ARCHIVED - Transcript
This page has been archived on the Web
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
Providing Content in Canada's Official Languages
Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS FOR THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION TRANSCRIPTION DES AUDIENCES DU CONSEIL DE LA RADIODIFFUSION ET DES TÉLÉCOMMUNICATIONS CANADIENNES SUBJECT / SUJET: CANADIAN TELEVISION POLICY REVIEW / EXAMEN DES POLITIQUES DU CONSEIL RELATIVES À LA TÉLÉVISION CANADIENNE HELD AT: TENUE À: Conference Centre Centre des conférences Outaouais Room Salle Outaouais Place du Portage Place du Portage Phase IV Phase IV Hull, Quebec Hull (Québec) October 2, 1998 2 octobre 1998 Volume 8 tel: 613-521-0703 StenoTran fax: 613-521-7668 ii Transcripts Transcription Afin de rencontrer les exigences de la Loi sur les langues officielles, les procès-verbaux pour le Conseil seront bilingues en ce qui a trait à la page couverture, la liste des membres et du personnel du CRTC participant à l'audience publique ainsi que la table des matières. Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est enregistrée et transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience publique. StenoTran iii Canadian Radio-television and Telecommunications Commission Conseil de la radiodiffusion et des télécommunications canadiennes Transcript / Transcription Public Hearing / Audience publique Canadian Television Policy Review / Examen des politiques du Conseil relatives à la télévision canadienne BEFORE / DEVANT: Andrée Wylie Chairperson / Présidente Vice-Chairperson, Radio- television / Vice- présidente, Radiodiffusion Joan Pennefather Commissioner / Conseillère Andrew Cardozo Commissioner / Conseiller Martha Wilson Commissioner / Conseillère David McKendry Commissioner / Conseiller ALSO PRESENT / AUSSI PRÉSENTS: Jean-Pierre Blais Commission Counsel / Avocat du Conseil Margot Patterson Articling Student / Stagiaire Carole Bénard / Secretaries/Secrétaires Diane Santerre Nick Ketchum Hearing Manager / Gérant de l'audience HELD AT: TENUE À: Conference Centre Centre des conférences Outaouais Room Salle Outaouais Place du Portage Place du Portage Phase IV Phase IV Hull, Quebec Hull (Québec) October 2, 1998 2 octobre 1998 Volume 8 StenoTran iv TABLE OF CONTENTS / TABLE DES MATIÈRES PAGE Presentation by / Présentation par: Shaw Communications Inc. 2280 Pelmorex Inc. 2380 Telefilm Canada 2431 WGC, Writers Guild of Canada 2500 Canada Television and Cable Production Fund / 2532 Le fonds de télévision et de câblodistribution pour la production d'émissions canadiennes The Writers' Union of Canada 2605 SARDeC, Société des Auteurs, Recherchistes, 2625 Documentalistes et Compositeurs StenoTran v ERRATA Volume 7 October 1, 1998 / Le 1er octobre 1998 Page Lines / Lignes 2010 23-24 "les trois tests" should read / devrait se lire "l'étroitesse" StenoTran 2280 1 Hull, Quebec / Hull (Québec) 2 --- Upon resuming on Friday, October 2, 1998, 3 at 0904 / L'audience reprend le vendredi 4 2 octobre 1998, à 0904 5 10671 THE CHAIRPERSON: Good morning. 6 10672 Madam Secretary? 7 10673 MS BÉNARD: Thank you, Madam Chair. 8 10674 The first presentation will be by 9 Shaw Communications Inc. and I would invite Mr. Shaw to 10 introduce his colleagues. 11 10675 THE CHAIRPERSON: Good morning. 12 PRESENTATION / PRÉSENTATION 13 10676 MR. SHAW: Good morning. 14 10677 Madam Chair and Members of the 15 Commission, I am Jim Shaw, President of Shaw 16 Communications, and beside me is John Cassaday, 17 President and Chief Executive Officer of Shaw Media. 18 With us today are Ken Stein, Senior Vice-President, 19 Corporate and Regulatory Affairs, Shaw Communications; 20 Paul Robertson, President of YTV; and Susan Ross, 21 General Manager of Treehouse TV. 22 10678 Behind me are Katherine Browne, Vice- 23 President of Finance for YTV; Peter Moss, Vice- 24 President of Programming and Production, YTV; Sheldon 25 Teicher, Vice-President, Corporate Development, YTV; StenoTran 2281 1 Mary Wilson, Director of Broadcasting, Regulation for 2 Shaw; and Vicki Dalziel, General Manager, Country Music 3 Television. 4 10679 We are very pleased to be here and 5 have the opportunity to participate in such a landmark 6 hearing. As many have pointed out, Canadian Television 7 is a remarkable success story, both in culture and in 8 economic terms. The regulatory direction the CRTC 9 chooses as a result of this proceeding will have a 10 profound influence on the future of Canadian television 11 and we hope our appearance here today will be of some 12 help to you in your deliberations. 13 10680 Although the focus of this hearing is 14 on content rather than distribution, we are all aware 15 of how interdependent these two elements are. The best 16 Canadian programming will not succeed unless it is 17 effectively distributed to Canadian viewers. Our group 18 represents two very important elements of this system, 19 specialty programming services and broadcast 20 distribution systems. Our objective is to be 21 absolutely first class in both areas. 22 10681 Over the years it has been our strong 23 belief that we must develop and provide programming of 24 relevance to the communities we serve. Our community 25 channel known as NowTV uses video, audio and the StenoTran 2282 1 Internet to provide our subscribers with a full range 2 of programs and information that is relevant directly 3 to the community therein. We are also deeply committed 4 to investing in quality programming for children 5 through the Shaw Children's Programming Initiative or 6 SCPI. Over the past five years, we have committed 7 nearly $12.3 million. 8 10682 I will now ask John Cassaday to speak 9 to you about our perspectives on some of the content 10 issues you are considering and I will conclude with 11 some brief remarks on distribution. 12 10683 John? 13 10684 MR. CASSADAY: Thank you, Jim. 14 10685 Shaw is committed to the development 15 of specialty television in Canada. We believe 16 specialty television is meeting the test of supporting 17 Canadian content. We believe the system has been well 18 served by the diversity of programming introduced by 19 specialty services and by the current regulatory 20 approach of setting individual conditions of licence 21 for each service, which recognize the requirements of a 22 given niche in a competitive and fragmented 23 marketplace. We believe there is still potential for 24 growth in specialty television on the strength of 25 consumer interest and new capacity. StenoTran 2283 1 10686 In our written comments last June 2 30th we made a number of recommendations responding to 3 the issues raised in Public Notice CRTC 1998-44. 4 Recognizing the limited time available today, we will 5 limit our remarks to children's programming, an area of 6 long-standing interest to Shaw, and some general 7 recommendations that we hope will be helpful in a 8 broader sense. 9 10687 The Canadian children's programming 10 sector has experienced impressive growth over the last 11 few years. The combination of high production values 12 and our non-violent presentation has made Canadian 13 programs like "Theodore Tugboat", "Whimzie's House" and 14 "Groundling Marsh" domestic and international hits. 15 The regulatory and financial support system in Canada 16 is working to provide an environment that supports this 17 growth. Without the regulatory and financial support 18 systems, the phenomenal growth of children's 19 programming will diminish. 20 10688 YTV has contributed over $70 million 21 directly to the production of Canadian content 22 programming, which has enabled budgets exceeding $500 23 million over its 10-year history. We have sought a 24 diversity of voices from Salter Street in Nova Scotia, 25 Téléaction in Quebec City, Credo in Manitoba, Mind's StenoTran 2284 1 Eye in Saskatchewan and Mainframe in British Columbia, 2 not to mention our long association with the largest 3 companies in our industry like NELVANA, CINAR, 4 Alliance, Atlantis and smaller companies like 5 Breakthrough, Cambium and Decode. 6 10689 We have commissioned programs in 7 every genre: puppets, live action drama and animation, 8 both in traditional form and in computer-generated 9 imaging, and this year we have commissioned more than 10 145 hours of new production from the independent 11 sector. Treehouse TV, which has just launched, has 12 already commissioned three new Canadian television 13 series. 14 10690 The Canadian Association of 15 Broadcasters reports that Canadian viewers watch 16 Canadian programming 32 per cent of the time. Canadian 17 drama accounts for only 3.1 per cent of this viewing. 18 We are very proud to say that on YTV Canadian kids 19 watch Canadian programming 37 per cent of the time and 20 the programs are almost exclusively in the drama 21 category. Kids are watching lots of terrific high- 22 quality Canadian content. 23 10691 We firmly believe in the need to 24 provide more Canadian programs, of improving the 25 quality of Canadian programs and of doing so in a way StenoTran 2285 1 that is profitable for both broadcasters and producers. 2 There are a number of points that we would like to make 3 which we believe contribute to the continued growth and 4 success of Canadian programming. 5 10692 First of all, in the area of 6 children's programming, we believe continued 7 recognition of children's programming as an under- 8 represented category is essential. The importance of 9 public funding in making kids' programs cannot be 10 overstated. 11 10693 Next, we believe we must take care in 12 how we apply the test of "distinctively Canadian" to 13 children's programs. The exhilarating freedom of a 14 child's imagination should be stimulated by a variety 15 of programs available. Programs that espouse 16 distinctively Canadian values like "Arthur", "Little 17 Bear" or "Shirley Holmes" ought to be included in the 18 "distinctively Canadian" category. 19 10694 Next, given the high demand for 20 funding assistance and the high cost of adult drama 21 series, the Commission should recommend that the CTF 22 implement policies that will guarantee the availability 23 of existing public funds for kids' programming, both on 24 the EIP and LFP sides, and, if it all possible, to 25 increase the amount. Over the past two years, StenoTran 2286 1 approximately 30 per cent of the private broadcaster 2 envelope has been directed to children's programming. 3 10695 Next, we believe the CRTC should 4 encourage more shelf space for Canadian children's 5 programs. All broadcast sectors should participate in 6 kids' programs, public and private, conventional, 7 specialty and pay TV. We believe the Commission should 8 consider loosening the first-run restrictions to 9 encourage the sharing of broadcast windows between 10 conventional, both public and private, television and 11 specialty. 12 10696 Speaking now in terms of general 13 comments, we believe there should be encouragement to 14 promote Canadian programs and that these investments 15 should qualify as eligible Canadian program 16 expenditures. Finally, we believe the CRTC should 17 continue the practice of setting the obligations for 18 specialty channels individually. Each specialty 19 channel has a unique opportunity to support Canadian 20 programming in the fashion best suited to its genre and 21 audience. 22 10697 We are excited about the future of 23 broadcasting in Canada. Those of us who are privileged 24 to work in the Canadian broadcasting system -- CRTC, 25 funding agencies, producers and broadcasters -- must StenoTran 2287 1 all continue to contribute to the best of our abilities 2 to sustain the vibrancy of Canadian programming and 3 serve our ultimate constituents, the Canadian viewers. 4 10698 MR. SHAW: Turning to distribution, 5 Shaw has been pursuing a path set by the Commission in 6 its 1993 structural hearing by converting our cable 7 systems to a fully digital infrastructure. We believe 8 this conversion is essential both for the growth of the 9 Canadian program production industry and our 10 distribution business. As a sign of how important we 11 think this initiative is, we are spending more than 12 $200 million a year, almost one-third of our revenues, 13 to upgrade our distribution networks. Of this, more 14 than $50 million is specifically for converting to 15 digital. 16 10699 There are three key benefits for 17 Canadian programming and consumers: Digital conversion 18 opens up much needed channel capacity for new Canadian 19 programming services; the technology allows for much 20 greater flexibility in packaging services according to 21 individual subscriber choices; a digital platform 22 facilitates the provision of new media programming, a 23 new frontier of vast opportunity for all players in the 24 Canadian programming production industry. 25 10700 It is essential that Canadians StenoTran 2288 1 continue to be world leaders in developing technology. 2 Digital conversion of the Canadian broadcasting system 3 is just one of the initiatives we must pursue. 4 Developments in technology encourage new content forms 5 and innovative ways of getting information to the 6 public. It will also ensure distribution of this new 7 media content to a more sophisticated consumer of 8 Canadian information and entertainment products. 9 10701 That concludes our comments today, 10 Madam Chair. We would be pleased to answer any 11 questions. 12 0915 13 10702 THE CHAIRPERSON: Thank you. 14 10703 Good morning, ladies and gentlemen. 15 10704 We regret that you were kept in 16 Ottawa last night, but I think we will have a better 17 chance to hear you today than if we had tried to finish 18 last night. I realize it must have been a bit of a 19 scramble to get everybody organized. 20 10705 In this particular proceeding and in 21 the town hall meeting we had in June, we have had a lot 22 of representations to the effect that the networks are 23 getting ever larger and are abandoning local 24 programming. 25 10706 We certainly congratulate you on your StenoTran 2289 1 community channel, but what I find intriguing is the 2 suggestion that the community channel can perhaps not 3 replace local programming on television stations, but 4 at least you say that if the Commission were to decide 5 to impose or continue to require a certain level of 6 local programming on over-the-air stations, in doing 7 that it should -- your words are -- I'm looking at page 8 6: 9 "In assessing whether local 10 broadcasters should have 11 increased responsibilities 12 imposed for local coverage, the 13 CRTC should take into account 14 the important role community 15 channels are playing in this 16 respect." 17 10707 In your Executive Summary, you say at 18 page ii at the top of the page: 19 "-- the CRTC should assess the 20 responsibility of conventional 21 television for local coverage in 22 light of the important role 23 played by the community channel 24 in this respect." 25 10708 I find that intriguing. Is the StenoTran 2290 1 suggestion that the responsibility for local coverage 2 and local programming, if it were to decided that there 3 has to be more or the level has to be maintained, can 4 be replaced by the community channel? 5 10709 MR. SHAW: Well, I guess that when we 6 look at our new community channels in this, they evolve 7 with the changing consumer demands we have out there 8 today. The community channel is taking more of a 9 grassroots relationship role with the communities we 10 are in such as tying in with the city to inform people 11 of information on stuff that really wouldn't even be 12 considered for commercial television like how your 13 child would sign up for swimming lessons and how this 14 would work. 15 10710 There's a lot of interactive ability 16 on the community channel now with the Internet tied in. 17 Their focus is a lot different focus than on the 18 conventional side. 19 10711 We are seeing these new community 20 channels filling a broader role that is directly 21 focused on the community. 22 10712 THE CHAIRPERSON: But we are looking 23 today at what should the regulatory framework or the 24 responsibility of over-the-air conventional stations 25 be. You seem to be suggesting that that should be done StenoTran 2291 1 by reference to what the particular community is 2 getting via cable. 3 10713 The reason I am asking is 25 per cent 4 of Canadians are not connected to cable. The community 5 channel is not regulated. It has no logs. There is no 6 requirement for doing programming that is to that level 7 so it can be dropped during a licence term. 8 10714 I find intriguing the idea that when 9 we look at a conventional over-the-air station in any 10 given community, we should examine, and I am not quite 11 sure by what mechanism, what the community channel is 12 doing and, based on that, decide what requirements 13 should be imposed on the television station. 14 10715 I'm not questioning the level of 15 services offering and we certainly congratulate you on 16 that. Because of the process we are in, this 17 suggestion which I find intriguing, I would like you to 18 explain this position. For example, does it mean we 19 should keep logs, we should measure what's done in each 20 community. Are the community channels then going to 21 ask to do advertising, which is done in local 22 programming by the conventional station. 23 10716 How would we get assurances that this 24 presumed void is filled on a continuing basis by the 25 community channel? StenoTran 2292 1 10717 My question is in the context of what 2 we are looking at now, how to regulate or whether 3 changes should be made or not in regulating 4 conventional stations. 5 10718 MR. STEIN: I think that, as Jim 6 indicated, when we looked at how we served the 7 communities, we have served, and our cable system is 8 quite a diverse range of communities, everything from 9 the metro belt area of Toronto to smaller communities 10 in interior British Columbia and throughout the west. 11 10719 In looking at that, one is faced with 12 the fact that you are also faced with different local 13 broadcasting situations. We have tried to evolve what 14 we do in terms of what is being done. What one does in 15 Toronto is different than what you would do in Barrie. 16 10720 From a regulatory point of view, I 17 think what we meant in this statement was that it 18 really calls for flexibility in how one looks at the 19 situation. If you come up with one rule for all of 20 Canada in terms of the role of broadcasting in a 21 community channel and move to the point of saying we 22 will require these specific kinds of things be done, it 23 doesn't allow the development of the richness and the 24 diversity that is out there. 25 10721 We take a particular approach. It's StenoTran 2293 1 evolving. We probably change it quite a bit -- in 2 fact, every few months it's evolving as we learn new 3 things and as we get feedback from the viewers. 4 10722 I think from a regulatory point of 5 view, what we would look for is more flexibility in 6 terms of that and an assessment of what the local 7 broadcaster does would be done on a basis -- I think, 8 for example, major markets would be a big determination 9 of what you would see a local broadcaster do as opposed 10 to what you would see the local community channel do. 11 10723 THE CHAIRPERSON: So you see it 12 basically as competing in the local information or news 13 programming even with the conventional station. You 14 are going to watch what they do and do something else. 15 Is that really what the community channel's role is 16 supposed to be? 17 10724 MR. STEIN: No. I don't think I 18 meant to say competing with it. For example, just take 19 Calgary for example. In the morning from six to nine 20 we actually soundcast CBC Radio. We actually have a 21 camera in the radio studio. At night, in the evening 22 at seven, we repeat the CFCN local television news 23 again at seven o'clock on the "Now TV" screen. 24 10725 THE CHAIRPERSON: Isn't that 25 competition? StenoTran 2294 1 10726 MR. STEIN: No. We are trying to 2 work -- 3 10727 THE CHAIRPERSON: Because CFCN gets 4 ads presumably in its news, knowing that you can see it 5 on the community channel you may not watch it at six 6 o'clock or whatever. 7 10728 MR. STEIN: Yes. 8 10729 THE CHAIRPERSON: I don't want to 9 dwell on that overly, but I find it an intriguing idea 10 that the community channel which has a mechanism, a 11 certain role, to suggest that the television station 12 should be relieved of those responsibilities, whatever 13 they may be, by reference to what the cable operator 14 chooses to do in that market is an intriguing at best 15 suggestion in light of the role of the distribution 16 system and of its community channel. 17 10730 MR. STEIN: Yes. I think what we are 18 suggesting is in terms of looking at the role of the 19 broadcaster in the local area, one should take into 20 account the kind of capabilities that exist on the 21 community channel. I think we weren't trying to say 22 more than that. 23 10731 We certainly aren't trying to compete 24 with broadcasters in those markets. We are trying to 25 identify areas in the community that, frankly, aren't StenoTran 2295 1 being served and try to identify how we would do that 2 and also try to use new technologies. 3 10732 I think part of the "Now TV" 4 experiment is in fact trying to use new technologies 5 and servers to see how we can provide that kind of 6 information. I think we spent up to about half a 7 million dollars developing a software with an Ottawa 8 company which we think is quite innovative in terms of 9 developing that kind of information capability. 10 10733 We think it's a balancing act in 11 terms of how we each fulfil our roles in the community, 12 whether it's as local broadcasters, as radio stations 13 or as a community channel. We don't really look at it 14 as a competitive situation. 15 10734 THE CHAIRPERSON: Now, you also have 16 some recommendations with regard to investments by 17 broadcasters, television broadcasters, which would 18 include specialty services obviously, towards the 19 production of Canadian programming. 20 10735 You state in your Executive Summary 21 age page ii: 22 "The current levels of licence 23 fees paid by broadcasters should 24 not be increased." 25 0925 StenoTran 2296 1 10736 Later on at page 10, I believe your 2 statement is that they should be more in line -- under 3 "Funding" at page 10, (i), the last sentence says more 4 production could be triggered: 5 "...if the licence fee 6 thresholds were more in line 7 with the true rental value of 8 the programs in the Canadian 9 marketplace." 