolve and for storylines to flourish. At CBC, we have seen in the past too many great shows yanked just as they're finding their stride and beginning to build that audience. That's not how you create high-quality television, and that is not how you build a star system in this country that can compete with U.S. studios.
Third, we maintain that CBC should move toward becoming commercial-free. With the end of ``Hockey Night in Canada'' and the recent addition of commercials to CBC Radio 2 and Espace Musique, we think the time is now to consider real alternatives. There needs to be a revenue model to support production of high-quality drama. If that can come without commercials, wouldn't that be better? Frankly, as I know you have been told before, we know that the loss of ``Hockey Night in Canada'' affects advertising revenue overall on CBC. If that requires government to pay more, then we support that.
Fourth, we believe that CBC must adopt a more representative governance structure, including an independent board of directors that includes Canadians from many walks of life, and specifically content creators.
In closing, I would like to reiterate that the key to CBC's ability to accomplish many of these objectives is a government commitment to long-term, stable funding. In our industry, we are always planning seasons and seasons ahead. We need our government to plan ahead as well. We need to invest in these exciting, innovative, green, creative industries that contribute more than $7 billion to our GDP. There is an increasing gap, as you are very well aware in this room, between CBC's Broadcasting Act mandate and its parliamentary allocation. This gap affects CBC's capacity to meet the needs of Canadians who depend on it to deliver on that mandate.
The Nordicity study conducted by CBC in 2011 found that, among the 18 major Western countries, Canada had the third-lowest level of public funding on a per capita basis for our public broadcaster. Canada's level of per capita funding was ahead of only New Zealand and the United States, so we were the third lowest. Our government's funding of CBC worked out to, at that time, $34 per capita, in 2009, compared to the $87 per capita average across the 18 Western countries. That's 60 per cent less than most of them.
Furthermore, CBC is competing in a changing environment. Competition comes not only from private broadcasters but from Internet service providers and over-the-top providers like Netflix that are not regulated at all by the CRTC and have no requirement to follow any of the content requirements, contribute to our domestic screen-based production industry, or even, and this is pretty surprising, pay retail tax. Netflix pays no retail tax in Canada.
ACTRA believes that the CRTC must get into the business of imposing the same conditions on over-the-top service providers. There must be an equal playing field, but also there must be the same recognition of the need to funnel some of those profits into content creation right here in Canada.
In closing this morning, let me again thank the Senate for undertaking these very important consultations. We appreciate the effort you have made to include the voices of creators, and I'm sure you'll hear from more. On film sets and in studios, on locations across this great country, our members are bringing characters to life, helping to tell the story of Canada in all its diversity. We have a great interest in ensuring those stories continue to be told on behalf of all of us, and we thank you for the opportunity to play this important role.
If you have questions for us today, Ms. Stiles and I will do our best.
The Chair: Thank you very much. We can tell the experience of communications coming from a specialist. I was listening to your list of former programming. One show you did not mention, which influenced me when I was young, was ``Quentin Durgens, M.P.'' It sensitized me to Canadian politics and possibly motivated me to become a member of Parliament 40 years ago, give or take a few years.
Senator Housakos: Welcome to our committee and thank you for a very informative presentation. I listened carefully as you ran through all the areas where the CBC plays such a significant role. You mentioned national and regional news and children's programming. You also talked about the drama industry and multicultural communities — obviously reaching out to linguistic minorities across the country. We heard the same message in Western Canada from witnesses who came to the committee. The reality is that we live in a country that is large in land and small in population. As time progresses, resources are becoming more and more limited. We all agree that Canadians find all of the outlined issues important. Each one is important to various segments of the Canadian population.