10 10737 Seeing that you don't think that the 11 levels are too low, which is something we have heard 12 from many producers, of course, and some indication, 13 according to some information brought to us that they 14 have, indeed, been lowered, what do you mean by more in 15 line? Do you find that they now have the true rental 16 value or it should be decreased or -- obviously, you 17 say not increased. What is this reference point, the 18 rental value of the programs to determine the level of 19 the licence fee? 20 10738 MR. CASSADAY: In the case of 21 children's programming, the average licence fee is in 22 the area of 15 per cent, which is somewhat lower than 23 what we typically find in the area of Canadian drama, 24 which is in the range of 20 per cent. Over the last 25 number of years, we have maintained that level of StenoTran 2297 1 funding for licence fees. 2 10739 What we are referring to here when we 3 talk about the possibility of triggering more 4 production by allowing lower licence fees is 5 particularly in the area of animation and, more 6 specifically, in the area of computer-generated 7 animation. I think you will also find, particularly 8 from significant producers in the children's area, 9 specifically NELVANA and CINAR, that they agree with 10 the assessment that somewhat lower licence fees for 11 these genres, in particular, could contribute to the 12 stimulation of even more programming by ensuring that 13 there were more dollars available to go around. 14 10740 THE CHAIRPERSON: So, by the rental 15 value you mean what is it likely to garner at the end 16 of the day and, therefore, put your licence fee at the 17 level that is congruent with this eventual value 18 measured by...? 19 10741 MR. CASSADAY: A rental fee is really 20 code for a licence fee because it's not an investment 21 in the -- 22 10742 THE CHAIRPERSON: Oh, you are not 23 talking here about the eventual value in what you will 24 get back from the program? 25 10743 MR. CASSADAY: No, we are not. We StenoTran 2298 1 are just saying that if we could take the available 2 licence fee dollars and allocate them across more 3 programs, more programming could be triggered in the 4 children's area providing more programming to be made 5 available for sale in international markets and second 6 and third windows in Canada. 7 10744 THE CHAIRPERSON: So, the true rental 8 value to you means the same thing as a licence fee? 9 10745 MR. CASSADAY: Correct. 10 10746 THE CHAIRPERSON: And you have no 11 reference point as to -- you are just saying, "We want 12 more children's programming, so let's keep the licence 13 fee low and generate more programming." 14 10747 MR. CASSADAY: I think there is good 15 congruence, good consensus amongst the industry players 16 in the area of children's programming that the 15 per 17 cent licence fee, in the generality, is an appropriate 18 level for children's programming. 19 10748 THE CHAIRPERSON: And you say it's an 20 appropriate licence fee and also it's an appropriate 21 rental value? 22 10749 MR. CASSADAY: That's correct. 23 10750 THE CHAIRPERSON: That's all that 24 sentence means? 25 10751 MR. CASSADAY: That's correct. StenoTran 2299 1 10752 THE CHAIRPERSON: There has been a 2 lot of discussion, of course, about whether 3 broadcasters directly or through affiliates should have 4 full access to funds, especially the portion to which 5 they don't, and that, indeed, equity investments by 6 broadcasters should be encouraged. You do not share 7 the view of many participants from the production 8 industry that that is not wise because of self-dealing 9 possibilities and harm done to the production industry, 10 et cetera. Is it your view that it should be done 11 because there are no problems and it should be done 12 without safeguards or limits? 13 10753 You are obviously aware of the 14 various limits that have been suggested to ensure that 15 there is no more equity investments than there should 16 be to prevent the negative results of allowing 17 broadcasters access to the funds intended through an 18 equity investment. 19 10754 MR. CASSADAY: Yes, we believe that 20 broadcasters should have access or should have the 21 opportunity to participate in an equity basis in 22 programs. We see it as clearly, though, a two-step 23 process. The important first step is to establish a 24 fair and equitable licence fee for the program and, as 25 we have said in the case of children's programming, we StenoTran 2300 1 believe that the 15 per cent level is the appropriate 2 level. Then after that negotiation has been completed, 3 the opportunity for equity participation should be 4 available for the broadcaster and again we find that 5 there is good consensus in our production community on 6 this particular point. 7 10755 There are a couple of advantages that 8 the Commission might consider in this regard. First of 9 all, the opportunity for us to participate in equity -- 10 an equity participation in the project can often mean 11 the difference between that project actually being able 12 to move to completion. So, for example, we took an 13 equity position in the program "Reboot" last year as a 14 way of facilitating the continuation of the property. 15 In the absence of our equity participation, it's quite 16 likely that show could not have continued. 17 10756 So, the first point that we would 18 like to make is that equity often can mean the 19 difference between providing that final chunk of 20 financing required to move a project ahead or having 21 that project actually not be able to proceed with its 22 second or third year. 23 10757 The other point that the Commission 24 should consider in regard to equity is that as distinct 25 from the licence fee or the rental arrangement of a StenoTran 2301 1 program, the broadcaster takes their runs and they are 2 finished with the program. When the broadcaster has 3 equity participation, the incentive for them is to 4 ensure that that program gets well placed, well 5 scheduled and maximizes its chance for success is 6 enhanced. So, I think those are two compelling reasons 7 and perhaps my colleague have additional points to 8 make, but certainly those are two compelling reasons 9 that we believe equity should be continued to be 10 encouraged. 11 10758 THE CHAIRPERSON: Is that what is 12 intended by "collaborative ventures" again at page 10 13 under "Funding", under the second paragraph, "Equity 14 Investments", where you say: 15 "Collaborative ventures with 16 broadcasters by means of equity 17 should be another key 18 element..." 19 10759 Is that what you mean by 20 "collaborative ventures", where there may be shared 21 property in the product at the end? 22 10760 MR. CASSADAY: We mean collaborative 23 in the broadest sense of the word. We believe that 24 there are tremendous opportunities for us to work 25 together as industry partners to encourage the creation StenoTran 2302 1 of more first-run programming. As you know, in many 2 instances, broadcasters have specific conditions of 3 licence that require them to run specific amounts of 4 first-run programming. The opportunity for us to 5 collaborate and both credit first-run programming to 6 our schedules again represents another opportunity to 7 create more streams of programming. 8 10761 The most, I guess, prominent point of 9 reference here is the collaboration of Global and CBC 10 in the production of "Traders", which facilitated a 11 second and, ultimately, a third year of production for 12 that program, which ordinarily might not have been 13 allowed. We see tremendous opportunities in our 14 business to work with educational broadcasters, to work 15 with the CBC, to work with private broadcasters, to 16 work with French broadcasters to ensure that we 17 maximize the amount of new first-run Canadian 18 programming. 19 10762 THE CHAIRPERSON: Mr. Cassaday, I 20 think you said that there was a consensus among 21 producers about the value of having broadcasters. 22 Where there is not a consensus, as far as I could see, 23 is just how open-ended this should be. There have been 24 various questions raised as to the level of ownership 25 that should exist when in the hands of a broadcaster StenoTran 2303 1 over its affiliate. There have been some more complex 2 ones. We have asked many people, many parties to 3 comment on CINAR's. There have been suggestions that 4 in no case should there be more than 20 per cent 5 ownership of the product at the end of the day. 6 10763 I know the broadcasters make the 7 point that if there was no such limitation, with their 8 acumen and knowledge they could take the product 9 further and that would be a positive step, but I am 10 surprised by your comment about consensus. If you do 11 not feel that there ought to be any type of safeguards, 12 the ability to access the funds that are not open now 13 to broadcasters should not be on certain terms and 14 conditions. Would you agree that there is no consensus 15 there? 16 10764 Unless you have a set of safeguards 17 yourself that matches or are similar to the ones that 18 have been suggested, I don't see consensus as to the 19 terms. Of course, the production industry wants the 20 money in, but they want the product, and so do you. 21 Then the question becomes, "What is right for the 22 system", and there are various views. Consensus I have 23 not heard. 24 0935 25 10765 MR. CASSADAY: When Paul and Peter StenoTran 2304 1 Moss and Sheldon begin a negotiation with the producer, 2 there are many elements and many layers. The first, of 3 course, is the discussion about the licence fee. And 4 most importantly, even before the discussion of the 5 licence fee: Is this program appropriate for our 6 service? Is it something that will add value and bring 7 pleasure to our viewing audience? 8 10766 Once that is reached, then there 9 becomes another series of negotiations; equity being 10 one, distribution being another, merchandising being 11 another. There are many areas where the broadcaster 12 and producer can cooperate. 13 10767 What we have found, from a 14 situational point of view, is that any and all of those 15 areas can in fact be offered by the producer. 16 10768 So our feeling is that the Commission 17 may view, based on this lengthy discussion with the 18 community, that certain limitations are required. Our 19 tendency would be to say that equity is a form of 20 negotiation between the broadcaster and the producer; 21 and in fact it may be extremely advantageous to the 22 producer to have access to a significant chunk of 23 equity from the broadcaster to ensue that a program 24 goes through. 25 10769 After all, we may not be able to rely StenoTran 2305 1 on the buckets of public funding that are available 2 over the length that your decisions may hold. There 3 may need to be other sources of revenue to ensure these 4 productions are actually completed. 5 10770 THE CHAIRPERSON: If we look at the 6 world as it exists now, there are limitations. What I 7 want to know is whether you are advocating that there 8 be none, and that that is what the Commission could 9 recommend. 10 10771 Right now, despite negotiations, my 11 understanding is that there are parts of the funds that 12 are not available if access to them is by a 13 broadcaster. 14 10772 Am I not understanding this properly? 15 10773 MR. ROBERTSON: Just to say that we 16 are not seeking any additional access to the funds 17 beyond what currently exists. 18 10774 THE CHAIRPERSON: You are not looking 19 at a relaxation of the rules. 20 10775 MR. ROBERTSON: No. 21 10776 THE CHAIRPERSON: You are simply 22 recommending that the system should make it easier and 23 that collaborative efforts between broadcasters and 24 producers, including equity investment, should not be 25 discouraged. StenoTran 2306 1 10777 MR. ROBERTSON: We would support the 2 existing framework which provides 30 percent of the LFP 3 as an opportunity. But we think that the conversation 4 about equity is separate from the licence fee and 5 should therefore be a matter of open negotiation. 6 10778 We also would not present specific 7 safeguards on equity, because we believe that it can 8 exist in an open market conversation without any 9 issues. 10 10779 THE CHAIRPERSON: But is there a 11 limitation on the equity part of it right now for 12 direct involvement by broadcasters? 13 10780 MR. CASSADAY: There is. We are 14 precluded from accessing Telefilm funds. 15 10781 THE CHAIRPERSON: And you are not 16 proposing a change there. 17 10782 MR. CASSADAY: No, we are not. 18 10783 THE CHAIRPERSON: The rest would be 19 negotiated with Madame Charest, or whoever. 20 10784 MR. CASSADAY: That is correct. 21 10785 THE CHAIRPERSON: Where, of course, 22 the words garde-barrière and gatekeeper crop in; that 23 the conventional broadcaster is giving the first chunk 24 of licence fee. The negotiation is not quite on an 25 even keel. StenoTran 2307 1 10786 We have a Vice-Chair who hates the 2 phrase "level playing field", so it has been banned 3 from our vocabulary; that and "eyeballs". No more. 4 10787 But these are problems that are 5 inherent in the system as it exists. 6 10788 MR. CASSADAY: That is correct. 7 10789 THE CHAIRPERSON: The producer saying 8 that the collaborative effort is actually the 9 broadcaster deciding, because he has the first chunk, 10 the level of the fee. 11 10790 You say that in children's 12 programming it could possibly be advantageous if the 13 fee were lower. So there would be more product. 14 10791 Do you have any comment, Mr. 15 Cassaday, about the level of the fees for other types 16 of programs? 17 10792 MR. CASSADAY: Excuse me, Madam 18 Chair, but "other types of programs" meaning...? 19 10793 THE CHAIRPERSON: Other than 20 children's programming. 21 10794 When we were discussing the adequacy 22 of the level of the licence fee -- which is a subject 23 of contention during this process -- you spoke to 24 children's programming, which I know is Shaw's greatest 25 interest. StenoTran 2308 1 10795 What are your comments, if any, about 2 whether the level of licence fees for other than 3 children's programming is adequate, or should be 4 lowered? 5 10796 MR. CASSADAY: Fundamentally, we 6 believe that the goal for Canadian broadcasters and the 7 Canadian production community in general should be to 8 maximize the amount of programming that we can produce. 9 10797 If in concert with other funds, 10 foreign investment, equity participation, we can 11 trigger more programming and increase the chances of us 12 being successful in producing great Canadian 13 programming, we would encourage a flexible regulatory 14 environment which allows the broadcaster and the 15 producer to negotiate in good faith to come to some 16 terms. 17 10798 It may be necessary that there is a 18 floor established. But we are not sure that 19 maintaining a guaranteed 20 percent licence fee is 20 necessarily appropriate. 21 10799 There have been many parties who have 22 come to this hearing so far that have discussed 23 specific examples where good programs have been 24 produced amicably with a broadcaster and producer 25 involved at licence fees below 20 percent; oftentimes StenoTran 2309 1 taking advantage of the public funding that is 2 available for top ups. 3 10800 It seems to me that those have been 4 win-win situations. 5 10801 What we believe we need to be 6 focusing on is how do we create an environment that, 7 regardless of the level of funding available from 8 public sources, regardless of economic conditions in a 9 given year, ensures that there is a regime that is 10 flexible enough to ensure that programs continue to get 11 made. 12 10802 THE CHAIRPERSON: Talking about the 13 financial aspect as it relates to licence holders, what 14 portion of licence fees or top up -- how should that be 15 handled, in your view, vis-à-vis television licence 16 fees if spending requirements were imposed or continued 17 in some cases, depending on the option of the 18 television licensee? 19 10803 You have heard other parties to date 20 comment on what should or should not be included to 21 discharge one's spending responsibilities or 22 requirement. 23 10804 MR. TEICHER: What we can say is that 24 while we have included the LFP top-up -- and I think 25 our most recent filing, that amount has been not StenoTran 2310 1 required in order to meet our conditions of licence. 2 10805 If the decision was made that the 3 top-up could not be included, it would not impact YTV 4 negatively, because we have not relied on it in any way 5 to exceed our condition of licence requirements. 6 10806 THE CHAIRPERSON: Do you have any 7 views this morning as to whether whatever loopholes may 8 be examined as to the future use of the top-up, whether 9 or not that should remain as is or should not? 10 10807 Presumably, if there is such an 11 ability, it would not have shown up yet. Should it 12 show up in licensees' returns? 13 10808 MR. CASSADAY: We don't really view 14 it as being a loophole. The policy does allow -- 15 10809 THE CHAIRPERSON: Not a loophole, but 16 the ability to do it. 17 10810 MR. CASSADAY: The central question 18 has to be: What is the overall objective? Is the 19 overall objective to ensure that we produce as many top 20 quality Canadian programs as we can? 21 10811 If that is the objective, then the 22 fact that we are able to access different buckets of 23 funding, broadcaster licence fees, top-up fees, equity 24 from Telefilm, I think this is one of the privileges 25 that we have within the system. The ability to use StenoTran 2311 1 those in a creative fashion to get shows made has 2 proven to be a boon for the industry. 3 10812 One of the things that tends to 4 happen in a forum like this is that views get 5 polarized. But one of the things that I think we have 6 to remember is that we are doing a wonderful job as an 7 industry. We have talked about YTV's contribution in 8 the area of children's programming, where 37 percent of 9 our audience is watching Canadian programming; 70 10 percent of our programming in prime time is Canadian. 11 These are things to celebrate. 12 10813 CMT is delivering Canadian content at 13 the 45 percent level, well beyond the prescribed levels 14 for radio. 15 0945 16 10814 We are introducing Canadians to new 17 Canadian artists on a regular basis. In the case of 18 drama, the private broadcasters are making a 19 significant contribution. You know, thinking back just 20 in my ten years in the industry, the quality of 21 programming that we have on the air relative to what we 22 had ten years ago is demonstrably better. 23 10815 We are doing great stuff. We know 24 that the development slates for the future are even 25 more promising. We think we are on the right track, StenoTran 2312 1 that the funds that are available are contributing to 2 the system as a whole, making good progress. That's 3 where I think our emphasis should be. 4 10816 THE CHAIRPERSON: My question was a 5 lot more pointed than that. It was if the top-up or 6 whatever else is available as expenses, the Commission 7 could set spending requirements at 15 per cent. If 8 it's not, it would set them maybe at 12 per cent of 9 revenues, which I am sure will make the newspaper now. 10 10817 My question was simply, you know, 11 it's not that difficult. If it's counted in, then 12 maybe requirements are made, we will just take it into 13 account. 14 10818 MR. CASSADAY: Yes. 15 10819 THE CHAIRPERSON: So those who are, 16 as you say, creative and clever at using it then will 17 have a more imaginative way of reaching what their 18 requirements are. 19 10820 MR. CASSADAY: Yes. I think we 20 should -- 21 10821 THE CHAIRPERSON: I just wanted to 22 see what you thought. Should we just leave it 23 available? 24 10822 MR. CASSADAY: Well, to your specific 25 point of the question, yes, we believe you should keep StenoTran 2313 1 it available and we should encourage creativity in the 2 development of outstanding Canadian programs. 3 10823 THE CHAIRPERSON: And then if 4 spending requirements are made, those who make use of 5 it can count it in full towards -- 6 10824 MR. CASSADAY: Yes, and on a case by 7 case basis, as each broadcaster appears before you to 8 apply for their licence renewal, you have an 9 opportunity to question them about their specific plans 10 and their specific level of commitment. You can judge 11 their contribution and commitment accordingly. 12 10825 THE CHAIRPERSON: So in that sense I 13 agree with you that the word "loophole" is possibly not 14 the right word. It's just to understand what is 15 possible out there, who will use it, should you 16 encourage use and then should it be counted towards 17 meeting requirements that may be imposed. 18 10826 MR. TEICHER: One of the things we 19 might consider though is if you use it in that way 20 because LFP financing can't be counted on -- we sort of 21 saw in the last round that nobody everybody applied got 22 what they applied for because of the limitation of 23 funds. 24 10827 If you kind of gross up the 25 expenditure requirements on the theory that there will StenoTran 2314 1 be a certain amount of LFP contribution, not every 2 project for every broadcaster will in fact get the LFP 3 financing. 4 10828 One of the things you might consider 5 if you are trying to decide to keep it clear from 6 condition of licence or to include it is by keeping it 7 clear, then the result of who will be successful in 8 seeking their LFP, you don't have to worry about that 9 in terms of trying to gross up in advance. 10 10829 THE CHAIRPERSON: I understood 11 hearing the Directors Guild yesterday that some formula 12 would have to be, if that is taken into consideration, 13 as to when it becomes accountable. I'm sure our clever 14 economists would find ways of doing it just right. 15 10830 While we are at spending, you state, 16 as have many parties, that promotional efforts should 17 be encouraged and that as many techniques as possible 18 should be used for that purpose. 19 10831 I'm looking at the middle paragraph 20 on the Executive Summary at page ii, towards the end of 21 that paragraph. You say: 22 "-- the CRTC should encourage 23 all industry players to exploit 24 more fully the existing 25 promotional avenues for Canadian StenoTran 2315 1 programming and to develop new 2 techniques." 3 10832 I would like to hear you on new 4 techniques and also perhaps your comment on some of the 5 suggestions that have been made, if you are aware of 6 them, as to whether the Commission should again treat 7 that as an eligible expense towards meeting any 8 spending requirements that may be imposed. 9 10833 Both what are the new techniques, 10 have you thought of some, and secondly, how it should 11 be considered. 12 10834 MR. CASSADAY: Well, we will ask Paul 13 Robertson to talk about some of the new techniques 14 because there's a lot of interesting things being done 15 at YTV and perhaps if Vicki has any examples, she could 16 also talk about them. 17 10835 In the area of inclusion of promotion 18 expenses in terms of the overall Cancon requirement 19 again, go back to the fundamental premise here which is 20 the objective of the game to develop outstanding 21 Canadian programming and ensure that Canadians are 22 aware of it. 23 10836 One of the big limitations that we 24 have in Canada that again has been discussed at length 25 in this hearing is we don't have access to the same StenoTran 2316 1 star system promotion machine that they do in the 2 United States. We don't have the equivalent of 3 "People" magazine. We don't have the nightly exposure 4 of "Entertainment Tonight", those kinds of vehicles 5 which make these personalities and stars well known to 6 all of our viewers. 