We have the Broadcasting Act. When the CBC was created, it was given a specific mandate, which was to promote Canadian content and Canadian culture. Of course, when you look at that specific mandate, there is nothing specific about it; it is very broad and all encompassing. All of the things we just outlined, one could argue, are Canadian content — the regional and national news, creating kids' programming from a Canadian perspective, and so on. The question that needs to be asked in 2014 with all the options that Canadians have in terms of information from the Web, private broadcasters and competitors is, can the CBC be all things to all people? The question I ask, and the question that this committee is grappling with in the next few months, is this: How can the CBC respond to all those needs and do it in a fiscally responsible manner, while taking into consideration proposals making the CBC advertising-free, for example?
It's a very general question, but can the CBC continue? I'm getting the sense that they're trying to satisfy many constituencies — Canadians who hunger for good, hard, international and national news, as well as local constituencies who want good regional news broadcasts, and minority language groups in the North by broadcasting in 11 native languages. With the resources they have and the challenges they face in terms of broad competition, can they continue to satisfy all those constituencies? Is it perhaps time to sit down, focus on the most important Canadian content and what Canadians want to focus on, and make a priority list?
Ms. Downey: Your question is the most urgent one we face, isn't it? I don't think there is an easy answer, which is why you are dedicating your intelligence and resources to this work. It's an intriguing time. As you said, it's now 2014 and not the beginning of time when CBC became our public broadcaster. There is so much opportunity inherent in 2014 going forward in terms of the possibility of reinvention. Many of us would concur that there is a chance to say: Here is what we need to do; this is what our mandate is that we should and must do. And the core mandate is a very powerful mandate for public broadcasting. However, there has to be such a new vision for how everyone is going to go forward. Unless you have a long-term strategic plan that is supported by everyone, including the federal government willing to say that if you make a long-term strategic plan that is clear, open and transparent they will concur with your choices. If you find something that is adaptive to the new environment such that the government can say it is a brilliant long-term plan, they will increase your allocation. It is a vision I have. I know it's ambitious, but I believe it is practical and possible.
Marit Stiles, Director of Policy and Communications, ACTRA: Can the CBC be everything to everybody? Perhaps not, as it has a very broad mandate. The problem we are facing is leaving it to the private broadcasters to meet some of that mandate. Private broadcasters are beholden to their shareholders. Their motive is to build more ad revenue, so they will not necessarily cover the kind of programming that Canadians want to see. That's why the CRTC put certain regulations in place — to ensure a certain amount of Canadian content on even our private broadcasters.
You would have to strengthen those relations enormously to in some way offset. I don't know that the CRTC or anybody is particularly interested in doing that to the private broadcaster because there would be resistance. The CBC has to be about meeting Canadians' objectives and Canadian content. The one thing they should do is focus more on that and less on other programming that isn't Canadian. We need to focus on local stories and Canadian news that covers our perspective on international affairs and to support our industry by telling Canadian stories.
Senator Housakos: We hear constantly the argument that you don't want to be beholden to private broadcasters because they are beholden to their shareholders. The reality is that everybody has shareholders. CBC/Radio-Canada has shareholders: the taxpayers. This belief that somehow CBC is immune to shareholders and responsibility to them does not jibe with me. Unfortunately, unlike CTV, Bell Media and other private broadcasters who have shareholders meetings, the only way for us as parliamentarians to evaluate is through the ratings; and I'm open to suggestions if there is a better way to evaluate the bang for the buck on behalf of taxpayers. As a committee, we have received the ratings, the BBMs, from the various shows. We have perused and gone through them. Of the prime time drama shows, two of the English programs that CBC airs are in the top 30. Their ratings are consistently dismal.
I am in favour of Canadian content. I remember watching a Canadian production about Victor Malarek's life. It was an amazing film. I recently saw the Canadian film on the life of Don Cherry, which I thought was fantastic. I identified with it and want to see more of that. However, I don't see much of that type of quality for the money at CBC. If we judge CBC on their shareholders, we find that they're not getting the viewing audience that we would like them to get; and why is that?
My other question is are you in agreement with us that maybe we should spend a little less money at the top and a little more money at the bottom on the people who actually produce Canadian content — the actors, producers and directors? I have been in business my whole life. Each time I crack the cheque for charity, the first question I ask is what percentage of that money is going to the charity and what percentage is going to administration? I would like to have your opinion as to how we can correct that.
I suspect that we're spending far too much time administering this corporation. In my view, we have been spending far too much money as a public broadcaster on news and less time, energy and effort on Canadian drama, Canadian kids' shows and the things I agree that Canadians would be willing to switch channels to see because it is more about the Canadian mosaic.
Ms. Downey: I will start with the private broadcasters. Yes, the private broadcasters have shareholders and shareholder meetings. I too would be interested in knowing the broader governance understanding of how CBC does what it does. Is every thin dime spent on the screen or on the microphone in the studio? It's fair to assume that over the decades, without some charismatic leadership inside the CBC, there were too many middle managers. I think they're beginning to deal with that in their strategic planning now. Private broadcasters do it differently than the public broadcasters in every way. They have different Canadian content requirements.
BBMs alone are kind of an odd measurement since the digital revolution. You really have to blend all the numbers. I think we all have kids who only watch shows on their tablets and phones, and the blended numbers are getting more intricate.
You're absolutely fair to say that CBC only has a couple of shows in the top 30 because they haven't had the resources to build the audiences to follow them. It takes actual nourishment. It takes devotion. When CTV and Bell Media decide to make a hit out of a show because they think it's looking pretty good, like ``Motive'' or something like that, they put everything into it, every cross-promotional opportunity.
Look at CBC and all their beautiful platforms. Their digital space is excellent. The conversation in CBC's digital space is really, really good. To translate into higher audience numbers, that has to get goosed up even more in terms of focusing on the work and nourishing it. It's becoming quite challenging for audiences to find the work, to actually know. It's not so much destination broadcasting anymore. It is to find the work, to know who's in it and to know why it's important.
Senator Mercer: Thank you very much for being here. As I read your document, I was going one, two, three, four, and I think I actually found a number five in there, too. You are right on.
Senator Housakos asked one question that I don't think you answered, which was the one on the administrative side. You do say in your brief that you don't have the answers on that. I think one of the things that come through to me as I listen to this is that we need to consolidate and shrink the administrative side of CBC/Radio-Canada into a very good business model of how you run a place like that. This is an organization with three hits — a Toronto hit, a Montreal hit and an Ottawa hit. No wonder they have trouble doing what they want to do.
When talking about not having enough shows in the top 30, you also referred to not allowing them to build up a relationship; I'm sure that ``Coronation Street'' was not a hit when it first came on. Now it's a show that has gone on for it seems eons. I'm not a fan or someone who watches the show, but I know people who faithfully watch it. They tape it through the week and spend their Saturday mornings catching up on what's going on. It's that kind of thing, not just resources but the will and commitment to be the best we can be. I really think that that's one of the things we need to do.
I'm having a hard time wording a question because I agree with pretty well everything you've said. We have some very good production houses in Canada, people producing films. We have talked in this committee over the last while about the possibility, since all this time has to be filled because of the absence of hockey, of moving CBC to showing more Canadian films and Canadian documentaries in those time slots.
Your first recommendation is something we should aim for, 100 per cent Canadian content, and defining that content is something else — children's programs, documentaries, stand-alone shows, movies and news, because they do news quite well. If we went to this model, can the industry respond, and how quickly can the industry respond?
Ms. Downey: Oh, I think we could respond with rapid adaptation. We're very adaptable as an industry.
In truth, most of us are committed to making Canadian work. We all work as actors and service industry production and animation and other forms as well, but you're still making the good work. It's finding the home for the good work and having somebody make the choice to say, ``I want to make this good work and I'm going to give it a home; I'm going to build an audience for it on my channel.'' CBC would not lose that imperative. We would still be doing the work. There wouldn't be a profound change in the system. The change would be more profound within the internal workings of the CBC by their imposing their own will on themselves about how they're going to be. Does that make sense?
Senator Mercer: Yes.