7 10837 That leaves us as a broadcast 8 community to play and fulfil that role in any ways that 9 we can to start reinforcing in the minds of our viewers 10 that's coming up next, who's in it, you know, story 11 lines that need to be told and retold to ensure there's 12 continued interest, to our way of thinking anyway, is 13 an important and vital contribution to the development 14 of the audience interest in these shows and the success 15 of the shows. 16 10838 THE CHAIRPERSON: I agree with you, 17 Mr. Cassaday, that it's valuable. What I'm asking you 18 is what are the mechanisms that the Commission has to 19 encourage, because I see encourage as a positive step. 20 Usually that translates itself into certain incentives. 21 10839 MR. CASSADAY: Yes. 22 10840 THE CHAIRPERSON: If I sit here and 23 encourage you to do that, am I really doing very much, 24 but as a regulator, various suggestions have been made 25 as to what incentives should be put in place, StenoTran 2317 1 particularly by the CAB, as to whether this type of 2 programming should be considered towards exhibition of 3 Canadian programming, whether certain types of 4 promotion that are now included in advertising should 5 be excluded from it by redefining advertising. 6 10841 MR. CASSADAY: Yes. 7 10842 THE CHAIRPERSON: When I see "the 8 Commission should encourage", at the end of the day 9 yes, we can say we think this is a good idea, but 10 usually it translates itself into an incentive which is 11 either monetary or allows you to count certain 12 programming as Canadian, something that doesn't exist 13 now which will incent promotion. 14 10843 MR. CASSADAY: I understand the 15 question. We believe that the promotion of Canadian 16 content should be included as an eligible expense. 17 10844 THE CHAIRPERSON: Have you seen the 18 CAB's proposal on that score and is that the type of 19 thing which I think certain entertainment programming 20 should be considered? If you don't have the exact -- 21 that type of thing is acceptable to you. 22 10845 MR. ROBERTSON: We give you the basic 23 idea that it would be third party expenses and would 24 relate to the promotion of Canadian programs in 25 particular. StenoTran 2318 1 10846 THE CHAIRPERSON: And you would stop 2 short at the entertainment type programming. It would 3 be particularly treated differently. 4 10847 MR. ROBERTSON: Well, the large 5 majority of what we do in children's programming is all 6 entertainment programming so we would support that, 7 yes. 8 10848 THE CHAIRPERSON: The reason I'm 9 asking is the production industry in general has had a 10 different view which is they are selling these 11 products, it's inherent in the system or integral to 12 the system that they promote and you don't have to 13 incent it or give them bonuses, whether they be 14 exhibition reduction or advertising beyond the 15 advertising limitations. 16 10849 MR. CASSADAY: Madam Chair, it's not 17 integral to the system. The fact of the matter is that 18 in a world where making money is becoming increasingly 19 difficult -- 20 10850 THE CHAIRPERSON: Yes. I saw the 21 stock market this morning. 22 10851 MR. CASSADAY: Exactly. 23 10852 THE CHAIRPERSON: That's why we all 24 wore black today. 25 10853 MR. CASSADAY: And we need to StenoTran 2319 1 remember that that can get worse. 2 10854 THE CHAIRPERSON: We are all going to 3 become nuns now. That's probably a good spot to be 4 rich now because there aren't too many left. 5 10855 MR. CASSADAY: Right. If we leave 6 promotion as a purely discretionary worthwhile 7 objective and don't create the proper incentives to 8 encourage it -- we are asking for a broadcaster to make 9 a decision or a producer to make a decision about the 10 expense of a discretionary item. 11 10856 We believe that there is a high 12 likelihood that it simply would not happen. By in fact 13 encouraging it, by including it as an allowable 14 expense, you maximize the potential that we are going 15 to see, you know, more ads in "TV Times" and more 16 outdoor signs and more actual on-air promotion of 17 Canadian content. 18 10857 THE CHAIRPERSON: Especially if you 19 increase your equity involvement. 20 10858 MR. CASSADAY: Possibly. 21 10859 THE CHAIRPERSON: That is, I suspect, 22 some of the basis of the arguments of the broadcasters, 23 let us in in a fuller way and we will promote it here 24 and everywhere else and it will all be better for the 25 production of Canadian programming. StenoTran 2320 1 0955 2 10860 MR. CASSADAY: Whatever can be done 3 to enhance the mutuality of interest is good for the 4 system. 5 10861 MR. TEICHER: Although it's probably 6 worth pointing out that the equity returns are most 7 likely to come from foreign markets and distribution of 8 programs outside the market because, generally 9 speaking, the first-run Canadian licence fee has been 10 paid in and the majority of value that the broadcaster 11 gets back is for promoting the show on its own network. 12 For viewers, equity doesn't really play a role, except 13 basically in international sales. So, it's not self- 14 serving in that sense. 15 10862 THE CHAIRPERSON: But the 16 broadcasters I think we hear telling us we should be 17 more involved in the production industry because we 18 would do a better job even at international sales 19 because of our contacts, our knowledge. Some 20 broadcasters are saying that. You don't believe it? 21 10863 MR. CASSADAY: Some broadcasters are 22 saying that, but that's not our point. We don't 23 believe we can do a better job, we believe that 24 sometimes equity investments and the promotion of the 25 program can enhance the overall value of the property StenoTran 2321 1 for everybody. 2 10864 You asked earlier about the whole 3 issue of specific ideas that could enhance promotion. 4 Perhaps Mr. Robertson could just make a quick comment 5 on that. 6 10865 THE CHAIRPERSON: Please. 7 10866 MR. ROBERTSON: There is really three 8 areas I will comment on briefly that are intriguing 9 marketing ways of driving audience to Canadian programs 10 that we have been able to develop at YTV. The first is 11 the website. We have a very elaborate website and we 12 have put a lot of resources into it. It changes nearly 13 daily in terms of scheduling information. Because it's 14 constantly changing and innovative, we get about three 15 million hits a week from young kids that are 16 communicating with us. So, it's a very powerful way 17 for them to first find out about Canadian shows, 18 because they would be previewed on the website two 19 weeks before they would hit the air. 20 10867 Secondarily, we have really developed 21 our community involvement. Perhaps national specialty 22 channels have not seen their role that powerfully in 23 the local community, but now as the services mature 24 there is a tremendous opportunity for national services 25 to get more involved in the community. We created the StenoTran 2322 1 YTV bust out tour, we call it. We take this large 2 truck and set up a tent and meet the kids on their own 3 turf, get into conversations with them, find out what 4 they think of the Canadian shows, and it's a tremendous 5 way for us to inter-react with the kids that we serve. 6 10868 Yes? 7 10869 THE CHAIRPERSON: No, go ahead. 8 10870 MR. ROBERTSON: Just one more area I 9 will mention is something that we have just now put 10 into place, which is a made-in-Canada screen credit. 11 What we do here is place a Canadian flag when a 12 Canadian show is beginning because we want to 13 communicate to the young kids that: The show you are 14 about to see is a terrific Canadian production. 15 10871 Now, we know that the children don't 16 have a bias between Canadian/American, they just decide 17 whether they like it or don't like it, but in this case 18 if we can say that, indeed, this program is made in 19 Canada, we hope that we will start to form positive 20 attitudes about Canadian programs that will perhaps 21 endure for life. 22 10872 THE CHAIRPERSON: Would you agree 23 that it's possibly easier to do some of these 24 techniques with children's programming than with drama 25 or where what you see on the screen eventually becomes StenoTran 2323 1 a more important promotional technique? 2 10873 Isn't you who say in your submission 3 that there is only 13 per cent of Canadian homes 4 connected to the Internet? So, it would not reach a 5 large proportion of the audience that the services are 6 really trying to reach, although it's extremely 7 valuable. 8 10874 MR. ROBERTSON: Thirteen and growing, 9 of course. The 13 per cent was a number in our 10 submission, but also there is good access now through 11 schools so that the children do have the opportunity at 12 school to get access, but clearly it doesn't have the 13 penetration that you would want. So, it's one 14 technique. 15 10875 THE CHAIRPERSON: Or even visits. 16 It's easier to target children when they are mostly all 17 in the same spot. With, let's say, adult programming 18 as opposed to children's programming, it's more 19 difficult. So, the on-screen, on-the-air techniques 20 become -- as well as third party ones, become more 21 important and the other techniques are a little more 22 difficult. You know we have been visited by Dudley the 23 Dragon. 24 10876 MR. ROBERTSON: He is very good, 25 isn't he? StenoTran 2324 1 10877 THE CHAIRPERSON: In children's 2 programming, you mention the possible need for a 3 particular -- at the top of page 10: 4 "Ensure that significant funding 5 envelopes are available 6 exclusively for children's 7 television genre." 8 10878 Are you suggesting that the 9 Production Fund's allocation should be altered and a 10 particular children's programming envelope be created? 11 I don't think there is now, is there? 12 10879 MR. CASSADAY: No, there is not. 13 10880 THE CHAIRPERSON: It would be inside 14 of the proportion allocated to probably drama. 15 10881 MR. CASSADAY: That's right. It's 16 basically within both portions. Because we are able to 17 draw from the 80 per cent that is directed towards 18 drama and from the 20 per cent that is directed towards 19 under-represented, we are able to participate in both 20 pieces of the private funding envelope. 21 10882 Madam Chair, we are not recommending 22 a specific envelope be created for children's 23 programming. We are simply recommending that in your 24 report you remind the various constituents about the 25 importance of children's programming, the fact that we StenoTran 2325 1 are exposing young people to Canadian programming and 2 they are voting "yes" and that we don't jeopardize the 3 success that we are enjoying in this category by taking 4 that success for granted. 5 10883 THE CHAIRPERSON: In the same 6 recommendation at the bottom of page 9, the top of page 7 10 of your written submission, you say that the 8 Commission should: 9 "Maintain recognition of 10 children's programming as an 11 under-represented program 12 category..." 13 10884 Should the Commission retain any of 14 the recommendations that exhibit hours be imposed? We 15 have heard many formulae, 10/10/10, 7/7/13, 7/7/11. 16 Maybe I should add 20/20 at this point. We had to make 17 sure that Dudley the Dragon didn't confuse that for a 18 garden spray that would be not environmentally friendly 19 because Dudley was around when we talked about 20 10/10/10. 21 10885 Are you suggesting there that if the 22 Commission wished to retain the idea of exhibition of 23 under-represented categories in particular hours, that 24 hours of children's programming should be included in 25 that? You know that the suggestion has been made that StenoTran 2326 1 it be three hours imposed by the FCC and so on. I'm 2 speaking here not of specialty services like you 3 program, but conventional television stations. Would 4 you consider that undue competition with your specialty 5 services, Mr. Cassaday, or would you think it's a good 6 idea to also demand some unconventional stations? 7 10886 MR. CASSADAY: We believe most 8 conventional broadcasters are committed to children's 9 programming and we look forward to working with them, 10 as we have in the past. We have a strong franchise 11 with kids, so we are happy to have all the competition 12 come at us that wants to. 13 10887 So, probably the best way of framing 14 our advice to the Commission on this one is that the 15 fundamental question should be: What is the level of 16 funding available in the system to ensure that we 17 promote the development of high-quality children's 18 programming? There are a number avenues out there 19 right now that are contributing to children's 20 programming, including the CBC, CTV and Global. 21 10888 Should every player in the system be 22 required to do three hours? Again we would argue that 23 on the basis of each player coming before you with 24 their licence application, you should review their 25 commitment to children's programming in the context of StenoTran 2327 1 their overall positioning. We may see even 2 conventional broadcasters become much more focused in 3 their approach in the future than they are now and 4 maybe children's programming works for them and maybe 5 it doesn't. 6 10889 THE CHAIRPERSON: In your oral 7 submission at page 6, you say: 8 "Over the past two years, 9 approximately 30% of the private 10 broadcaster envelope has been 11 directed to children's 12 programming." 13 10890 Do you find that adequate? Are you 14 saying that because you find it's adequate or it's too 15 low? 16 10891 MR. CASSADAY: We stated it simply as 17 a fact. 18 10892 THE CHAIRPERSON: As a fact, but 19 usually when people insist on numbers, it's either to 20 say this is good or it's not, it's not enough. Is this 21 adequate if I combine it with your comment at page 10, 22 that there should be encouragement for significant 23 funding? Do you find this? If you don't want to 24 comment, that's fine, too. I was curious as to -- 25 10893 MR. CASSADAY: Our simple comment StenoTran 2328 1 would be that we believe that that should be 2 safeguarded, that we have demonstrated that children's 3 programming is making a significant contribution to the 4 system right now. We are in fact creating an 5 environment where young Canadians are developing a 6 healthy appetite for Canadian programming and there 7 seems to be a real benefit in nurturing that. 8 10894 THE CHAIRPERSON: So, it's generally 9 adequate? 10 10895 MR. CASSADAY: Yes. 11 10896 THE CHAIRPERSON: And you wouldn't 12 want it to change, which, of course, would be unlikely 13 if the Commission retained the suggestion that every 14 over-the-air broadcaster do three hours of children's 15 programming at children's peak viewing time. One would 16 think that -- 17 10897 MR. CASSADAY: The demand would 18 increase. 19 10898 THE CHAIRPERSON: -- there would be 20 an increased demand. 21 10899 Before we leave the area of 22 programming, the first run -- if I understood or 23 remember the suggestion I think of the CFTPA, it was 24 that first run could be two runs on different 25 broadcasters' undertakings as long as they are StenoTran 2329 1 different licensees and it's first run for them. 2 Hopefully, I am not misrepresenting it. Is that the 3 type of thing you are looking at or something 4 different? You say the CRTC should loosen its 5 definition of "first run". What do you understand it 6 to be now and what do you think it ought to be? 7 10900 MR. CASSADAY: I will ask Mr. Moss to 8 make a couple of comments on how it can be specifically 9 applied. Peter has over 25 years' experience in 10 children's programming and we are very pleased to have 11 had him join us in the past year. He can talk about 12 some of the kinds of things that we would like to do. 13 10901 I think one of the fears in the past 14 has been that if we allow shared first runs, there is 15 going to be less programming produced and, importantly, 16 the window for second-run programs won't be there. We 17 believe that both of those beliefs are myths. 18 10902 In the case of less second run, 19 clearly, what will happen is that the two players that 20 are participating in the programming on a first run 21 basis will end their run and then another player will 22 come in. So, effectively, the third run will come in 23 and replace what would ordinarily have been the second 24 run. So, we see no loss of revenue for the producer by 25 opening the window. StenoTran 2330 1 10903 Secondly, we believe that by 2 encouraging players to share first run windows, we in 3 fact create an opportunity for more programs to get 4 made and better programs to get made. The final point 5 that we believe needs to be made here is even a 6 successful show that gets an audience of a million 7 people. The other way of looking at is 29 million 8 Canadians didn't see it. So, the more windows that we 9 have for these top quality Canadian programs, whether 10 they are children or family or adult-oriented fare, the 11 more windows for exposure that we have, the better off 12 we all are. 13 10904 Perhaps, Peter, you could comment on 14 just a couple of specific examples. 15 10905 MR. MOSS: The idea of sharing first 16 windows is something that we currently do on an 17 acquisition basis and library basis. For example, a 18 program like "Animorphs" will show up on Global and on 19 YTV both in first run and we have found a way of just 20 dividing the broadcast day in such a way that we 21 encourage each other to find our own audiences and in 22 many ways having two broadcasters support a program 23 draws more audience to both those sides. 24 10906 So, in terms of sharing first 25 windows, really what we are looking to try and do is StenoTran 2331 1 establish something that's not unlike international co- 2 productions in which in a Canada/U.K. or a 3 Canada/France situation both countries can claim 100 4 per cent content. We would like to say we could do 5 domestic co-productions with a conventional over-the- 6 air broadcaster in specialty and both partners can 7 claim first-run status and that will allow the LFP to 8 spread their money over a wider net and encourage more 9 first-run programming on air. 10 10907 THE CHAIRPERSON: And your concern 11 here vis-à-vis the CRTC's role is that if there are 12 limitations that are waved around the idea of first 13 run, the benefit should be to more than one party? 14 10908 MR. MOSS: Yes. 15 10909 THE CHAIRPERSON: That is the role 16 you see. 17 10910 MR. TEICHER: It's also extremely 18 important to consider, given the amount of production, 19 for example, the CFTPA is advocating and given the 20 limited amount of public funding combined with how 21 important gap financing or that kind of public money is 22 to production specifically in regards to children's 23 programming, you may set up a scenario where if you 24 mandate a certain amount of production and you require 25 it be first run but you don't loosen the opportunity StenoTran 2332 1 for broadcasters to both claim and share windows, there 2 won't be enough money in the system to make the amount 3 of programming that's required. 4 10911 So, what we are suggesting is perhaps 5 there is a way where both broadcasters, a convention 6 and a specialty, can contribute and spread the money a 7 little bit farther and get more original production 8 made. 9 10912 THE CHAIRPERSON: Now concentration 10 of ownership, and I am talking here about what I have 11 termed horizontal concentration when we speak of 12 conventional broadcasters also having specialty 13 licences or one party having many licences. So, 14 horizontal in the fashion that it's inside the 15 broadcasting programming sector. 16 10913 At page 2 of the Executive Summary 17 you mention in about the middle of the last paragraph 18 -- you have a sentence that says: 19 "Private television has 20 benefited from ownership 21 consolidation, with resulting 22 cost efficiencies and revenue 23 synergies, and from ownership of 24 specialty services." 25 10914 Yet on the next page, you say that: StenoTran 2333 1 "...specialty services' Canadian 2 content quotas and 3 expenditures --" 4 10915 At the top of the page: 5 "-- are higher than those of the 6 conventional sector." 7 10916 And there should not be increased 8 responsibilities imposed for Canadian programming from 9 that sector. 10 10917 I would like you to comment on the 11 extent to which the Commission should take into account 12 these cost efficiencies and these revenue synergies 13 which make it easier to operate when it is setting on 14 an ad hoc basis, as in the case of specialty services, 15 or possibly even in the case of conventional 16 broadcasters, whether the Commission should consider 17 that the synergies and cost efficiencies that result 18 from approving transfers or allowing multiple ownership 19 of specialty services or cross-ownership with 20 conventional broadcasters should be taken into account 21 as a reference point for the level of advantages in the 22 area of programming that should be expected. 23 10918 By that I mean more exhibition, more 24 spending, whether one should say this is a big company, 25 it's got the cost efficiencies, revenue synergies, so StenoTran 2334 1 more should be requested or demanded of it than a 2 similar neighbour who is not consolidated. 3 10919 MR. CASSADAY: Madam Chair, there is 4 a lot of layers to that question, so let me try to 5 answer it as briefly as I can. 6 10920 First of all, we believe that there 7 are still tremendous opportunities for the development 8 of new Canadian services and new specialty niches to be 9 attacked or addressed, but those opportunities, again 10 we believe, can only be met by players that have the 11 opportunity to sort of graft off from existing 12 operations, so the ability to be able to come into this 13 new world where you may have access to 500,000 or 14 600,000 homes as opposed to the eight million homes 15 that YTV has or the six million homes that CMT has. 16 10921 To be successful in this new world, 17 the rules are going to be no more bricks and mortar, no 18 more additional G&A, probably limited access to ad 19 revenue. So, all your funding is going to come from 20 probably one source of revenue, which is going to be a 21 subscriber fee, that the subscriber is going to pay for 22 it because they want that particular genre of 23 programming. The ability to put all the money on what 24 appears on the screen as opposed to in the back room is 25 going to define success. StenoTran 2335 1 10922 So, in our particular case, we have a 2 service CMT which does about $10 million in total 3 revenues. So, it is a small service. We have about 25 4 people that work in that operation, but they benefit 5 from sharing affiliation support with YTV, they benefit 6 from sharing research support from YTV. In the absence 7 of that, CMT couldn't make the contribution that it's 8 making to the system. 9 10923 So, we believe that the Commission is 10 going to have to keep in mind that specialty means 11 specialty. It means smaller, it means less access to 12 significant buckets of revenue, and it means that each 13 of them has to cut their cloth accordingly. So, again 14 we go back to our point that even though we are able to 15 achieve these efficiencies, it's only through these 16 efficiencies that we can continue to grow the Canadian 17 broadcasting system and deliver new, more defined 18 niches of programming in the future. 