Ms. Stiles: I hope I am understanding your point, but we have a very mature production industry, and there are certain centres where we have a very significant-sized industry, such as Toronto and Montreal and Vancouver.
Senator Mercer: And Halifax.
Ms. Stiles: Yes, and Halifax. Because of the CBC, we have these regional centres as well that have the capacity to create great Canadian shows. Look at ``Republic of Doyle.'' Albeit that employs a lot of the St. John's production industry, it has also meant that those people employed on ``Republic of Doyle'' are able to become better at what they do. It's built the industry. They can now produce great films. They always have, but it's expanding their capacity. There's no problem meeting the needs. It's just whether or not the funding and the mandate are there to do so.
Senator Mercer: In the production, of course, both the federal and provincial governments have offered tax incentives. Do you think we need to continue to do that, or do we need to change it? Do you have some thoughts on that?
Ms. Downey: Yes. Tax credits. Because we're a relatively small country compared to the great entertainment behemoth to our south, our licence fees paid to production are small because they're based on the population. In Canada, in my humble prediction, we will always need the stability of tax credits. Stability — I know we said it about 101 times in my report, but I would say it 1,000 if I could. If you can't plan forward, there are no plans. Production doesn't respond well to chaos, uncertainty and instability. Knowing the certainty of the tax credits and knowing what will happen year after year is how production gets made.
Senator Mercer: I think it's important to recognize that tax credits are not something uniquely Canadian. I happened to catch on an American network recently when I was watching that the New York State, and I couldn't believe this, was advertising in other states to attract industry to the state of New York and was offering not a tax break but 10 years tax-free for companies to come and move to the state of New York. This is a competitive business, and we need to be in this.
You talked about a representative governance structure. I like that. One of the problems we will have at the end of this is that the appointments to the board of directors of CBC, by the nature of how it's structured, are political. The government of the day appoints the members. I think maybe we need to put caveats on that, that there need to be people from the production side and some creative people to help bring that to the fore. You did not mention the appointment of the president of the CBC, who is now currently appointed by the Prime Minister as opposed to by the board of directors. Do you have an opinion on that single appointment?
Ms. Downey: I don't have an opinion on behalf of ACTRA. My observation has simply been, in the broadest sense, that CBC needs some invigoration in its governance, and some of the strongest, most invigorated governance that the corporation ever had is when there were more artists directly involved with the leading of the public broadcaster. I'm open to anybody's good ideas about how that would be and how annual reporting might be more real to us, the taxpayers of the country. I think there is a lot of opportunity to shine light in corners that have gotten a little grey.
Senator Mercer: I noted in your presentation that there was no reference to Radio-Canada, and I assume that's because Radio-Canada is actually doing some of the things you've already suggested about the production and the promotion of Canadian products. They don't have a French-language competitor like the English side of the network. Am I right?
Ms. Downey: That is correct. I would say that as a listener, when you tune into CBC Radio One, you know where you are. You're at CBC Radio. I was formerly an avid listener of CBC Radio 2. I happened to not enjoy the concentration of commercials currently being offered in their experimental three-year pilot project, so I'm finding that a little challenging. CBC Radio has built some stars and has some extraordinary news and cultural conversations going on that make me proud of the radio service.
Senator Mercer: With too many reruns now.
Ms. Downey: Well, yes.
Senator Demers: Thank you so much for what you describe and your honesty. That's important to us. I haven't been on this committee for long, but both sides are working extremely hard to make CBC/Radio-Canada better; and our objective is to work with you people. I want you to know how important that is for us.
Would either of you please describe the current Canadian market for your member services? How has it changed over the past 10 years? What percentage of your members move to the United States to pursue opportunities in that market?
Ms. Downey: In the last two or three years in Canada, particularly in our biggest cultural centre of Toronto, there has been a diversification in the kind of work opportunities my members have: video games out of Montreal and Toronto; extraordinary animation and children's programming; and voice commercials. We do a lot of Canadian television because Canadian TV series are superb in the world and one of our best exports. Canadian English-language feature films get produced, but they find no home as nobody is showing them. That's a bit of an odd category for us.