19 1015 20 10924 Again, we go back to our point that 21 even though we are able to achieve these efficiencies, 22 it is only through these efficiencies that we can 23 continue to grow the Canadian broadcasting system and 24 deliver new, more defined niches of programming in the 25 future. StenoTran 2336 1 10925 We again go back to the fact that if 2 you look at the contribution that is being made, in the 3 case of YTV, 70 percent of our prime time programming 4 is Canadian. If you look at CMT, 45 percent of our 5 music is Canadian. These levels far exceed what levels 6 we are achieving in the realm of conventional, whether 7 it be radio or conventional television. 8 10926 THE CHAIRPERSON: Let me try again. 9 10927 At page 16, at the top, you recommend 10 that the Commission: 11 "Make no adjustments to the 12 regulatory framework for pay and 13 specialty services in 14 recognition of their current 15 significant contributions to 16 Canadian programming..." 17 10928 But the last sentence is: 18 "The Commission should continue 19 to assess each service on a 20 case-by-case basis to ensure 21 that each service is making a 22 substantial and equitable 23 contribution." 24 10929 My question is with respect to the 25 extent to which equity as between various broadcasters StenoTran 2337 1 should take into consideration the increased ability 2 that may flow from synergies. 3 10930 MR. CASSADAY: To use an example, our 4 friend Mr. Morrissette is going to follow us. He has a 5 very successful service called The Weather Channel. 6 10931 Clearly, the contribution that 7 Pelmorex makes to the system is demonstrably different 8 than the contribution that Vicki at CMT makes, or the 9 people at CTV make, or the people at YTV or Treehouse 10 make. 11 10932 THE CHAIRPERSON: What if CTV owned 12 The Weather Channel. Should that be taken into 13 consideration when you are looking at what CTV should 14 do or what The Weather Channel should do? That is my 15 question. 16 10933 I am not suggesting that that would 17 be the case. But are these concentrations and 18 consolidations, which are usually brought to the 19 Commission by saying intangible and tangible benefits 20 will flow from it -- well, intangible, let's say. 21 Because we will have greater power, we will be able to 22 do more than should the Commission, in reaching the 23 goal of equity which you yourself have put there on a 24 case-by-case basis, consider that over and above 25 whatever benefits test may or may not have been applied StenoTran 2338 1 when transfers occur and of course when there are new 2 licences to be given. 3 10934 There has been a lot of talk inside 4 the conventional system as to whether multi-station 5 licensees should be required to do more because of 6 their power and how can we get equity. Should that 7 also be considered when you are looking at someone who 8 has more licences or is more concentrated? 9 10935 I am not questioning the 10 contribution. I am questioning what your view is as to 11 how it can be equitable. 12 10936 MR. CASSADAY: Our view is that the 13 broadcasting business is becoming increasingly global. 14 The competition is Time Warner, NewsCorp, Disney. We 15 need strong integrated -- whether it is horizontal or 16 vertical -- Canadian companies that can withstand this 17 global competition. 18 10937 The fact of the matter is that small 19 is nice but it is no longer beautiful. We need to 20 encourage strong players. 21 10938 The fact that a particular company is 22 able to assemble a group of assets that make them more 23 efficient makes them capable of making a contribution 24 to the system. And as they appear before you, capably 25 doing their job, you will be able to make judgments as StenoTran 2339 1 to what additional contribution they can make to the 2 system. 3 10939 You know, clearly in the area of 4 specialty and probably in the area of conventional, we 5 would argue that one size does not fit all. We are in 6 a business which is increasingly becoming one of 7 picking targets and selectively doing a job, and that 8 is going to require a very rifle-like approach to 9 regulation as opposed to a shotgun. 10 10940 THE CHAIRPERSON: That may not fit 11 within my comments, because it seems to show the 12 opposite. Pelmorex is coming up next. They may smile 13 at the suggestion that small, in terms of many 14 licences, is not beautiful. 15 10941 MR. CASSADAY: Every player will have 16 different strategies. Mr. Morrissette pursued an 17 aggressive international expansion plan. He took Door 18 B instead of Door A, and he may change strategies again 19 in the future. He has done a wonderful job running a 20 terrific service. And I am sure he would love to talk 21 to you about 10-10-10 as well and his drama commitment. 22 10942 THE CHAIRPERSON: My final question. 23 10943 At page 2 of your submission, you 24 have a list of what you consider to be Shaw's 25 contribution to Canadian programming. StenoTran 2340 1 10944 I know that it is muted because, to 2 the extent that you are successful as a cable operator, 3 more money flows to various parts of the system. But 4 the contribution to production funds, that is the 5 subscribers' contribution. Shaw's involvement is to 6 the extent that they have penetration; it is high or 7 low. But that is a levy on the subscriber. 8 10945 MR. SHAW: Yes, that is correct. 9 That is the 5 percent -- 10 10946 THE CHAIRPERSON: Yes, I understand 11 that. 12 10947 MR. SHAW: That number is not correct 13 in there. That was last year's number of $7 million; 14 that has more than doubled this year, to close to $12 15 million. 16 10948 THE CHAIRPERSON: The $51 million 17 that you pay to Canadian specialties, that is because 18 you are selling their services. 19 10949 MR. SHAW: That is correct. 20 10950 THE CHAIRPERSON: It is not a loss. 21 It is a business -- 22 10951 MR. SHAW: No. That is a flowthrough 23 on funding that goes back into the system. 24 10952 THE CHAIRPERSON: And the same thing 25 with the second line of $23 million. StenoTran 2341 1 10953 MR. SHAW: That is correct. And then 2 of course the -- 3 10954 THE CHAIRPERSON: I would divide that 4 column differently, for the reasons that are obvious. 5 10955 MR. SHAW: Okay. 6 10956 THE CHAIRPERSON: Fortunately for 7 you, I don't have a typewriter or computer here. 8 10957 Commissioner Cardozo has questions. 9 10958 COMMISSIONER CARDOZO: Thank you. I 10 have a couple of questions; the first one following on 11 from questions by the Chair on the matter of promotion. 12 10959 You talked about wanting your 13 promotion to be Canadian programming, and I wonder if 14 you can help me with this. It has come up a few times. 15 10960 One of the other sides to this, and 16 the argument that has been made, is that if you have 17 programming, it is in your best business sense to 18 promote it. You don't need regulation to encourage you 19 to do that; that that is something you ought to do. 20 10961 I am thinking beyond that. We talk 21 about things like "Entertainment Tonight". There is 22 nothing stopping somebody from having an "Entertainment 23 Tonight". We have sort of that happening with "Open 24 Mic", the Mike Bullet show on Comedy and CTV. We have 25 Pamela Wallin. StenoTran 2342 1 10962 We have had other shows like Ralph 2 Benmurgy. So there is a certain amount of that that 3 has happened, and more could happen. 4 10963 My question is: What is your 5 reasoning for asking us to encourage that when it is 6 something that makes business sense and something which 7 you would normally do yourself? 8 10964 MR. CASSADAY: I am going to ask 9 Vicki to comment on this in the context of CMT, because 10 there are some things -- 11 10965 For example, in CMT's licence we are 12 regulated to do certain things and yet not encouraged 13 to do other things that we believe are in the best 14 interests of the artists and the development of 15 Canadian content. 16 10966 Perhaps, Vicki, you could talk about 17 some of the limitations that you have to live with as 18 the regulations are currently conceived. 19 10967 MS DALZIEL: What we found early on 20 in our licence is that people are looking -- they do 21 watch a music video network obviously, but what it does 22 not do is it does not help to create the Canadian star 23 system that we have all talked about and that we are 24 all looking for. 25 10968 We discovered that the more profiling StenoTran 2343 1 we could do on the artists, by way of one-on-one 2 interviews, news programs, entertainment programs, the 3 more interest the viewers had in these entertainers. 4 10969 The challenge is that we have gone 5 ahead and done what is allowable for us to do under a 6 10 percent window, other than a video flow, these types 7 of programs. Could we do more Canadian programming in 8 this venue? Absolutely, if the formulas was there to 9 allow us to do that. 10 10970 The programming that we have also 11 done, these news and entertainment features, the 12 interview programs, the concert programs, do not 13 account for any Canadian content for our network. 14 10971 So although we do it because we know 15 our viewers need it and the entertainers need it in 16 order to create that strong Canadian star system, we 17 are not recognized for that programming from a Canadian 18 standpoint. 19 10972 COMMISSIONER CARDOZO: You would draw 20 a difference between an "Entertainment Tonight" program 21 versus 30-second commercial type -- 22 10973 MS DALZIEL: Exactly. Currently, we 23 are at 90 percent video flow. That will not create a 24 star system by just playing the music. We must do the 25 types of programs and promotion that we talked about. StenoTran 2344 1 10974 In order to do that from our 2 standpoint, it is expensive; it is timely. We have a 3 limited amount that we can do with that 10 percent 4 window. 5 10975 COMMISSIONER CARDOZO: If you had a 6 program that you wanted to be counted as Canadian 7 content, it would not exclusively deal with Canadian 8 artists then. 9 10976 MS DALZIEL: Most of the programming 10 that we have done has been exclusively Canadian, in the 11 sense of a lot of the concert programming. 12 10977 You are correct, in the news and 13 entertainment element we are forced to be much broader 14 obviously because the audience wants to know everything 15 that is going on. 16 10978 We are in a very narrowcast country 17 music area or arena, so we at least have to cover every 18 spectrum within that arena. 19 10979 MR. CASSADAY: Commissioner Cardozo, 20 to build on a point that Commissioner Wylie was talking 21 about, this whole area of integration: We really 22 believe at the core of our business -- in Jim's opening 23 comments he talked about wanting to do these two 24 business segments superbly -- that we need champions of 25 industry in Canada. We need outstanding significant StenoTran 2345 1 companies. 2 10980 When it comes to the area of 3 promotion, if you were to look at the P&L of a company, 4 you have fixed costs; you have your program costs, 5 which are fixed commitments; you have your conditions 6 of licence, which are fixed commitments. You have your 7 requirements to your shareholders, and then you have 8 discretionary costs, your variable costs. And 9 promotion is a variable cost. 10 10981 So yes, while your comment is true 11 that it is in the best interests of everyone to promote 12 their schedule, when you are forced to make tough 13 decisions about what survives and what dies, promotion 14 is often on that "die list". It is a discretionary 15 expense item. 16 10982 If you are tight, if you are worried 17 about pre-Christmas sales and about the impact that 18 that might have on advertising, or if you are worried 19 about cost inflation you have had in programming, what 20 gets cut are the discretionary items. 21 10983 If we create a system in Canada where 22 we encourage companies to grow, where we encourage 23 synergies to be created, where we encourage 24 efficiencies to be created, there is going to be more 25 money for promotion; there is going to be more money StenoTran 2346 1 for research; there is going to be more money for these 2 discretionary items that typically don't end up -- they 3 get planned, but they don't end up getting executed. 4 10984 So a very important point that we 5 would like to leave here today is that we believe for 6 all of this stuff to get done, for improved Canadian 7 and more of it, for improved promotion and more of it, 8 for better research so we can serve our viewers and our 9 advertisers, we need to create these larger companies. 10 That is the critical success factor. 11 10985 COMMISSIONER CARDOZO: Do you count 12 your website as part of your promotion strategy? Are 13 you doing a lot of promotion through your website? 14 10986 MR. ROBERTSON: Yes, we do. It is, 15 in part, programming, if you like, because we are 16 communicating with our viewers. But certainly it 17 promotes the programs, which is a very key element of 18 the plan. 19 10987 COMMISSIONER CARDOZO: The other 20 question deals with the question of diversity in 21 programming. 22 10988 Earlier this week we had 23 representation on issues of aboriginal representation 24 in television. We have also included in our Public 25 Notice the issue of ethnic and racial diversity in StenoTran 2347 1 programming. 2 10989 My sense of YTV and Treehouse is that 3 you do some fairly good stuff in terms of ethnic and 4 racial diversity; not much in terms of aboriginal 5 diversity. 6 10990 I would like your comments in terms 7 of how you go about it. Does it happen coincidentally? 8 Do you have to think about it? What suggestions do you 9 have for us? 10 10991 Also with regard to CMT, do you think 11 about the diversity of genres and the types of music 12 that you play within country music -- which you have 13 creatively interpreted not too narrowly? 14 10992 MR. MOSS: I would like to answer 15 that. 16 10993 First of all, thank you for noticing. 17 I think we are very proud of the fact that we do 18 provide a kind of ethnic and racial diversity on YTV. 19 10994 It is, I suppose you could say, soft 20 policy. We don't have quotas, but we are all cognizant 21 of the fact that we live in a multicultural and 22 multiracial country and that the experience of the 23 children that are watching YTV ought to be reflected on 24 the screen when they watch YTV, so that they don't feel 25 they are in a different world. We try to be as StenoTran 2348 1 inclusive as possible. 2 10995 In terms of our co-productions, again 3 we can suggest and always encourage and say: "We want 4 this cast to reflect the cultural diversity of the 5 country", without specifically saying that you have to 6 have one person of this colour, one person of that 7 colour and one person of that colour. 8 10996 That is a policy that we do undertake 9 with all of our co-production. 10 10997 In terms of aboriginal, that is much 11 harder. The only initiatives that we currently have 12 are discussions of a co-production with Inuit 13 Broadcasting to discuss a way of bringing Nunavut to 14 life for southern kids -- kids who don't live in the 15 Northwest Territories and will not be living in the new 16 country. 17 10998 COMMISSIONER CARDOZO: From the 18 funding mechanism, there has not been any discussion or 19 encouragement in terms of diversity, has there? 20 10999 MR. MOSS: No mention at all. 21 11000 MS DALZIEL: From the CMT standpoint, 22 we are a unique broadcaster in that sense. But the 23 playing field is completely wide open to any musician 24 from any genre who wants to apply and be part of our 25 broadcast. We encourage that, and we represent StenoTran 2349 1 virtually every corner of this country, including 2 northern Canada, east to west coast. 3 11001 It is wide open. There are no 4 boundaries. 5 11002 COMMISSIONER CARDOZO: Do you have a 6 sense of whether you do get -- sometimes if it is 7 nobody's responsibility, it is open to everybody. 8 There may be certain systemic things that don't get 9 reflected. 10 11003 I am thinking of -- whether it is 11 Cashton or Susan Aglukark, are they able to find their 12 way on to -- 13 11004 MS DALZIEL: You talk about the broad 14 boundaries that we have on our network. We like to 15 believe that by defining country, whether it is Celtic 16 music, whether it has a different flair than what 17 people would normally consider core country, it opens 18 up a possibility for people who might have a different 19 type of music slant. It opens up an opportunity for 20 them to be on our network. 21 11005 Whereas if we were a traditional 22 country network, I think there is less opportunity 23 there. 24 11006 We have roots music, core country 25 music, which does allow the Susan Aglukarks to have a StenoTran 2350 1 definite place on our network. We encourage more; and 2 any we could encourage more, we would. Our viewers 3 look to it. 4 11007 To date we have invested over $8.5 5 million in the production of video and the incentive of 6 artists. So we are behind it. 7 11008 We realize that our success is 8 completely dependent upon the star system and the 9 quality of these acts that can come to our network. 10 11009 COMMISSIONER CARDOZO: Thank you very 11 much. 12 11010 Thank you, Madam Chair. 13 11011 THE CHAIRPERSON: Commission Cardozo 14 raised promotion, which reminded me of another question 15 that I wanted to ask you and did not. 16 11012 At the top of page 12 of your written 17 submission, you mention the use of local avails and how 18 these are helpful in promoting Canadian programming. I 19 guess that is your point. 20 11013 The use of local avails, is any of 21 that for free, or is it always paid for by the service? 22 11014 MR. SHAW: The local avail system 23 that is in place, that was applied for to the 24 Commission, is a cost recovery system to install. 25 Because Shaw is a national base, I think it took us $3 StenoTran 2351 1 million of total capital outlay to put the system in 2 place. 3 11015 It is open to everybody. The mix is 4 prescribed that 75 percent of this is available for 5 outside parties. Shaw is eligible to use 25 percent. 6 We don't even use our 25 percent. It is open to 7 everyone. We encourage lots of people to come on. 8 11016 As you know, if you have ever watched 9 an event and seen the same commercial about three times 10 in a row, the next time you see it you just phone up 11 and say: "I want that off." 12 11017 It is not something that you can just 13 blitz and use yourself all the time. I think we were 14 saying to people that were on there, if they wanted to 15 run -- there are about a hundred and some commercials a 16 day. I think the cost was $8 for a commercial to run, 17 or something. 18 1035 19 11018 THE CHAIRPERSON: By cost recovery 20 you mean the amortization of the capitalization, the 21 maintenance and management of stations. 22 11019 MR. SHAW: Yes. We have one person 23 that runs it in a program and across Canada. People 24 would send their commercials in. 25 11020 THE CHAIRPERSON: So it's relatively StenoTran 2352 1 inexpensive and could be effective. 2 11021 MR. SHAW: Yes. 3 11022 THE CHAIRPERSON: I see, for example, 4 quite a bit of it on A&E. 5 11023 MR. SHAW: It will be all on the U.S. 6 services. 7 11024 THE CHAIRPERSON: No, but on some 8 services that you know have high viewership it would be 9 more valuable. 10 11025 MR. SHAW: Right, and they cross-use 11 it. 12 11026 THE CHAIRPERSON: Thank you. 13 11027 MR. SHAW: Thank you. 14 11028 THE CHAIRPERSON: Commissioner 15 Wilson. 16 11029 COMMISSIONER WILSON: Hi. I have a 17 couple of areas that I want to look at with you. One 18 is further to some questions that Commissioner Wylie 19 was pursuing. 20 11030 Mr. Cassaday said that the overall 21 aim is to create more and better programming for the 22 Canadian system. I want to talk to you, just so that I 23 understand more clearly, about the top-up fees from the 24 licence fee program. You may want to get your 25 Vice-President of Corporate Development involved in StenoTran 2353 1 this answer. 2 11031 What I am struggling with is if the 3 aim is to create more programming, how does it help if 4 we allow top-up fees to count as part of the 5 broadcasters' Canadian content expenditures? How does 6 that help to create more programming? 7 11032 I will give you the example that I 8 wrote down here. Maybe I'm just completely confused, 9 but you can tell me. 10 11033 Let's say that the expenditure 11 requirements are, you know, 5 per cent of your 12 broadcast revenues. Then you get licence top-up fees 13 which are equal to about another 1 per cent. That 14 means the total you are spending is actually 6 per cent 15 on Canadian programming. 16 11034 If the licence top-up fees are 17 included as part of your Canadian expenditures, then 18 you are only spending 5 per cent and 1 per cent of that 19 5 per cent is actually money that you didn't spend. 20 You got it through the licence fee top-up program. 21 11035 How does that help to create more and 22 better programming if you are not putting the whole 5 23 per cent in and then adding the licence fee top-up, but 24 in fact you are only putting in 4 per cent. 25 11036 MR. CASSADAY: Let's take the example StenoTran 2354 1 -- let's use your analogy of 5 per cent. Let's take 2 the example of "Due South". "Due South" has a price 3 tag associated with it of, say, $1 million. 4 11037 Well, 5 per cent of a million dollars 5 is more than 5 per cent of a show that has less 6 Canadian content in it, what we have come to call an 7 industrial show. 8 11038 COMMISSIONER WILSON: Yes. 9 11039 MR. CASSADAY: Now the broadcaster is 10 faced with the decision of saying "Okay, I've got to 11 spend 5 per cent, but if I spend the money on a "Due 12 South" and I get the top-up, I am going to get a lot 13 better program on the air than if I am completely 14 wedded to just spending a fixed dollar amount". 15 11040 I think the opportunity is to 16 encourage broadcasters to try to find a way to cobble 17 together the best shows, not to simply spend the money 18 at the prescribed level. 19 11041 MR. TEICHER: To elaborate on that 20 answer, I guess what we would say is the LFP 21 contribution is absolutely essential to making, I 22 think, the high quality Canadian programming we 23 support. I don't believe it's essential that 24 broadcasters be able to use it as part of meeting their 25 condition of licence. The math is easy. It is the way StenoTran 2355 1 you describe it. 2 11042 If they are using it to get to their 3 prescribed condition of licence level, then they can 4 sponsor less programs. 5 11043 COMMISSIONER WILSON: Yes. 6 11044 MR. TEICHER: The math is clear and 7 irrefutable. I guess the risk is if you sort of say 8 they are going to use the LFP envelope anyway so why 9 don't we just gross up their condition of licence 10 contribution on the theory they will get to the LFP 11 envelope, then I think it makes it more complicated, 12 frankly, for everybody in the system in dealing with 13 something with LFP where the rules change from year to 14 year to try and accommodate the changes in the 15 industry. 16 11045 Probably the LFP contribution should 17 be considered two different ways, one way in terms of 18 how do we finance programs and the importance of it and 19 another way in terms of how can licensees use it in 20 terms of meeting their condition of licence 21 requirements. 