In general, my members have diversified their career opportunities, because we're a small country, by doing different work. Some of my younger members at the top of their game have already had six TV series as child stars, particularly in shows like ``Degrassi'' that have built a talented group of highly skilled professionals. They come to a point in Canada. They're 19 years old now and are looking at their options. They're in Toronto, Vancouver or Montreal and ask, ``What's my next series? I'm aged out of playing a teenager.'' They look around at what's available to them and see these relatively small-cast ensemble shows. If there's not a role for them because TV is most real for them, they go to Los Angeles for pilot season and compete to get an O-1 visa. I have so many members with a Los Angeles address that I hold information member meetings in L.A. once per annum.
Senator Demers: You said something at the beginning. When it's well done, there's nothing wrong with being ambitious, with having high ambitions. There's nothing wrong with that, trust me, when it's well done. Thank you.
Senator Eggleton: Thank you very much for your submission, which, along with my colleagues, I substantially agree with. I want to pick up on the preamble by Senator Housakos.
We have come to an agreement that we need to see some change in the way management is structured and perhaps see some changes in the Broadcasting Act in terms of the CBC. On your assertion that we cannot be all things to all people, that's a generally accepted phrase, isn't it? We have to bear in mind that we are a very diverse country. We're diverse in terms of cultural backgrounds, language and region. To be the top public broadcaster for Canada is a big chore. You have to please a lot of different people and relate Canadian stories to a lot of different people.
The problem is that they're not all going to be popular. They're not all going to be of the popular range that will compete with the American entertainment industry, which is a formidable industry with lots of money that is difficult to compete with. However, there are other tastes and cultural desires in this country that have to be addressed. They're not all going to get good ratings. That's the problem, but they won't all get good ratings. That's the problem we have to come to grips with. We can't expect all programming to get good ratings.
The other thing we have to come to grips with — and you won't want to hear this — is that this government has starved the CBC. If you starve an entity like that, it obviously has to cut corners here and there and reduce its investment in quality programming. Quality programming will help the ratings, too, by the way. If you keep starving it like this, of course the problem gets worse and worse. We need to find a resolution in terms of the funding to the CBC. I'll go to my question now.
With respect to a funding mechanism, rather than leaving it to the annual parliamentary appropriation that the government recommends, which can go up and down with the economy and policy of whatever government, what would you think about a separate stream? A couple of people have come before us who said that we need to do something like the U.K. does. They have a licensed system and all people pay for having the service. The BBC seems to operate quite well on that.
Somebody else was here last week who suggested adding a 7 per cent surtax on telecommunications companies — the private sector — not just broadcasting companies, which would produce a fair chunk of money. I believe he suggested $3 billion a year. Any thoughts about that?
``Newsworld'' versus the main network: Is it feasible to see all the news and information services on a news network and make it a commercial operation? It would be in competition with the private sector in terms of the provision of news. Would it make sense to do that and keep the main network free of commercials and focused on drama, comedy and other programming? Those are just a couple of thoughts on funding that I'd like a reaction to.
Ms. Downey: I'll talk about the news being on one news stream, which is a kind of specialty channel model. Specialty channel models don't have the broad audience uptake that the big channels have. That's just true. Over-the-air, big conventional TV channels bring you the biggest audience. There's something that I instinctively like about the mix of real life as a Canadian being part of the public broadcaster. I'm still interested in Canadian programming, including news, being on the main broadcaster; but the idea might be interesting to explore. In truth, I've not given it much creative imagining. I'm going to ask Marit for her thoughts.
Senator Eggleton: I asked another question about funding.
Ms. Stiles: I'm going to comment on that. We've seen some studies, which I don't have with me, and have participated in some public polling and such over the years to see whether Canadians have an interest. We know that Canadians overwhelmingly support the CBC. Some studies have indicated that Canadians might even be willing to pay more for that in one way or another. Maybe it could be a system along the lines of what they have in the U.K. I don't know whether that's the way to go, but I think you're onto something when you talk about additional sources of revenue coming from other sources like Netflix, which doesn't even pay sales tax. No taxes are being paid by Netflix, which resides here. Certainly, I appreciate my membership in Netflix to watch lots of great Canadian shows. However, there's nothing coming into the Canadian revenue stream form Netflix.
Internet Service Providers, ISPs, are a source of potential revenues that we're not exploring yet, and the CRTC doesn't want to get into the business of regulating them. That's one avenue we could explore. A deep analysis has to take place. I guess we're all here today because the CBC has postponed this conversation, in a way, for so long, as has the government because they were so reliant on the NHL. Hopefully now is the time to explore some of those new sources.
Senator Eggleton: I'm picking up on something you just said a moment ago. You said ACTRA believe that the CRTC must get into the business of imposing the same conditions on over-the-top providers. What could the CRTC do to help ensure either Canadian content or that they pay into the fund in some way supporting Canadian content? What do you suggest?
Ms. Stiles: Impose the same conditions that they impose on private broadcasters.
Senator Eggleton: Is it possible to do that in view of the nature of the —
Ms. Stiles: Yes. In fact, I believe the chair of the CRTC has indicated that he thinks they have the ability to do that but they just aren't interested in taking that step right at this moment. Is that right?
Ms. Downey: That's my understanding. We have long begged to have more money in the system. At the Canada Media Fund, everybody pays something from the broadcast distribution undertakings, except Netflix, Apple TV and all those providers. It seems a little bit crazy. I think there are 4 million subscribers in Canada currently to Netflix, and none of that is helping generate any new content or support existing content creation in our country. We have to find money for the CBC somehow, and I'm willing to explore any and every opportunity.
Ms. Stiles: On your point about the Canada Media Fund, it's worth noting that it's the current government that actually made Canada Media Fund funding long-term stable, which is very much appreciated by the industry. It makes a huge difference. We would always like to see the funding increased, but it has definitely helped the industry.
Senator Housakos: I was listening with great interest to Senator Eggleton's preamble to his question. I certainly want to state for the record, Senator Eggleton, that if over $1 billion a year in subsidies is starving somebody, let me tell you that I wouldn't consider that a fair assessment.
Furthermore, there's no doubt that this government has been fiscally responsible and has had to work within the confines of fiscal restraint. By the way, the previous Liberal government had gotten the ball rolling on that. When previous Liberal governments were making much more Draconian cuts to the CBC than we have, I didn't see many of the Liberal independent senators tearing their shirts in disgust and standing up on principle on that issue. We understand there are limited resources in government, and the question in debate here is you try to do the best you can with those limited resources.
It's nice to belittle and disregard ratings, but unfortunately ratings are the only thing that we have at our disposal to evaluate things. I do agree with you that it's not the only way to gauge it, but right now I would challenge anybody to find one piece of programming that the CBC does where they're in the top three or five or six. The case in point would be national news, where you can easily compare them with private broadcasters who produce Canadian content national news. For me, news is news.
The Chair: And the question is?
Senator Housakos: It's coming. I agree with everything you have said as well. Unfortunately, I don't think there's an appetite in the Canadian public to go to them and say we will double and triple funding from the Government of Canada on behalf of Canadian broadcasting. The question is, what suggestions do you have to this committee that we could put in our report that can help Canadian broadcasting come up with more resources while respecting certain fiscal realities of today's era?
I use the BBC as an example. I've reviewed their funding mechanism. Indeed, they get a lot more money per capita than Canadian governments have ever put into public broadcasting. If you look at their sources of revenue, they're not exclusive to just the government of the U.K. They get funding from international sources and from sponsors. They have come up with alternate sources of revenue. Clearly, it seems to me the strategy at CBC/Radio-Canada is that their alternate source of revenue is ratings. The gauge of evaluating their success or failure hasn't been determined by this committee or this government; they themselves have used that as their only means of alternate revenue.