22 11046 COMMISSIONER WILSON: Okay, that's 23 the answer I was looking for. Maybe I should admit I 24 was looking for a specific answer when I asked the 25 question. Okay. I just wanted to verify that I StenoTran 2356 1 understood. 2 11047 The second area that I want to talk 3 about is this area of promotion. I actually want to 4 tie it to the CAB's proposal on viewership. It may be 5 different for you since you run specialty channels, but 6 you have got a pretty wide range of experience sitting 7 at the table. Maybe you can try and shed some more 8 light on how that works. I actually raised this with 9 Astral yesterday. 10 11048 Mr. Cassaday, you made the point that 11 promotion is not integral to the system. I guess I can 12 understand that from a purely business perspective when 13 you are making hard decisions about you have so much 14 money and you have to decide how you are going to spend 15 it. That can be one of the first things to be pushed 16 off to the side. 17 11049 In terms of generating revenues for 18 your companies, and maybe again this is a very 19 simplistic way of looking at it, but if you promote the 20 programs, and this is part of what the CAB is 21 suggesting, that they get credit for promotion as part 22 of their Canadian content requirement and through 23 promotion they build viewership. 24 11050 The benefit to them, it must be, at 25 least in my mind, that the more viewers you have, the StenoTran 2357 1 better the ad sales are. The more ad sales you have, 2 the more revenues you make. The more revenues you 3 make, the more money you can put towards Canadian 4 programming. 5 11051 It wasn't laid out that way in their 6 proposal, but is that how it works? If that is how it 7 works, then why is promotion not integral? Why would 8 you not spend the money on it in order to build the 9 viewership, in order to generate the ad sales, in order 10 to generate larger revenues for the company? I will 11 stop short of greater Canadian programming, but -- 12 11052 MR. CASSADAY: Commissioner Wilson, 13 perhaps I'm wrong here, but I don't believe I said that 14 it was not integral. I said it was variable cost and 15 as a result was cancellable. If I did say it wasn't 16 integral, it is integral. Promotion is an important 17 part of our business. 18 11053 If you were to take, for example, the 19 case of Coca-Cola. Coca-Cola is a sustainable brand. 20 The notion of committing advertising funds on a 21 consistent basis, non-cancellable, the wisdom of that 22 is irrefutable. 23 11054 In the case of television where, you 24 know, the shelf life could be a short as three episodes 25 or as long as eight years, quite variable, regardless StenoTran 2358 1 of the amount of promotion that's put in, it becomes 2 much more of a discretionary item. The level of 3 commitment that a broadcaster is willing to make to a 4 perishable product like a program can't be looked at 5 with the same linear logic that you applied to your 6 analysis. 7 11055 We don't know. We could believe -- 8 Peter has just committed to a show that we are really 9 excited about where young kids will submit scripts and 10 we will shoot their ideas. It's a terrific idea. 11 11056 Now, should we go out and spend a 12 million dollars behind that show because we believe 13 it's such a terrific idea? Well, I guess if we were 14 encouraged to because it was part of our overall 15 commitment and we were willing to put our money where 16 our mouth is, we probably would. 17 11057 The way it is now where it's purely 18 discretionary, that's a real crap shoot for us to put 19 that on because, you know what, we may find that their 20 production problems are so huge that it doesn't warrant 21 continuing or we may find that our audience just isn't 22 turned on by that show at all. Now we have spent a 23 million dollars up front to promote it, we get no 24 return. 25 11058 When Doug Ivester, the President of StenoTran 2359 1 Coca-Cola, makes his decision, he is assured that 2 Coca-Cola is going to be available on the shelves after 3 the impact of the advertising has been felt. 4 11059 COMMISSIONER WILSON: That's helpful. 5 That's great. 6 11060 Thank you. 7 11061 THE CHAIRPERSON: Commissioner 8 McKendry. 9 11062 COMMISSIONER McKENDRY: Thank you, 10 Madam Chair. 11 11063 Just on your last point, Mr. 12 Cassaday, is that why then you would direct a lot of 13 your promotion towards the YTV brand, or do you? 14 11064 MR. CASSADAY: Certainly the YTV 15 brand is sustainable. If we believe we can create a 16 brand that kids find is cool, or now this year weird, 17 and some place they want to gravitate to, then we have 18 got a chance to hold them as we present various 19 programs. 20 11065 We have used the analogy that 21 television is a bit like a buffet table now. We know 22 there is a wide array of choices. How do you get them 23 to start loading up their plate with what you have got 24 to offer? The way to do that is to use the superbrand, 25 which is YTV in the case of our children's property, StenoTran 2360 1 CMT in the case of the other. If you can draw them to 2 the brand and then let the programs stand on their own, 3 terrific. 4 11066 The secondary way you go at it is to 5 try to create specific appeal or specific draw to a 6 program by specific promotion. This year we are doing 7 a combination of both in both YTV and CMT's case, but 8 certainly the stuff we do on brand building we know is 9 more sustainable than anything we do on a perishable 10 program. 11 11067 COMMISSIONER McKENDRY: Now, does 12 Coke have the same problem in the sense that when they 13 introduced Cherry Coke -- is that a perishable product? 14 11068 MR. CASSADAY: Absolutely. The risk 15 profile on that is far greater than the risk profile on 16 their core business. 17 11069 COMMISSIONER McKENDRY: So the Cherry 18 Coke is akin to a specific Canadian program in your 19 business. 20 11070 MR. CASSADAY: I don't know if the 21 analogy is exactly correct. I did start it, so I guess 22 I got to finish it. 23 11071 The risk profile on new products is 24 similar to the risk profile we have on our television 25 programs. StenoTran 2361 1 11072 COMMISSIONER McKENDRY: So in a sense 2 the marketing problem that you face is similar to the 3 marketing problem Coke faces. They have to sustain 4 their Coca-Cola brand, but on the other hand, when they 5 introduce new products, which is a perishable product I 6 take it until it wins consumer acceptance, it's really 7 just like your business in that sense. 8 11073 MR. CASSADAY: Right. I can't resist 9 the temptation of just reinforcing the other point we 10 made. Again, Coke is a big successful company with 11 access to large capital streams, high capitalization. 12 11074 If we can see a way clear in Canada 13 to creating these strong Canadian companies that can 14 sustain themself despite a huge failure, i.e. a huge 15 investment in a major new product or program that 16 fails, then we are serving the country better. 17 11075 Right now with so many small players 18 that can't afford to take a risk because they can't 19 afford to fail, we hurt ourselves. 20 11076 Our vision of the future, which talks 21 about companies with much more horizontal integration 22 and perhaps much more vertical integration, is a way to 23 ensure that we have this substantial and financial 24 wherewithal to withstand the risks that are required on 25 new programs and the promotion that is required to StenoTran 2362 1 support them and make people aware of them. 2 11077 COMMISSIONER McKENDRY: And I assume 3 Coke has to pay attention to its core product. It 4 can't just sit back and say "Well, everybody drinks the 5 stuff and it's always going to be on the shelves". 6 They must continue to market it, to pay attention to 7 it. 8 11078 MR. CASSADAY: We certainly hope they 9 think that way. 10 11079 COMMISSIONER McKENDRY: The reason I 11 wanted to ask you about that is one of the things I am 12 having difficulty wrestling with in the proceeding that 13 we have before us, and I know you have a lot of 14 marketing experience, is that over the years Canadian 15 program expenditures have gone up dramatically. 16 11080 The Canadian Association of 17 Broadcasters provided a schedule that shows that they 18 have tripled between 1985 and 1997. At the same time 19 the product, the viewership of the product, has 20 remained flat or even declined slightly, whether it's 21 all Canadian programming or the category 7, 8 and 9. 22 11081 Huge increase in expenditures, flat 23 consumption of the product. Is that because Canadian 24 broadcasters haven't paid attention to their product? 25 Is it a marketing problem? StenoTran 2363 1 11082 MR. CASSADAY: There are a number of 2 factors. There has certainly been tremendous 3 fragmentation over that time period. We have seen the 4 erosion of conventional television shares. Holding its 5 share of viewing in an environment where there are a 6 multitude of additional choices is perhaps an arguably 7 not bad performance. 8 11083 On the other hand, what we need to 9 make sure is that the quality of promotion is on a 10 level with the quality of the program. You know, there 11 is the expression you can lead a horse to water, but 12 you can't make it drink. Great promotion can cause 13 sampling of a program, but ultimately the program has 14 to justify people coming back to trying it a second 15 time and a third time. 16 11084 I think the combination of factors 17 that we have got to strive for is outstanding promotion 18 and commitment to promotion, coupled with continued 19 improvement in the quality of our programs. 20 11085 If we can draw people to them and if 21 they can hold them, you know -- I think we are all 22 excited about seeing "Power Play". Certainly the 23 promotion leading up to it has been outstanding. Will 24 the program deliver commensurate with the enthusiasm 25 that is being created? Let's hope so. We will have StenoTran 2364 1 another success story on our hands. 2 11086 COMMISSIONER McKENDRY: Did I hear 3 your correctly that it's not bad performance that so 4 much money would be spent on Canadian programming over 5 that period, tripling, while viewing stayed flat? 6 11087 MR. CASSADAY: No. Again, in an 7 environment where we have gone from, you know, say 20 8 channels to 80 channels, one could take the view, and 9 certainly none of us are thrilled with the fact that 10 3.1 per cent of viewership is to Canadian drama despite 11 this promotion, but one could take the view of how bad 12 could it have been had we not supported it as 13 aggressively as we did. 14 11088 As I said, I think that there are two 15 aspects to this. One is the quality and commitment to 16 promotion and the quality of the program and the 17 ability to hold the viewer. 18 11089 Are we thrilled with where we are at? 19 I don't think any of us are thrilled. Are we 20 optimistic about where we can go? I think all of us in 21 the industry are very optimistic about the future of 22 Canadian broadcasting. 23 11090 COMMISSIONER McKENDRY: Let me ask 24 you a question about the sharing of first windows that 25 you discussed with Commissioner Wylie. I just wanted StenoTran 2365 1 to make sure I understood that. 2 11091 The way you described it was that the 3 share would be between a specialty and a conventional 4 broadcaster. I take it that there would be no 5 incentive on the part of two conventional broadcasters 6 to share because they compete directly with each other. 7 11092 Is that why it would be a specialty 8 and a conventional? 9 11093 MR. CASSADAY: I don't think we 10 talked illustratively in the context of sharing between 11 specialty and conventional. 12 11094 What we meant in the broadest sense 13 is we need a system that's collaborative in every 14 respect. If it makes sense at some point in the future 15 for two conventional broadcasters to work together, 16 perhaps a family show that appears at seven o'clock on 17 one network would make an excellent program on Saturday 18 for another, the key is to get the programs produced 19 and let the relationships evolve. 20 11095 COMMISSIONER McKENDRY: Should you 21 see more than two broadcasters sharing a first window? 22 11096 MR. CASSADAY: There could be models 23 where that would work, Commissioner. Maybe, Peter, you 24 have a comment on this. 25 11097 Again, there are so many StenoTran 2366 1 opportunities for exposure, just going back -- there's 2 an old colleague of mine who used to say that "Phantom 3 of the Opera" was a re-run after its opening night and 4 yet it has been on for ten years. There are still 5 people filling the theatre every day who haven't seen 6 the show. 7 11098 The more opportunities we have to 8 expose the product, the more opportunities we have to 9 start building the audiences. 10 11099 COMMISSIONER McKENDRY: So in this 11 proceeding if we took your suggestion to allow more 12 flexibility with respect to sharing first windows we 13 shouldn't, in your view, restrain it to a specialty and 14 a conventional, that we should leave it up to the 15 parties to decide what would be appropriate. 16 11100 MR. CASSADAY: That would be my 17 sense. 18 11101 MR. TEICHER: Would it be helpful to 19 sort of look at it from a financing model point of 20 view, to maybe put a point on it? 21 11102 Part of the difficulty is, for 22 example, if you don't want to restrict in the kids' 23 television area to just doing puppet shows, which are 24 low cost to do, therefore a 15 per cent threshold is 25 much lower. StenoTran 2367 1 11103 If you want a diversity of programs, 2 you like kids to experience live action drama, 3 animation, which is quite a bit more expensive, or 4 computer generated animation, which is again quite a 5 bit more expensive, you are dealing with the same 15 6 per cent threshold. 7 11104 Let's take an example of a show that 8 has a $500,000 budget. A producer will come to us and 9 say "At minimum, I need a licence fee of 15 per cent or 10 $75,0000 in order to get to the fund because in 11 combination with the fund and perhaps the tax credit 12 mechanism and some foreign pre-sales, I can make my 13 show". 14 11105 Right now we may have a choice of 15 saying yes, we can support you at that $75,000 level or 16 no, we can't. Therefore, that producer may be in a 17 position to make their show. If we were in a position 18 to say well, if we could share the cost with other 19 broadcasters, you could make your threshold. 20 11106 The difficulty is if only one 21 broadcaster can get recognized for the first run, only 22 one broadcaster wants to put up significant dollars. 23 For example, if there's a second window with a second 24 broadcaster that won't get first run credit, they may 25 say "Well, I'll put up 2 per cent or 3 per cent of the StenoTran 2368 1 budget, but I won't come up with a lot of money because 2 I don't get the first credit". 3 11107 One of the thoughts we have is if we 4 are driving for more programming, if there's an 5 opportunity for more than one broadcaster to take first 6 run credit, then they will both step up to the plate 7 with significant dollars which will enable you to meet 8 the threshold, which will allow more production to get 9 made. 10 11108 The good news is we have had the 11 experience that a show can run on more than one network 12 and succeed for both networks, so the market tells you 13 it can be done. The difficulties in financing 14 independent production hand in hand with the 15 requirements and condition of licence may make it 16 difficult for a number of shows to get financed. 17 11109 COMMISSIONER McKENDRY: Thank you. 18 11110 I want to make sure I understand the 19 new environment for specialty services that you talked 20 about. They are in my notes. 21 11111 The four characteristics that I took 22 down were limited advertising revenue, subscriber 23 revenue dependent, no or little administrative expenses 24 I think you said, and no bricks and mortar. 25 1055 StenoTran 2369 1 11112 Then you went on, I think, to say 2 that in that environment if one could graft a specialty 3 service onto an existing structure -- that those were 4 the reasons that it was necessary to graft a specialty 5 service onto an existing structure. The benefits that 6 I took down that you set out -- and really that's what 7 I want to understand better -- is affiliation support 8 and research support. What is affiliation support? 9 11113 MR. CASSADAY: A couple of points, 10 first of all, why this new model works. Shaw has made 11 a commitment to digital. We are committed to having 12 400,000 digital boxes in place over the next four years 13 or so. We have DTH out there, probably another 14 million. So, there are going to be new opportunities 15 for new channels, but they are not going to be the 16 analog model of the past where you are going to be 17 guaranteed five to eight million households. So, you 18 are going to have to cut your cloth accordingly. 19 11114 The point is that the way to do that 20 efficiently -- and this doesn't mean new players can't 21 come in, but they are going to have to find partners to 22 participate. We believe that there will be new 23 services launched with as few as 10 people, but they 24 will program 24 hours a day and they will have levels 25 of Canadian content that are satisfactory to the StenoTran 2370 1 Commission when they licence them. 2 11115 We used two illustrative examples in 3 the case of CMT as to how they are benefiting from 4 their association with YTV. One was research. There 5 is an outstanding research department at YTV that CMT 6 has access to for all of their viewer data so that they 7 can begin to translate the impact of their audience to 8 their advertiser. 9 11116 The other area that they used is 10 Paul's affiliate relations people -- not Paul's, but 11 Shaw's media affiliate relations people dealing with 12 all the cable companies across the country on the 13 carriage issues and the placement of tiers and the 14 contracts. These are all expenses that are shared as 15 opposed to absorbed individually by CMT, who has much 16 lower revenues than YTV, but CMT has much higher 17 revenues than perhaps the next tier of specialties will 18 have. 19 11117 Does that help? 20 11118 COMMISSIONER McKENDRY: That helps. 21 I understand the concept of research support. 22 Affiliation support refers to the fact that, in your 23 case, the carrier has digital -- 24 11119 MR. CASSADAY: No. Affiliation 25 support basically is a sales representative -- StenoTran 2371 1 11120 COMMISSIONER McKENDRY: Oh, I see. 2 11121 MR. CASSADAY: -- who is dealing with 3 the customer, who in this case is the cable company or 4 Star Choice or ExpressVu or LookTV, those people that 5 carry the CMT signal. We have to arrange carriage 6 terms, contract terms, payment terms, advise them of 7 program changes and so on, and that is a significant 8 job that requires a lot of logistics. 9 11122 COMMISSIONER McKENDRY: But it's your 10 view that specialty services that can't graft onto an 11 existing structure will be able to compete effectively 12 against those that can and take advantage of the things 13 that you have just discussed with me? 14 11123 MR. CASSADAY: It's our view that in 15 a world that perhaps has access to 600,000 or 800,000 16 households, it's hard to imagine how they could survive 17 with significant capital appropriations on redundant 18 assets like bricks and mortar. Those days are gone. 19 It doesn't mean new players can't join the industry, it 20 just means they are going to have to find partners. 21 It's hard to imagine that there will be another TSN, 22 for example, in this environment. 23 11124 COMMISSIONER McKENDRY: Those were 24 all the questions I had, but perhaps Commissioner Wylie 25 has one. StenoTran 2372 1 11125 Thank you, Madam Chair. 2 11126 THE CHAIRPERSON: Commissioner 3 Wilson? 4 11127 COMMISSIONER WILSON: I have one more 5 question. Mr. Cassaday, I want to pick your brains on 6 this viewership thing. I'm sort of like a dog with a 7 bone on the viewership issue. We don't have to stick 8 with my linear example. Feel free to be as lateral as 9 you want. 10 11128 How does it help the system to set 11 viewership as the target? In the absence of that 12 linear example that I gave you, how does it help the 13 system? 14 11129 MR. CASSADAY: We have a number of 15 ways of measuring Canadian content, the contribution of 16 Canadian content dollars. Many of the broadcasters 17 have dollar commitments on Canadian content. That's 18 one measurement device. 19 11130 COMMISSIONER WILSON: Exhibition. 20 11131 MR. CASSADAY: Hours is another 21 measurement device. 22 11132 COMMISSIONER WILSON: Right. Option 23 A and Option B. 24 11133 MR. CASSADAY: Yes, and I think what 25 the CAB was proposing over and beyond that is a StenoTran 2373 1 commitment on the part of the system to elevate 2 viewership. 3 11134 COMMISSIONER WILSON: Which is great, 4 that's what we all want, but how does it help the 5 system? For example, how does it help create more 6 programming or more exhibition or better exhibition? 7 What's the relationship? 8 11135 MR. CASSADAY: The relationship, of 9 course, is that as we increase viewership, we 10 ultimately increase revenues that are derived from that 11 viewership and if companies are contributing to 12 Canadian content as a percentage of their revenue, 13 ultimately the pie just keeps getting bigger. 14 11136 COMMISSIONER WILSON: So, my linear 15 example does work? 16 11137 MR. CASSADAY: In that particular 17 case, yes. 18 11138 COMMISSIONER WILSON: So then all of 19 the suggestions about including promotion expenses as 20 part of your Canadian content expenditure commitments 21 means that that risk that you were talking about, the 22 incredible risk of promoting a product that may have a 23 very short shelf life, that risk would be assumed as 24 part of the Canadian content expenditure? 25 11139 MR. CASSADAY: That's correct. StenoTran 2374 1 11140 COMMISSIONER WILSON: So, you 2 wouldn't really be taking the risk? 3 11141 MR. CASSADAY: You are taking the 4 risk, but it's now a fixed cost. So, you have the 5 decision to make as to whether or not you want to 6 allocate that fixed cost to programming or to 7 promotional expense or to other avenues that you 8 have -- 9 11142 COMMISSIONER WILSON: To get people 10 watching? 11 11143 MR. CASSADAY: Right. 12 11144 COMMISSIONER WILSON: Okay. That's 13 great, thanks. 14 11145 THE CHAIRPERSON: One last question, 15 Mr. Cassaday. In relation to conventional services, 16 you have used the analogy often that you can take them 17 to the fountain, but not make them drink. Presumably, 18 if your goal was to make horses drink, you would take 19 them to the fountain when they are thirsty, at the end 20 of the day when the sun is going down, and you make the 21 water as bubbly and cool and appealing as possible. 22 11146 So, what if, to get more Canadian 23 programming of higher quality in under-represented 24 categories, the Commission were to say, "All we are 25 going to do is impose exhibition requirements. We are StenoTran 2375 1 going to make you provide the water at the best time of 2 the day in competition with other services that are 3 available and in order to stay in the game, you are 4 going to have to air quality programming." In other 5 words, the only requirements would be vis-à-vis 6 exhibition and time of day. 7 11147 Do you think that could lead to 8 results that would be less economically difficult, 9 would lead to flexibility because you could get access 10 to the fund or whatever way you can negotiate to get 11 programming of high quality? Otherwise, the 12 conventional broadcaster would lose all these hours of 13 viewership at a time when the horses are all around the 14 fountain. 