Back to the original question, I'd like to know specifically from you people out in the field who know this industry what other sources of revenue besides charity from the federal government can this organization count on in order to be able to continue to respect the very honourable objective of defending Canadian public broadcasting?
Ms. Stiles: We don't have all the answers here. I totally agree with you. I think ACTRA would completely agree that we have to look for those additional sources of revenue and that it is probably not going to fly to go to Canadians and talk about this idea of a licence fee. I think that's a long road that requires great government buy-in and a lot of promotion. I believe Canadians probably would be willing to increase their contribution to the CBC.
I go back to the future of broadcast and the ISPs and the over-the-top, OTT, providers. Increasingly we're seeing that that's where Canadians are consuming that content. Let's take advantage of that and put that back into the CBC or directly into content creation, like they have done with the CMF. I don't have the magic bean that's going to grow that CBC at this moment. Do you have anything to add?
Ms. Downey: I wish I did. I don't think it is charity from our taxpayers' dollars. I must say, I'm expecting out of all of this good work here a new kind of approach to what the CBC will be and be able to be. If everyone can be convinced by what the long-term, strategic plan is, what CBC believes it really can do, not to be all things to all people but to do what it is meant to do and to do that with all of its integrity focused, then if you get the strategic plan first, I think the alternate sources of funding would have to be creatively found, but you can't do that until you have faith that the strategic plan is one everyone can buy into.
I think Canadians still have a profound, deep appetite for this work and, properly consulted, might surprise you.
Senator Housakos: Thank you.
Senator Eggleton: Oh, I've got one more.
The Chair: As long as it's in the form of a question.
Senator Eggleton: Can I not do another preamble? We'll, I'll leave that for another occasion.
I just want to ask you about the replacement for the NHL hockey games. I take it, at least in the initial years, that they're probably still going to be broadcast on the CBC courtesy of Rogers, however that's fed. What do you think ultimately should replace NHL hockey? What kind of programming would you suggest?
Ms. Downey: Programs with me in it would be good.
Ms. Stiles: I'd support that. There are lots of ideas out there. There's a lot of talk about having a Canadian movie night where they actually put some resources in and have some additional content, interview the performers and directors, do some documentary behind-the-scenes stuff and showcase Canadian film. As Ferne was saying, we have a great problem in the distribution of English-language movie features in this country. That would be a great avenue. That's one idea I know folks have been talking about. Otherwise, investing in actually great Canadian content that's going to generate viewers and interest and, in this case, if we're not talking about an add-free CBC, ad revenue.
Senator Eggleton: It has to be better than Maple Leaf hockey games.
The Chair: Coming from a former mayor of Toronto, I'll accept that as a closing remark.
The chair also has closing remarks. If you really want to threaten the CBC, we could broadcast the Senate on Saturday night. It would be about the number of hours we would have in a year. If you're really threatening the CBC, you will get all the emails you want from Friends of the CBC if you do that.
That being said, more important, during our visit to Yellowknife, the Northwest Territories Arts Council presented a document to us that I would like to put on the record, if you agree. It will be sent to your offices and become part of our testimony.
Our next meeting is tomorrow, and we have the Association of Canadian Advertisers. On April 29, the committee will meet with the Privacy Commissioner on the collection of consumer data. The day after, we will be meeting with Bell Canada on the same subject. After that, we will most likely be in a pre-study on transport and communications issues dealing with the budget implementation bill. That would probably mean most of May. After that, we will have to decide what we will be doing in June. If we still have budget implementation meetings, we will continue on that. If not, we will come back to our CBC study.
Witnesses, I would like to thank you on behalf of committee members. This is a long, ongoing study, and you will have the opportunity to follow us over the next few months. We appreciate your presentation and can see the communications talent, as I mentioned before. Congratulations on your presentation.
(The committee adjourned.)