15 11148 MR. CASSADAY: Certainly, it's a 16 terrific analogy. The one thing that we didn't talk 17 about is how much. I think one of the things that -- 18 let me talk for a minute as a former conventional 19 broadcaster and say that there is no conventional 20 broadcaster that gets more satisfaction out of buying 21 an American show than actually contributing to the 22 development of a strong Canadian show. 23 11149 So, contrary to what some people may 24 believe -- and I don't believe any of you do -- the 25 entire orientation of a Canadian broadcaster is to StenoTran 2376 1 develop an outstanding service where their Canadian 2 shows are their best shows. I mean that's what we all 3 woke up every morning -- that's what they all wake up 4 and every morning and think about doing. So, when you 5 ultimately make -- 6 11150 THE CHAIRPERSON: Not necessarily all 7 the way to the bank. 8 11151 MR. CASSADAY: Not necessarily. So, 9 when you ultimately make your decision, you have to 10 make that decision in the context of what they are up 11 against because we may take the attitude that it's in 12 the best interests of us to drive people towards a 13 significant increase in the amount of Canadian content 14 because, whether they know it or not, we are helping 15 them out. They are going to be much better off in the 16 long term. 17 11152 But the fact of the matter is that, 18 regardless of what we put on the air, there is going to 19 be an onslaught of foreign programming coming into this 20 country and Canadians will vote with their converter 21 hour by hour, half hour by half hour, day by day, and 22 what we want to make sure is that we remember that this 23 thing is -- perhaps Commissioner McKendry's point is we 24 are not doing that great a job because we are still at 25 3.1 per cent, but we all know that it's getting better, StenoTran 2377 1 it's improving, it's strengthening. 2 11153 We want to make sure that this system 3 remains strong, that the foundation broadcasters remain 4 strong and are able to make a contribution despite 5 fragmentation, despite the vagaries of the advertising 6 market, despite the vagaries of production funding 7 devices, that they are going to need the flexibility to 8 grow and be successful in the future and only if they 9 are successful will we have a strong production 10 community. 11 11154 So, it's finding the right balance. 12 I think we are certainly on the right track in terms of 13 our focus on having that exposure in the prime viewing 14 hours. So, now it comes down to: What is the right 15 amount to satisfy our policy needs and our interests in 16 developing the system? 17 11155 THE CHAIRPERSON: So, your answer to 18 whether this regulatory mechanism could be helpful is 19 yes or no? Secondly, I understand it would be a 20 question of how many hours, but to abandon spending and 21 just say, "These are the under-represented categories 22 and you must have so many hours in peak time and you do 23 it as you can", because there has been a cry for 24 flexibility, the one shoe shouldn't fit all. 25 11156 MR. CASSADAY: The simple answer to StenoTran 2378 1 -- there is no simple answer. The tools that are 2 available to the Commission to regulate the industry 3 are good tools: hours, dollars. 4 11157 THE CHAIRPERSON: My question was: 5 Should they continue to be in combination or could we 6 possibly be able to drop one if we added peak viewing 7 hours to the exhibition requirements? It's not magic. 8 It simply would be a new approach which could respond 9 to the cry for flexibility, et cetera. 10 11158 I just wanted your comments on 11 whether that approach could work. Suggestions have 12 been made that the three have to be combined; that is, 13 peak viewing hours and exhibition requirements and 14 spending in combination. I was starting to say, "Could 15 we disassociate them and get to the same result", and 16 you say possibly, as long as it's not an unreasonable 17 number of hours because it's the time when all the 18 horses are around the fountain. 19 11159 MR. CASSADAY: Right, and also -- 20 11160 THE CHAIRPERSON: And maybe they 21 would be wanting hay instead of the American pie. 22 11161 MR. CASSADAY: Because every 23 broadcaster has a different view of how they can 24 compete effectively and I think you are going to want 25 to consider what's possible for them in the context of StenoTran 2379 1 how they have positioned themselves in the marketplace. 2 11162 THE CHAIRPERSON: We thank you very 3 much. I am sure, looking at the hour, that you are 4 delighted we didn't keep you last night. 5 11163 MR. CASSADAY: We are pleased to be 6 here. Thank you. 7 11164 THE CHAIRPERSON: Pardon me? 8 11165 MR. CASSADAY: We are pleased to be 9 here. Thank you. 10 11166 THE CHAIRPERSON: Thank you very much 11 to all of you, ladies and gentlemen. 12 11167 We will now take a well-deserved 15- 13 minute break. 14 --- Short recess at / Courte suspension à 1115 15 --- Upon resuming at / Reprise à 1125 16 11168 THE CHAIRPERSON: Welcome back. 17 11169 Madame la Secrétaire. 18 11170 Mme BÉNARD: Merci, Madame la 19 Présidente. 20 11171 La prochaine présentation sera celle 21 de Pelmorex Inc. J'inviterais M. Morrissette à faire 22 la présentation. 23 11172 M. MORRISSETTE: Merci. 24 11173 The theme of our presentation this 25 morning is "Small is beautiful". StenoTran 2380 1 11174 THE CHAIRPERSON: So you were here 2 this morning. With my glasses on, I can't see a thing. 3 11175 MR. MORRISSETTE: I see. 4 PRÉSENTATION / PRESENTATION 5 11176 M. MORRISSETTE: Madame la 6 Présidente, Mesdames et Messieurs les Commissaires, mon 7 nom est Pierre Morrissette. Je suis le président et 8 chef de la direction de Pelmorex Inc., société qui 9 exploite la licence de radiodiffusion spécialisée des 10 réseaux The Weather Network et MétéoMédia ainsi que les 11 licences de radiodiffusion de 11 stations de radio et 12 d'un réseau national de programmation radio émis via 13 satellite qui dessert 102 stations affiliées. Je suis 14 accompagné de M. Luc Perreault, vice-président aux 15 Relations affiliés et aux Affaires réglementaires. 16 11177 Il nous fait plaisir aujourd'hui de 17 déposer devant vous les commentaires et les 18 observations de Pelmorex quant au sujet en l'instance. 19 11178 Pelmorex est une société résolument 20 tournée vers l'avenir. L'innovation technologique fait 21 partie de notre quotidien et nous croyons fermement que 22 le passé est garant de l'avenir et que le système 23 canadien de radiodiffusion est bâti sur des assises 24 solides que nous devons veiller à ne pas fragiliser. 25 En effet, par le passé, le Conseil a toujours su StenoTran 2381 1 maintenir un équilibre sain et raisonnable entre les 2 distributeurs et les fournisseurs de contenu de 3 programmation. 4 11179 Depuis la création des réseaux 5 spécialisés au Canada, le Conseil a toujours intégré 6 les notions de distribution dans ses grandes 7 politiques. Il est apparu évident au régulateur que la 8 distribution est la clé du succès pour les fournisseurs 9 de programmation spécialisée. 10 11180 Ce faisant, le Conseil a créé un 11 environnement où les consommateurs retrouvent une 12 excellente valeur en termes de qualité/prix et où les 13 distributeurs et les fournisseurs de contenu de 14 programmation spécialisé remporte des succès. Ces 15 indices sont des signes d'une industrie équilibrée. 16 11181 Our experience in Europe has showed 17 us that maintaining this equilibrium is essential. As 18 in Canada, most countries experience a shortage of 19 channel capacity and digital services are slow in 20 getting off the ground. Furthermore, regulation in 21 Europe is limited or even non-existent; access rules do 22 not exist. The European market is fragmented in terms 23 of size and language. As a result of this open market 24 environment without rules, where the distributors are 25 the undisputed gatekeepers, the quality and quantity of StenoTran 2382 1 programming services in individual countries is lacking 2 and dominated by foreign services. 3 11182 The bottom line is that the absence 4 of equilibrium between distributors and content 5 providers results in conditions of high risk and low 6 levels of economic viability for content services. 7 Viewers at large are the main losers since they do not 8 have access to the diversity and quality of domestic 9 services in their own language. 10 11183 Our experience backed by market 11 research supports the need for a weather-related 12 information service such as The Weather Network and 13 MétéoMédia exists in almost all countries in the world. 14 Weather affects everyone and is of interest to all. 15 Specialty television services in North America, such as 16 Weather Channel and ours, in the weather category rank 17 amongst the most popular and most widely distributed 18 specialty TV services. Part of this success is 19 attributable to balanced and favourable distribution 20 conditions. 21 11184 During the past four years, Pelmorex 22 has participated in the launch of five specialty TV 23 services in countries such as France, the U.K., Italy, 24 Benelux, and indirectly through our association with 25 The Weather Channel in Germany. The only service which StenoTran 2383 1 has survived is La Chaîne Météo in France, in which we 2 hold a 45 per cent economic interest. All other 3 services proved to be uneconomic because of brutal 4 distribution conditions. 5 11185 We decided to sell our interest in 6 all of our European services except France a year ago. 7 Since then, the remaining shareholders wrote off an 8 investment of US $50 million after less than two years 9 of operation and they shot everything down. In its 10 fourth year of operation, La Chaîne Météo will soon 11 break even after a cumulative investment of CDN $25 12 million by the shareholders. This is a very large 13 investment for a service of this type. It is clear, 14 therefore, that distribution is critical. It is 15 critical for the success of specialty services and 16 therefore for the success of a strong domestic 17 broadcasting system. 18 11186 Canada is blessed with one of the 19 best broadcasting systems in the world and should serve 20 as a model for all countries. Canadians have access to 21 a large variety of Canadian programming and a more 22 vibrant broadcasting system than citizens living in 23 larger countries in Europe. 24 11187 The Commission is to be commended for 25 its role in creating an environment where all players StenoTran 2384 1 thrive and contribute to the future development of the 2 system in the public interest. The challenge is to 3 build on this success in the years ahead. In our view, 4 maintaining the equilibrium between distribution and 5 content is the cornerstone of this strategy. 6 11188 L'environnement technologique et le 7 monde de la radiodiffusion évoluent à une vitesse 8 vertigineuse. Selon Time Magazine, il a fallu 40 ans à 9 l'industrie de la radio américaine pour atteindre le 10 seuil de 50 millions d'auditeurs. L'industrie du câble 11 aux États-Unis a rejoint 50 millions d'abonnés après 13 12 ans d'existence. L'Internet a rejoint 50 millions 13 d'abonnés en seulement quatre ans et le nombre 14 d'abonnés croît de façon exponentielle à chaque année. 15 11189 Ce sujet sera sans doute exploré lors 16 de l'audience sur les nouveaux média plus tard à 17 l'automne, mais nous sommes convaincus de l'étroite 18 relation entre le développement des nouveaux média et 19 l'avenir des créateurs de programmation canadienne. 20 11190 Nous croyons que le Conseil a soulevé 21 des questions très intéressantes dans l'avis public à 22 ce sujet et que nous devons nous pencher immédiatement 23 sur ce sujet. 24 11191 Selon une étude publiée en juin 1998 25 par la CTAM, Cable Television Association of Manager StenoTran 2385 1 and Marketers, aux États-Unis, les foyers possédant un 2 PC ont augmenté de 33 pour cent en 1994 à 45 pour cent 3 en 1998. De plus, seulement 4 pour cent des PC étaient 4 reliés à l'Internet en 1994 comparativement à 30 pour 5 cent en 1998. 6 11192 Ceci nous porte à croire que, dans un 7 avenir rapproché, les créateurs de programmation 8 canadienne devront se doter de nouveaux outils 9 numériques afin de répondre à l'avènement du multimédia 10 et de l'interactivité. en effet, le développement du 11 PC TV fera en sorte que les services de programmation 12 tels que nous les connaissons aujourd'hui devront se 13 marier à un pendant virtuel dans un monde 14 essentiellement interactif. 15 11193 Le déploiement de ces nouvelles 16 technologies conférera des bénéfices substantiels au 17 grand public. La valeur ajoutée principale permettra 18 au consommateur de personnaliser l'information et les 19 émissions virtuellement sur demande. Par contre, cette 20 situation aura un impact profond sur tous les créateurs 21 et diffuseurs de contenu canadien. 22 11194 In this new environment, and in order 23 to meet the expectations of Canadians, producers of 24 Canadian content will have to invest a significant 25 amount of capital in hardware, software, databasing and StenoTran 2386 1 digital content. To meet these future challenges, 2 Canadian programmers will need a stable environment in 3 order to plan a sound capital investment strategy if 4 they wish to evolve and thrive in the 21st century, an 5 environment where borders could be non-existent and, 6 therefore, more competitive. 7 11195 At this time the Commission 8 recognizes investments in production of Canadian 9 content for every licensees it oversees. However, the 10 Commission does not take into account dollars invested 11 in R&D and in interactive programming, which is our 12 future. For example, a service like The Weather 13 network/MétéoMédia, which employs 300 people and 14 produces 100 per cent of live Canadian programming 24 15 hours a day does not have access to production funds, 16 which are mainly reserved for more conventional half- 17 hour or hour long programming. All programming aired 18 by The Weather Network and MétéoMédia is financed 100 19 per cent by Pelmorex. 20 11196 For example, Pelmorex financed the 21 creation of technologies such as the All Channel Alert 22 system, which Environment Canada is adopting as part of 23 the future emergency broadcast system, localization 24 technology known as the PMX, which is installed in more 25 than 1,100 headends across the country, and one of the StenoTran 2387 1 most advanced weather forecasting engines in the world, 2 known as the PFE, which is the backbone of our core 3 weather information content. 4 11197 All of these technologies are unique, 5 proprietary and patented, requiring millions of dollars 6 of investment. But the fact is that none of these 7 technological developments, which are an integral part 8 of our on-air content, are recognized as an investment 9 in Canadian content. 10 11198 We would like to recommend to the 11 Commission that it creates mechanisms whereby 12 investments in technology that are directly related to 13 the creation of on-air content should be included as 14 part of the Canadian programming commitments. We do 15 not refer here to editing facilities, cameras or other 16 conventional production tools, but rather new and 17 innovative technologies that will enable the creation 18 and dissemination of Canadian content in the emerging 19 PC TV environment. 20 11199 Nous comprenons et nous partageons 21 les préoccupations du Conseil quant à la production de 22 contenus canadiens offerts aux heures de grande écoute 23 ainsi que des interventions quant à la visibilité des 24 productions canadiennes. Mais dans un monde où la 25 globalisation et la convergence des contenus et des StenoTran 2388 1 médias de distribution deviennent de plus en plus 2 évidentes, nous croyons que le débat se résume à 3 maintenir l'équilibre du système afin de permettre aux 4 différents joueurs d,évoluer et de répondre aux 5 challenges qui les interpellent. 6 11200 En effet, nous croyons que les 7 joueurs canadiens sont suffisamment créatifs et 8 innovateurs pour rencontrer les défis que posent le 21e 9 siècle. Par contre, ces joueurs auront besoin 10 d'investir des sommes importantes afin de se démarquer 11 de la compétition étrangère. 12 11201 Afin d'assurer une certaine forme de 13 stabilité, entre autres aux intervenants du domaine de 14 la télévision spécialisée canadienne, nous désirons 15 soumettre les pistes de réflexion suivantes au Conseil: 16 11202 - S'assurer du maintien d'un système 17 de radiodiffusion équilibré entre la distribution et le 18 contenu; 19 11203 - Les engagements de production de 20 contenu canadien devraient être calculés en fonction 21 d'un pourcentage des revenus bruts et non pas en heures 22 de diffusion; 23 11204 - Les services spécialisés offerts au 24 service de base devraient avoir des exigences plus 25 élevées en termes de contenu canadien. Par exemple, StenoTran 2389 1 The Weather Network et MétéoMédia diffusent 100 pour 2 cent de contenu canadien et sont offerts au service de 3 base. Afin de préserver ce niveau de contenu canadien, 4 le Conseil devrait reconduire le double statut des 5 services dont la proportion de contenu canadien est é 6 levée. 7 11205 - Ne pas ajouter de nouveaux services 8 étrangers à la liste des services admissibles afin de 9 favoriser des partenariats et des associations entre 10 les entreprises de radiodiffusion canadiennes et les 11 entreprises étrangères. Ceci aura pour effet 12 d'encourager le développement d'entreprises canadiennes 13 ainsi que de contenu canadien. 14 11206 Le Conseil doit donner des lignes 15 directrices claires quant aux questions touchant la 16 visibilité et la disponibilité des services de 17 programmation canadiens. La notion de canal de 18 distribution est extrêmement importante. St-Exupéry 19 disait: "l'essentiel est souvent invisible pour les 20 yeux, mais pour devenir essentiel, il faut être 21 visible." Il est impensable que des services canadiens 22 soient offerts à des positions très élevées, le canal, 23 alors que des services étrangers ou exemptés soient 24 offerts à des positions très basses. 25 11207 - To insure the highest level StenoTran 2390 1 possible of Canadian content on Canadian specialty 2 television, the Commission should improve the access 3 rules and look into issues arising from matters such as 4 channel realignments as being part of the access rules. 5 11208 - The Commission should consider 6 adding a notion of extended market area to the licences 7 of cable operators in large urban centres to favour 8 common channel line-ups. Promotion of Canadian 9 networks would then be easier, more efficient and user 10 friendly. 11 11209 - All commercial avails on foreign 12 services should be used to promote Canadian content. 13 11210 - The Commission should recognize R&D 14 investments in technology, as we described earlier. 15 11211 - Finalement, le Conseil devrait 16 mesurer avec beaucoup d'attention les débordements aux 17 conditions de licence des différents titulaires afin de 18 s'assurer que des situations compétitives ne se créent 19 pas sans son assentiment explicite. Cet élément 20 devient essentiel compte tenu de la fragmentation de 21 l'auditoire. 22 11212 Voici l'essentiel de nos 23 commentaires. Je vous remercie, ainsi que vos 24 collègues, de nous avoir entendus ce matin. We are 25 ready to answer any questions you may have for us. StenoTran 2391 1 11213 LA PRÉSIDENTE: Merci, Monsieur 2 Morrissette. 3 11214 Commissioner Wilson. 4 11215 COMMISSIONER WILSON: Good morning, 5 gentlemen. 6 11216 MR. MORRISSETTE: Good morning. 7 11217 COMMISSIONER WILSON: 8 Mr. Morrissette, thank you for being with us. We were 9 speculating yesterday about why you may not have been 10 able to make it into town and we concluded that it must 11 have been the weather that kept you, since you do 12 operate The Weather Network, although maybe you could 13 have had something to do with giving us a better day 14 yesterday; it was pretty windy and rainy. 15 11218 You raise a number of issues in your 16 submission, including the role of foreign services, 17 programming rights, advertising, technology and 18 corporate development as well as the contribution of 19 Pelmorex to Canadian programming and you also raise a 20 number of issues with respect to distribution and 21 access. 22 11219 As you know, we have initiated a 23 public process to deal with those issues, so I am not 24 really going to focus on them. I won't say that they 25 won't be talked about, because I made the same comment StenoTran 2392 1 to Astral yesterday, and the Chair decided to 2 transgress that rule -- and she has every right to do 3 that, since she is the Chair. 4 11220 THE CHAIRPERSON: I am not in jail 5 yet. 6 11221 COMMISSIONER WILSON: That's right. 7 I have been here too short a time to contradict her. 8 11222 Anyway, what I would like to do is 9 take you through your submission, and then there are a 10 few questions that I have arising from your oral 11 submission and I will just go back to those. 12 11223 The first area that you look at is 13 the whole issue of program rights and foreign services. 14 As you know, this is one of the core issues of this 15 hearing, although one of the biggest discussions that 16 we have around this issue seems to centre on who should 17 own the rights of programs, the producers or the 18 broadcasters, and they both like to own. 19 11224 Your submission, as well as a number 20 of other submissions, raises another aspect of the 21 issue, and that is the fact that you state that 22 evidence shows that several foreign programming 23 services have acquired North American rights for many 24 programs, effectively limiting access to these programs 25 by Canadian programming services. StenoTran 2393 1 11225 I wonder if you would just expand on 2 this a little bit and tell us whether or not this is an 3 issue that has a direct impact on you, and then also, 4 if you could just refer us to the evidence that you are 5 talking about, so that we have a bit of a touchstone 6 with respect to you, or is it just anecdotal evidence? 7 11226 MR. MORRISSETTE: To a large extent 8 anecdotal and discussions with some of our colleagues 9 in the industry. Specifically as it applies to The 10 Weather Network and MétéoMédia, we really don't face 11 that kind of issue. We are a content business, 12 specializing in information services; in fact, the way 13 we define our core business is multimedia weather- 14 related, which is quite broad, information services. 15 11227 The backbone of everything we do is 16 creating unique, and as proprietary as possible, 17 content that ties into our core business and having 18 rights to that information, having something that's 19 more comprehensive and of better quality than our many 20 competitors out there, because the weather information 21 field is a pretty broad one in terms of number of 22 players disseminating that kind of information. 23 11228 This means that we have to invest a 24 considerable amount in creating our own content, 25 because there are very few sources out there who will StenoTran 2394 1 do it for us, and creating our own rights that we can 2 then control our destiny with in terms of developing 3 our service down the road. 4 11229 So the situation of North American 5 rights, which include not just the U.S. market but also 6 the Canadian market, does not really apply to us. 7 11230 I don't know if Luc wants to add to 8 that comment. 9 11231 COMMISSIONER WILSON: So it is really 10 just more of a general comment about specialty services 11 in general. 12 11232 MR. MORRISSETTE: And it may apply 13 also to conventional television services in some 14 cases -- 15 11233 COMMISSIONER WILSON: Exactly. 16 11234 MR. MORRISSETTE: -- and may apply to 17 premium services as well. But, as time goes on, I 18 speculate that that threat will become more and more 19 real with more examples to back it up as time goes on. 20 11235 COMMISSIONER WILSON: We have heard a 21 lot of discussion about vertically-integrated U.S. 22 networks and the possibility that they will stop 23 selling Canadian rights to some of the programs that 24 they produce because their channels are already here, 25 and Canadian could see them regardless of whether or StenoTran 2395 1 not there were Canadian rights. 2 11236 MR. MORRISSETTE: Fortunately, that's 3 not on our radar screen I guess in terms of issues that 4 we spend a lot of time worrying about as a rule in our 5 own business. 6 11237 COMMISSIONER WILSON: That expression 7 is very appropriate to you in particular. 8 11238 MR. MORRISSETTE: To our business, 9 yes. 10 11239 COMMISSIONER WILSON: Yes. A lot of 11 people use it, though. 12 11240 MR. PERREAULT: Commissioner Wilson, 13 this is exactly what we are referring to in our 14 submission. Moreover, if you look to some of these 15 American specialties who are willing to basically hang 16 on to their programming, and when we look at this type 17 of programming, very often it is absolutely targeted to 18 some viewers group, they have a very easy time selling 19 advertising on these programs and to U.S. agencies 20 which represent major conglomerates like the Proctor & 21 Gambles, the GMs and the Fords and the Chryslers -- 22 11241 COMMISSIONER WILSON: They sell to a 23 North American-wide audience. 24 11242 MR. PERREAULT: Exactly. Therefore, 25 why should these conglomerates need to buy advertising StenoTran 2396 1 in Canada when they already get their viewership, their 2 commercials through the splash over in Canada. 3 11243 COMMISSIONER WILSON: Right. 4 11244 We have received a number of 5 suggestions on how the Commission could deal with this 6 particular issue, the North American rights issue, and 7 the suggestions have ranged from "do nothing and let 8 the market decide" to actually removing U.S. services 9 from the eligible list if they do not purchase Canadian 10 rights separately. 11 11245 Do you believe that the potential 12 repercussions of this issue are serious enough to 13 warrant regulatory intervention? 14 11246 MR. MORRISSETTE: As I say, it is 15 difficult for us to comment on that specifically -- 16 11247 COMMISSIONER WILSON: Because it 17 doesn't affect you directly. 18 11248 MR. MORRISSETTE: -- because our 19 services are almost an anomaly in the system, although 20 we are one of the most widely distributed services, we 21 are in 8.6 million homes in Canada today; CBC's study 22 last year said that we are one of the most watched 23 services in terms of frequency of consultation. Our 24 brand ranks number one in awareness based on that study 25 as well. StenoTran 2397 1 11249 So we have been very successful in 2 creating a presence in millions of homes in Canada on a 3 daily basis, but we are an information service and 100 4 per cent Canadian content created 100 per cent by 5 ourselves. In the earlier presentation we are talking 6 about 32 and 37 per cent of Canadian content being 7 viewed; well, for us, it is 100 per cent all day long, 8 all week long, all year long since we have existed. 9 11250 A lot of what we do is, our content 10 gets stored in databases. In fact, in preparing for 11 the future, we just built a brand new facility in 12 Mississauga for The Weather Network; it is 100 per cent 13 digital. Everything is stored in servers. We are just 14 getting prepared for when the database will be 15 broadcasting not just data but video clips and audio 16 clips and all of these information elements that will 17 tie in not with what people see on the PC but on the 18 television screen, and eventually emerging into a 19 virtual channel. 20 11251 It is different from most other 21 broadcasters who produce drama and entertainment 22 programs and what have you. In fact, what I find 23 interesting is that a lot of the focus seems to be on 24 those areas, but when we look at categories of 25 information that are viewed on Internet websites on on- StenoTran 2398 1 line services, what have you, news and weather 2 information rank Nos. 1 and 2. Everything else falls 3 much lower. 4 11252 So, to differentiate ourselves in 5 that area, we just have to understand what the market 6 wants, understand what the competitive elements are -- 7 and they are global -- and it is to develop unique 8 information that meets the needs better than anybody 9 else for that marketplace. 10 11253 COMMISSIONER WILSON: I hope that you 11 will bring that kind of vision and experience to the 12 new media process that we are involved in, because 13 that's exactly the kind of thing that we are interested 14 in exploring. 15 11254 MR. MORRISSETTE: In the context of 16 today's hearing, I am a pretty firm believer that the 17 new world of broadcasting, the new wonder of 18 broadcasting may not become -- I hate to say an 19 obsolete word, but where people will have an 20 opportunity to download programs, information, what 21 they want to watch when they want to watch through 22 various sources, that's going to happen, and rights 23 will become a very, very major issue in that context. 24 11255 COMMISSIONER WILSON: Actually, if we 25 progressed the digital universe, and their television StenoTran 2399 1 is actually a monitor as well, they could download them 2 and play them back on that same piece of equipment. 3 11256 MR. MORRISSETTE: Yes, and with the 4 speed of technology development, I believe that that's 5 going to happen. The issue is how long. It is going 6 to be an evolutionary process, but, in terms of setting 7 long-term policy frameworks and industrial strategies 8 for the Canadian broadcast system, we have to start 9 planning for those issues that arise from that today. 10 11257 COMMISSIONER WILSON: We will explore 11 that more during the new media process, but actually, 12 it just occurred to me when you were talking about your 13 Canadian content, 100 per cent Canadian content 365 14 days a year, that the system-wide viewership goals that 15 the CAB has proposed in terms of increasing overall 16 viewing to Canadian programming, not the under- 17 represented categories, but you could help them achieve 18 that goal. Somebody pointed out the CBC could help 19 increase that since you are 100 per cent and people 20 watch you so much. 21 11258 MR. MORRISSETTE: Uh-huh. 22 11259 COMMISSIONER WILSON: On the issue of 23 foreign services in general, just to go back to that, 24 your submission states that they make no direct 25 investment and their contribution to the Canadian StenoTran 2400 1 broadcasting system is minimal. In fact, you say their 2 only contribution is to provide packaging partners for 3 Canadian services and discretionary tiers made 4 available to the distributors' subscribers. 5 11260 I take it from this statement that 6 you are not that big a fan of the Commission's decision 7 authorizing the carriage of foreign services, or are 8 there too many? Do you think there are too many that 9 have been authorized? 10 11261 MR. MORRISSETTE: Historically, I 11 support the decisions that have been made. We have a 12 balanced system with a wide variety of Canadian 13 services and also a good complementary blend of foreign 14 services. But we have demonstrated over time that, in 15 many different categories, a Canadian service can be 16 launched and operate successfully, either on its own or 17 in partnership with the foreign service. 18 11262 Going forward, our view is that the 19 latter model should continue to prevail, where we 20 foster an environment that encourages mainly the 21 establishment of Canadian service either on its own or 22 in partnership. To allow a foreign service to come in 23 and preempt a category will basically make it very 24 difficult, if not impossible, for a Canadian equivalent 25 to emerge. StenoTran 2401 1 11263 COMMISSIONER WILSON: But do you 2 think, in a market the size of Canada, which is one- 3 tenth -- I mean, most of these foreign services are 4 essentially American services. In a market the size of 5 Canada, that is 10 times smaller than the U.S. and in 6 the U.S. it is so much easier to start a programming 7 service, you don't have to go through the same 8 licensing process, is it realistic to expect that we 9 could create programming services in every possible 10 niche of every possible genre and have those services 11 be built and become sustainable in this market, or do 12 we have to try to find the balance? 13 11264 MR. MORRISSETTE: It is going to get 14 more difficult as time goes on for the same reasons 15 that John Cassiday was describing in the earlier 16 presentation whereby, through digital services, the 17 mass of subscriber levels will be much lower and, 18 therefore, you need different models that perhaps 19 existed in the past. But I am from the school of 20 thought that there is always a solution. There is a 21 Canadian weather Network and its French counterpart 22 MétéoMédia in this country, and it is not The Weather 23 Channel from Atlanta. 24 11265 I am very proud of what we have 25 accomplished as Canadian services in our 10 years of StenoTran 2402 1 existence and I firmly believe that there are many 2 other future examples to be created that can accomplish 3 similar success. 4 11266 It so happens that The Weather 5 Channel in the last two years has become a partner and 6 a shareholder in our company. That is really working 7 to our advantage as well as to their advantage. During 8 the recent hurricanes, they have satellite trucks that 9 were right in the eye of the storm, basically, and we 10 worked out an arrangement with their reporters on the 11 spot whereby we get the exclusive distribution of these 12 live reports, live feeds from them, to benefit our 13 audience. And it is in geographic areas relevant to 14 our Canadian market. 15 11267 So that and technology exchanges; we 16 talked about sales opportunities before. Yes, there 17 are advertising buys that happen in the States and 18 cover only the States without a Canadian equivalent, 19 and we have been successful in the past year or two to 20 add on the Canadian market through our services through 21 their sales resources. So these kinds of co-operative 22 arrangements really ultimately end up to be the best 23 winning scenario, and they benefit because they have an 24 ownership position in our company. 25 11268 COMMISSIONER WILSON: One of the StenoTran 2403 1 things that you said with respect to these partnerships 2 is that one of the effects of these kinds of 3 relationships is the Canadian programs would be more 4 likely to appear on the programming grid of the foreign 5 partner in its country of origin. Is this happening 6 with any of your programming going south of the border? 7 Is some of your programming ending up on The Weather 8 Channel, or The Weather Network -- what is it called? 9 The Weather Channel -- Channel/Network. 10 11269 MR. MORRISSETTE: The Weather 11 Network. 12 11270 Well, in different ways. Again, we 13 are kind of a unique situation in the Canadian 14 broadcast system. We have developed a world class, if 15 not one of the most advanced weather forecasting 16 systems. We are working with them so that they can 17 potentially use this kind of system instead of them 18 recreating their own. That would be a licensing 19 arrangement. It is part of our content, so it is like 20 exporting Canadian content. 21 11271 We are going to be working with our 22 colleagues in France on the same basis, exporting some 23 of our technology, exporting some of our ideas that we 24 have developed in Canada. For instance, we are the 25 only national network in Canada that operates a StenoTran 2404 1 national road conditions database, the only service 2 that operates a national pollen count database. 3 11272 COMMISSIONER WILSON: The UV ray 4 technology. 5 11273 MR. MORRISSETTE: The UV is another 6 unique, and we are the only network or service in 7 Canada that operates this kind of system. 8 11274 Well, in our discussions and meetings 9 with them, they are now working on creating similar 10 types of situations in the U.S. market. It is not 11 something that we are licensing, but it is the cross- 12 fertilization of ideas. 13 11275 COMMISSIONER WILSON: So, 14 essentially, it is the technology-driven content. 15 11276 MR. MORRISSETTE: Uh-huh. 16 11277 COMMISSIONER WILSON: I mean, you do 17 a number of interstitials on your channel as well. It 18 is not those kinds of things that might end up on your 19 U.S. counterpart. 20 11278 MR. PERREAULT: Some programming does 21 end up on The Weather Channel in the U.S. and in La 22 Chaîne Météo in France. As you know, our business is 23 weather driven. Our ratings go up when severe weather 24 conditions arise in Canada. We have regional bureaus 25 over the country; that was part of the commitment when StenoTran 2405 1 Pelmorex acquired the network from Lavalin years back. 2 We have bureaus in Vancouver, Regina, in the Atlantic 3 and now a full-fledged digital facility in Toronto. 4 For example, when the ice storm hit Quebec last year, 5 obviously our on-air camera people, through satellite 6 feeds were live on the U.S. Weather Channel describing 7 the situation arising in Canada and were seen quite 8 often, actually, as the storm developed. 9 11279 The same thing happened in La Chaîne 10 Météo. We sent reports to La Chaîne Météo on this 11 event. 12 11280 COMMISSIONER WILSON: Yes, there was 13 probably more coverage on the U.S. channels of the ice 14 storm than there ever was on anything that was 15 happening in our political life. 16 11281 MR. PERREAULT: True. Even the 17 referendum. So that was quite interesting. 18 11282 Since we have bureaus all over the 19 country, when there are severe weather systems 20 affecting either B.C. or the Prairies or what have you, 21 our reporters are on the scene, and obviously we get 22 requests from our associates in the States or in Europe 23 about getting them footage. 24 11283 Yes, it does happen. 25 11284 MR. MORRISSETTE: In fact, just to StenoTran 2406 1 add to that, as part of our most recent agreement to 2 access some of their feeds during major weather events, 3 this is a reciprocal arrangement. In our discussions 4 with friends, this is also subject for future action. 5 11285 So these opportunities do exist. It 6 is not so much a sale, but it is an exchange that 7 enables us to enrich all of our respective programming. 8 11286 COMMISSIONER WILSON: So, if there 9 wasn't that ownership connection, could you not also 10 license your technology to them? Lots of the 11 conventional broadcasters make arrangements with 12 broadcasters in the U.S. -- Global is with, I don't 13 know, NBC or something like that to take clips from 14 them and use that in their news. You could essentially 15 do the same thing without actually engaging in that 16 ownership relationship. 17 11287 MR. MORRISSETTE: I would venture to 18 say that the scope and depth of our arrangements would 19 not be anywhere near the level that it is were it now 20 for the ownership arrangement. 21 11288 COMMISSIONER WILSON: So the quality 22 is better. 23 11289 MR. MORRISSETTE: Yes. I totally 24 support, to the extent that it is necessary or 25 justified, partnering with a foreign service that StenoTran 2407 1 operates in a similar domain. It creates opportunities 2 for synergy and for enhancements that you wouldn't have 3 otherwise. 4 11290 When you sit down at regular board 5 meetings and it comes right from the top to co-operate 6 and participate, followed up with exchanges of market 7 research, exchanges of 3-D graphics technology 8 developments, database development strategies, all of 9 these things that are critical to our business, these 10 are the kinds of discussions that happen all the time. 11 11291 COMMISSIONER WILSON: I think it is a 12 really valuable suggestion and I think that we heard 13 from someone during this proceeding who made a comment 14 about a U.S. channel that was part of a partnership to 15 get a licence in Canada and they appeared before the 16 Commission. They ended up not getting a licence and 17 realized afterwards that their channel was actually on 18 the eligible list. So they didn't even really have to 19 have that partnership. I was quite interested by that. 20 11292 MR. MORRISSETTE: But there is one 21 very important element to note, though. There is a 22 very, very different look and programming strategy 23 between The Weather Network and MétéoMédia and The 24 Weather Channel in the States, and similarly between 25 the services in those two markets and the one in StenoTran 2408 1 France. Even in our country there is a different look 2 and feel between The Weather Network and MétéoMédia. 3 11293 COMMISSIONER WILSON: So even weather 4 expresses the value of a people. 5 11294 MR. MORRISSETTE: It is presented in 6 different ways. 7 11295 It is interesting that, well, first 8 of all, there are geographic differences obviously in 9 the market, but to succeed in terms of achieving the 10 highest potential audience levels, we have tailor our 11 programming to meet the local market needs, and that's 12 a big part of what we do. 13 11296 COMMISSIONER WILSON: One of the ways 14 that you suggest that foreign services could make more 15 of a contribution in the Canadian broadcasting system 16 is if the Commission ordered the substitution of all 17 advertising segments broadcast on these services with 18 promotions of Canadian programming. Astral, as you 19 know, made the same suggestion and a number of people 20 have been making this suggestion. 21 11297 I am just wondering -- I will ask you 22 the same question that I asked Astral, or two 23 questions, really. One is, do you foresee a regulation 24 on the part of the Commission ordering the substitution 25 of all that advertising as setting off any concerns StenoTran 2409 1 with respect to trade between the two countries? And, 2 secondly -- I mean, maybe you don't want to comment on 3 that. It just occurred to me if we regulated the 4 substitution of all the advertising, how is the U.S. 5 going to react to that in view of free trade and all 6 the different trade relationships that we share with 7 them. But also, I wondered if you had talked to any of 8 the U.S. services about this idea and what their 9 reaction might have been. 10 11298 MR. MORRISSETTE: Well, needless to 11 say they would prefer to maintain the status quo. We 12 have not talked to any U.S. services along these lines, 13 but if we just step back for a moment, they are 14 deriving tremendous amount of revenues, subscriber 15 revenues, from the Canadian system. Every other player 16 in Canada happens to be a Canadian licensee, comes 17 before you, and we discuss the most appropriate 18 commitments, programming commitments, to ensure that we 19 have a strong Canadian broadcast system. Right now 20 they have a huge benefit that they have no such 21 requirements. 22 11299 Having said that, right now everybody 23 who has a trade issue should be Canada I guess because 24 American services have a huge advantage over Canadian 25 services. StenoTran 2410 1 11300 COMMISSIONER WILSON: But we allowed 2 it. 3 11301 MR. MORRISSETTE: We have allowed it, 4 sure, but there is no problem in correcting to a 5 certain extent. We are not talking here about a 37 per 6 cent of revenues programming commitment; what we are 7 talking about is making avails in Canada available to 8 promote Canadian programming, which is in the Canadian 9 interest, and it really should be at no cost to them 10 because my expectation would be that they would not 11 gear up and organize a sales force to sell advertising 12 in Canada. What they are talking about is spill type 13 of advertising. 14 11302 So, theoretically, the cost should be 15 negligible, if any, and indirectly it would contribute 16 significantly to enhancing and promoting Canadian 17 programming. 18 11303 So correcting a situation like that, 19 which is unbalanced in their favour, seems to me that 20 that should be something that could be explainable. 21 11304 COMMISSIONER WILSON: What about the 22 suggestion made by some of the broadcasters that we 23 should extract a contribution from them to Canadian 24 programming funds, for example? Or would this be the 25 alternative? StenoTran 2411 1 11305 MR. PERREAULT: That idea is 2 excellent, and it could be either/or. The Commission 3 could come up with a relation whereby every service 4 offered on cable or -- any BDU or SRDU in Canada has a 5 minimum contribution has a minimum contribution to the 6 Canadian system. It might be from the U.S. or 7 elsewhere. You have a minimum contribution to the 8 Canadian broadcasting system. It might be 2, 3, 5 per 9 cent, the Commission in its wisdom will decide what the 10 percentage is, but the U.S. services might decide in 11 the end that their local avails are worth 5 per cent 12 and let them go. And then the cable operators could 13 substitute them at the headend like they do now and 14 insert promotions for Canadian content. 15 11306 I think that both solutions are 16 acceptable. It is only a matter of where the 17 Commission is going to decide to put their regulation 18 to; is it a percentage or is it local avails? 19 11307 COMMISSIONER WILSON: Or if. 20 11308 MR. PERREAULT: Or if. 21 11309 COMMISSIONER WILSON: Or if we are 22 going to decide that. 23 11310 I would just like to continue on the 24 issue of advertising, only this time with respect to 25 the 12-minute advertising limit, because you do comment StenoTran 2412 1 on that in your submission as well. 2 11311 Some of the suggestions that have 3 been made are with respect to the notion of 4 deregulating the limit, and you state in paragraph 3.1 5 that deregulation, coupled with new specialty licences, 6 would increase the available inventory to the point of 7 disrupting the rules of the market. And we have 8 actually heard a similar kind of comment from the 9 advertising organizations who have appeared before us, 10 that it would just put too much inventory into the 11 market. 12 11312 What if the Commission were to 13 deregulate the 12-minute limit but require that the 14 additional two minutes, for example -- because most 15 people say that in the U.S. it is about 14 minutes an 16 hour. What if that additional two minutes were to be 17 used to promote Canadian programming? Would that 18 satisfy your concern? 19 11313 MR. MORRISSETTE: I guess, from our 20 company's point of view, that would raise our concerns. 21 Quite frankly, for us, having a precise limit of 12 22 minutes is one that we are very satisfied with and 23 prepared to live with. 24 11314 COMMISSIONER WILSON: Even though the 25 advertising organization showed us some statistics that StenoTran 2413 1 suggest that many broadcasters and specialty services 2 exceed that limit already? 3 11315 MR. MORRISSETTE: Well, I wish we 4 were one of them, but we are still growing our average 5 viewing or minutes sold per hour and we are still under 6 capacity, but we are hoping to push the capacity's 7 limits over the next five-year time frame. 8 11316 What becomes capacity on average -- 9 quite frankly, we are hoping to sell around nine, maybe 10 ten minutes on average; during peak times, we would 11 sell 12. Quite frankly, if we went beyond 12, I think 12 we would be disrupting the quality of our programming. 13 So we would self-regulate ourselves because it would be 14 short-term gain for long-term pain. Our viewer levels 15 would suffer. 16 11317 So, in our own case, having a 12- 17 minute limit gives us the flexibility to manage that, 18 and we know that it would not be good broadcasting for 19 our own service to go beyond 12. 20 11318 COMMISSIONER WILSON: You would drive 21 the viewers away out of frustration. 22 11319 MR. MORRISSETTE: Uh-huh. 23 11320 MR. PERREAULT: Also, we have to take 24 into consideration the advent of new media. We are 25 going to talk about this later in the fall, but we have StenoTran 2414 1 to take into consideration that in the U.S., for 2 example, where the Internet penetration is much higher 3 in the household, now advertising sold over Internet is 4 a business of close to $800 million a year and it is 5 growing very, very rapidly. Therefore, when Internet 6 penetration is going to go up in Canada, we can imagine 7 that advertising is also going to flow in that new 8 medium. 9 11321 If we have more inventory in 10 television, new media opening on the other side, then 11 the pie is not getting larger, but the slices are going 12 to very, very small for each licensee. Therefore, I 13 don't think at this stage it would be wise to augment 14 the number of minutes available because in the near 15 future I think that the Internet is going to take a lot 16 of money out of the advertising business. 17 11322 COMMISSIONER WILSON: Thank you. 18 11323 With respect to this advertising, one 19 of the suggestions that you make is that more 20 flexibility could be granted with respect to local and 21 regional sales of advertising to certain specialized 22 broadcasters transmitting live programs from certain 23 regions, and you say that these broadcasters could be 24 granted a certain number of minutes of regional and 25 local advertising airtime within the 12 minutes StenoTran 2415 1 provided by regulations. 2 11324 I wonder if you could just elaborate 3 on this proposal a little bit. I am not sure that I 4 understand exactly what you mean. 5 11325 MR. MORRISSETTE: Again, this relates 6 to one of the unique features of our network. We 7 operate a national satellite service, distributed by 8 cable, distributed by DTH and MMDS, but in the largest 9 urban centres we operate sub-networks that are 10 distributed by fibre to the cable headends in that 11 market area. 12 11326 COMMISSIONER WILSON: And that's how 13 you make everything location-specific. 14 11327 MR. MORRISSETTE: Well, that's part 15 of it. 16 11328 COMMISSIONER WILSON: Part of it. 17 11329 MR. MORRISSETTE: What we do is, in 18 our prime times, which tend to be the morning -- again, 19 the prime time for television is at night, but our 20 prime time is in the morning, weekend mornings 21 particularly -- 22 11330 COMMISSIONER WILSON: Maybe that's 23 when you will schedule some of that drama that John 24 Cassiday was talking about. 25 11331 MR. MORRISSETTE: Or some of the StenoTran 2416 1 youth-oriented weather on Saturday mornings. 2 11332 So when we operate these sub- 3 networks, the rest -- they operate in Montreal and 4 Toronto currently, and we are hoping to expand that 5 into other markets. In those local markets we go off 6 the national feed and the national feed is serving the 7 remainder of the country. 8 11333 For us to operate this sub-network 9 requires to deal with facilities and a stand-alone 10 broadcast operation often involving as many as 10 staff 11 with reporters on the street and traffic coverage and 12 all kinds of local activity coverage, and our show 13 becomes very local. That's with a major investment on 14 our part. 15 11334 It is interesting that -- 16 11335 COMMISSIONER WILSON: Sorry, did you 17 just say you do traffic coverage? 18 11336 MR. MORRISSETTE: Uh-huh. 19 11337 COMMISSIONER WILSON: Okay. 20 11338 MR. MORRISSETTE: Because it is very 21 weather related; whenever it rains in any major centre, 22 the impact on just traffic circulation is huge, as it 23 is with road conditions in wintertime. 24 11339 COMMISSIONER WILSON: That happened 25 yesterday. StenoTran 2417 1 11340 MR. MORRISSETTE: Uh-huh. 2 11341 Anyway, I guess, to make a long story 3 short, given the nature of our major investments in 4 local programming, in sub-network programming, we 5 believe that it is warranted, during those time periods 6 when we are broadcasting live with local operations, 7 that consideration be given to a regional type of 8 advertising opportunity. 9 1220 10 11342 COMMISSIONER WILSON: The last 11 question I want to ask you with respect to your 12 submission has to do with Canadian programming 13 expenditures. You talk about $34 million that you 14 spent on programming over the last four years. 15 11343 What percentage of this would have 16 been on producing weather reports, the ones that are 17 done in-studio versus the interstitials, which are 18 often done in other locations? 19 11344 MR. MORRISSETTE: I don't have the 20 precise numbers at hand. 21 11345 Our programming costs are made up of 22 many different categories. Just preparing the weather 23 content, we have 34 meteorologists on staff, who 24 basically do two things: first, we have a group of 25 them who do forecasting; secondly, we have a group of StenoTran 2418 1 them who develop new meterological content for the 2 future to create new content. 3 11346 In effect, those costs fall into our 4 programming costs; our on-the-air live programming, 5 where we have the people at the keywall or the news 6 anchors. All that qualifies. 7 11347 Then we have our people out in the 8 field, the news bureaus as well. 9 11348 In addition, we commission and 10 produce ourselves, but very often in conjunction with 11 independent producers, a number of features; whether it 12 is on health, gardening, travel. It could be many 13 different types of categories, as well; road tips, for 14 example, in terms of different road conditions. 15 11349 These features basically we inventory 16 and we replay over a period of time. 17 11350 I hate to venture a guess. But my 18 sense is it would be probably less than 5 percent of 19 our total Canadian programming costs every year for 20 those features, because so much of what we do is live. 21 11351 COMMISSIONER WILSON: I am trying to 22 find out a little bit more about The Weather Network 23 and how you operate. 24 11352 Do you produce the interstitials in- 25 house or do you -- StenoTran 2419 1 11353 Do you have any relationships at all 2 with the independent production community, for example? 3 11354 MR. MORRISSETTE: Both. We produce 4 features in many different regions of the country in 5 cooperation with independent producers, and we have our 6 own in-house production team that will go and organize 7 shoots on different subjects. 8 11355 We do both. That has just been -- 9 11356 As a national service, we obviously 10 want to reflect all regions in the country. That is 11 why we have bureaus in Halifax, Montreal, Toronto, the 12 Prairies and B.C. Oftentimes we work with them to go 13 out and do interviews and cover special events or 14 features. 15 11357 We are always working to have 16 features or news reporting that covers every area of 17 the country. 18 11358 COMMISSIONER WILSON: I want to ask 19 you about a couple of things you said in your oral 20 submission. 21 11359 The first one is your suggestion that 22 the Commission create: 23 "...mechanisms whereby 24 investments in technology that 25 are directly related to the StenoTran 2420 1 creation of on-air content 2 should be included as part of 3 the Canadian Programming 4 commitments." 5 11360 And you go on to say that: 6 "We do not refer here to editing 7 facilities, cameras or other 8 'conventional' production tools, 9 but rather new and innovative 10 technologies that will enable 11 the creation and dissemination 12 of Canadian content in the 13 emerging PC TV environment." 14 11361 How do you make the argument that you 15 should be able to qualify for Canadian content and 16 things like non-linear editing systems cannot? 17 11362 MR. MORRISSETTE: A non-linear 18 editing system is part of our day-to-day studio 19 operation. Whereas when we spend a few million dollars 20 up-front, and ongoing capital costs over time, to 21 create one of the most advanced weather forecasting 22 systems in the world which will produce our content at 23 a very low cost on an ongoing basis thereafter, all of 24 our costs are not on the operating side; they are in 25 the up-front software and hardware and technology StenoTran 2421 1 development, which will enable us to have this content 2 for the long term. 3 11363 That gets recognized in our capital 4 expenditures program every year, but not in our 5 Canadian programming numbers. 6 11364 COMMISSIONER WILSON: If your 7 Canadian content is 100 percent, then why do you need 8 that to count in your Canadian -- 9 11365 MR. MORRISSETTE: It is just that it 10 is excluded and it is an anomaly. For us, it is like 11 buying a show, and you amortize the rights over a 12 period of time. But in our case, the hardware and the 13 software that we develop gets amortized not in the 14 programming category. It gets amortized with our other 15 fixed assets. 16 11366 It seems to me that those kinds of 17 expenditures, which are directly tied to our own 18 Canadian content, should be recognized. 19 11367 We applied a number of years ago 20 under the Scientific R&D Tax Credit Program. I think 21 we had something like $8 million for items which were 22 patented proprietary technology. Because of abuses for 23 many of the applications -- the financial sector were 24 notorious for submitting very large amounts for these 25 credits -- the Federal Government came along and StenoTran 2422 1 changed the rules. 2 11368 What happened was that none of these 3 items -- and I am talking about unique -- nobody has it 4 -- patented technology. They said it was not 5 scientific enough under their new rules. Well, they 6 have changed the rules. 7 11369 At the end of the day, we didn't even 8 get our $2 million or $3 million in tax credits back. 9 11370 We are in a very unusual situation, 10 as an information service as opposed to an 11 entertainment service that incurs a different kind of 12 model of costs. As a very different situation, to a 13 certain extent I think there is a certain recognition 14 of certain categories which are totally justifiable and 15 logical. There should be enough flexibility to 16 recognize them. 17 11371 COMMISSIONER WILSON: In reading 18 everything you have done in terms of developing the 19 technology that you use for the channel, you are to be 20 commended for what you have accomplished there. 21 11372 Some people might say that what you 22 have done is you have developed technology which allows 23 you to run your channel more efficiently and thereby 24 earn greater profits. So that is just a cost of doing 25 business. StenoTran 2423 1 11373 I am having trouble figuring out why 2 it should count. I am not saying that I disagree that 3 it should not count for something somewhere. But I am 4 just not sure I understand why it should count as 5 Canadian content programming expenditures -- especially 6 when your content is 100 percent Canadian already. And 7 that is not going to change. 8 11374 MR. MORRISSETTE: But the content 9 that you see on the air is directly linked to the 10 specific capital projects, not to create an environment 11 or a studio to broadcast that Canadian content. It is 12 directly tied into software and specific tools that 13 produce this content on a daily basis. 14 11375 A lot of our Canadian content is 15 data. When you develop a brand new software system to 16 operate that data, which is our content, it is a real 17 tie-in that it is part of the content. Because it 18 happens to be a capital cost -- because that is the 19 nature of our business -- does not mean that it should 20 not qualify as Canadian content. 21 11376 I am not talking about a camera. I 22 am not talking about a new server for our digital 23 broadcast studio. I am talking about a half million 24 dollar software development to provide efficient road 25 condition reports to the Canadian public every day of StenoTran 2424 1 the winter. 2 11377 It is just a natural extension of 3 what we do every day. 4 11378 COMMISSIONER WILSON: I am going to 5 think about that for a bit. I will give that some 6 thought. 7 11379 MR. MORRISSETTE: Hopefully, a long 8 "bit". 9 11380 COMMISSIONER WILSON: Or maybe not 10 too long. 11 11381 One of the things you said this 12 morning was that commitments for Canadian content 13 should be calculated on expenditures only. 14 11382 MR. MORRISSETTE: That is our -- 15 11383 COMMISSIONER WILSON: As a specialty 16 service. 17 11384 MR. MORRISSETTE: We were referring 18 to a specialty service environment. 19 11385 COMMISSIONER WILSON: I wondered if 20 you were trying to cast the net a little wider than 21 that and suggest that everybody's be calculated on that 22 basis. 23 11386 MR. MORRISSETTE: No. Obviously, 24 conventional broadcasters have a different economic 25 model. StenoTran 2425 1 11387 The bottom line in our case is that 2 it is 37 percent of prior year's revenues. When we 3 acquired The Weather Network five years ago, we had 4 about 130 employees. Today in our weather business, we 5 have 300 people. Some of it has been over and above 6 investment spending for the future. 7 11388 A major part of our growth in 8 resources has been because of this 37 percent formula. 9 It works. We have been fortunate to grow our revenues 10 every year. We investment spend more, which makes us 11 better, grows our audience, grows our advertising. We 12 spend more and invest more. 13 11389 I guess these formulas could always 14 work negatively in reverse. But right now, what we 15 have is a model that enables us to constantly 16 investment spend in what our business is all about, 17 which is programming and meeting the needs of the 18 public better than anybody else. 19 11390 COMMISSIONER WILSON: I am really 20 glad that I asked that question, because while you were 21 answering that question it suddenly twigged to me that 22 you have a 30 percent expenditure requirement and the 23 result of that is 100 percent Canadian content on the 24 air. But you want to be able to include your R&D costs 25 in that 37 percent. StenoTran 2426 1 11391 MR. MORRISSETTE: That is correct. 2 11392 COMMISSIONER WILSON: This is my last 3 question. 4 11393 In one of the final points that you 5 make in your submission, you say: 6 "Attentively monitor 7 overextension of licence 8 conditions among the various 9 licensees in order to prevent 10 competitive situations from 11 developing without the 12 Commission's approval." 13 11394 Actually, I had to go to our Chair 14 and I said: "What is this?" 15 11395 And then when you were talking this 16 morning about live coverage of the hurricanes and 17 traffic coverage, I thought to myself: Do you ever get 18 any -- 19 11396 I am not suggesting that that is an 20 over-extension of your licence conditions. 21 11397 But do you ever get any complaints 22 from news channels about the fact that you are doing 23 things on the channel that are maybe on the edge of 24 being weather related? 25 11398 MR. MORRISSETTE: Weather related is StenoTran 2427 1 a broad term. A tremendous number of areas are 2 impacted by weather. 3 11399 I think covering a hurricane in the 4 southeast is pretty well 100 percent in our mandate. 5 11400 COMMISSIONER WILSON: It is 100 6 percent weather; there is no doubt about that. But it 7 is also news. 8 11401 MR. MORRISSETTE: Absolutely. 9 11402 MR. PERREAULT: Mind you, we do 10 cooperate with our news undertaking. For example, with 11 the last hurricane in Florida, in Montreal with 12 MétéoMedia we are in conversation with RDI to decide 13 how are we going to do this jointly. 14 11403 COMMISSIONER WILSON: And you also 15 provide weather for N-1. Correct? 16 11404 MR. PERREAULT: Yes. So there is not 17 much conflict there with other broadcasters in terms of 18 severe weather coverage, because very often we do 19 cooperate. And we end up saving a bunch of money, 20 because 12 hours before we made the decision to go, one 21 of our senior meteorologists said to us: "It is going 22 to miss Key West and it is going to go to Louisiana." 23 11405 So we called back our colleagues and 24 said: "Forget it." 25 11406 COMMISSIONER WILSON: You should have StenoTran 2428 1 phoned me, because my sister lives in Louisiana. I 2 would have like to have known that. 3 11407 MR. PERREAULT: We have great 4 cooperation with other broadcasters. 5 11408 COMMISSIONER WILSON: What are you 6 talking about here, about the over-extension of licence 7 conditions? 8 11409 MR. MORRISSETTE: Just to conclude on 9 the other matter, for us, covering weather news and 10 environmental news as well -- because it is tied in, 11 air quality, earthquakes and all those things -- never 12 have I considered for a nanosecond that it was not part 13 of our mandate. It is very clearly part of our 14 mandate. 15 11410 Weather-related information, as I 16 say, is very broad: travel condition, ski conditions, 17 marine conditions. All these are affected by weather. 18 11411 Everything we do is weather related, 19 and we pay very close attention to that. 20 11412 COMMISSIONER WILSON: Is this a more 21 general comment again about the whole area of 22 specialties? 23 11413 MR. MORRISSETTE: I guess what it 24 comes down to is the mandate of several other services, 25 and what have you. For instance, more and more StenoTran 2429 1 community channels across Canada in our prime time 2 might be covering weather and traffic conditions, and 3 things along these lines. 4 11414 COMMISSIONER WILSON: They are not 5 licensed, though. 6 11415 MR. MORRISSETTE: No. But it 7 fragments audience to a certain degree. That means 8 that it reduces our audience levels and our ability to 9 generate advertising revenues. 10 11416 What it comes down to is if you have 11 a national or a regional all-news service that is 12 licensed by the Commission, and it has been reviewed 13 and we would have had an opportunity to state our 14 comments -- 15 11417 COMMISSIONER WILSON: So Pulse 24, 16 for example, would be another channel that would affect 17 your market share. 18 11418 MR. MORRISSETTE: Yes. But they have 19 been fully licensed and mandated to do that kind of 20 programming. 21 11419 What it comes down to is if a 22 specialty service that is in a completely different 23 genre and happens to start doing a lot of weather 24 reporting, we would be concerned about that. 25 11420 COMMISSIONER WILSON: Is there one StenoTran 2430 1 out there? 2 11421 MR. MORRISSETTE: No. But there have 3 been a number of community channel services who have 4 identified this as an opportunity to better serve their 5 local market. That is a direct impact on us. 6 11422 COMMISSIONER WILSON: Those are all 7 of my questions. Thank you very much. 8 11423 LA PRÉSIDENTE: Merci, Monsieur 9 Morrissette et Monsieur Perreault. 10 11424 MR. MORRISSETTE: Thank you. 11 11425 LA PRÉSIDENTE: Nous allons reprendre 12 à une heure et demie. 13 11426 We will be back at 1:30, at which 14 time we will hear Telefilm, followed by Writers Guild. 15 And then we will hear the CTCPF in lieu of the Conseil 16 Provincial du Secteur des Communications, who will 17 appear much later during the process. 18 11427 After that, we will hear from the 19 Writers Union and SARDeC. 20 11428 We will return at 1:30 with Telefilm; 21 à une heure et demie avec Téléfilm. 22 --- Luncheon recess at / Suspension à 1235 23 --- Upon resuming at / Reprise à 1330 24 11429 THE CHAIRPERSON: Good afternoon. 25 11430 Madam Secretary. StenoTran 2431 1 11431 MS BÉNARD: Thank you, Madam Chair. 2 11432 The next presentation will be by 3 Telefilm Canada, and I would invite Mr. LaPierre to 4 invite his colleagues. 5 PRESENTATION / PRÉSENTATION 6 11433 MR. LaPIERRE: Good afternoon -- 7 11434 Me BLAIS: Monsieur LaPierre, votre 8 micro, s'il vous plaît. 9 11435 M. LaPIERRE: Qu'est-ce que je fais? 10 11436 Me BLAIS: Pesez sur le petit bouton. 11 11437 M. MACEROLA: Pour quelqu'un qui a 12 fait de la télévision durant 15 ans... 13 11438 M. LaPIERRE: I never had to push a 14 button. Somebody else did that. 15 11439 THE CHAIRPERSON: I was just about to 16 say you have come down in the world. 17 11440 MR. LaPIERRE: It's a lateral move, 18 madam. 19 11441 Can I start again, please. 20 11442 Good afternoon, Madam Chairperson, 21 CRTC Commissioners, ladies and gentlemen. 22 11443 I am honoured to be here today in my 23 new capacity as Chairman of Telefilm Canada. With me 24 today is Mr. François Macerola, Executive Director of 25 Telefilm Canada. To my left is Madam Suzan Ayscouth StenoTran 2432 1 who is the Director of Communications. Next to her, 2 Mr. Guy De Repentigny who is the directeur de politique 3 and planification et recherche, and Madam Maria De 4 Rosa, consultante. 5 11444 We are pleased to have an opportunity 6 to participate in the Commission's deliberations on the 7 future of Canadian television. 8 11445 With the new millennium approaching, 9 a review of the policies and regulations which affect 10 Canadian television production and distribution is both 11 timely and necessary. The world of television has 12 undergone extraordinary change since the last review of 13 television by the CRTC and since the inception of 14 Telefilm's former Broadcast Fund in 1983. The Canadian 15 government has since recognized the importance of this 16 change by creating the Canadian Television Fund in 17 1996. 18 11446 A new vision and tangible commitments 19 are needed from all players if our airwaves are to 20 continue to have strong Canadian stories which resonate 21 a shared experience for Canada's linguistic and 22 culturally diverse audiences as well as have universal 23 appeal. And, as the Commission has rightfully noted, 24 implementing the public policy objectives of the 25 Broadcasting Act is fundamental to this review. StenoTran 2433 1 11447 As we said in our submission to the 2 Commission, Telefilm is participating in this review in 3 its capacity as a cultural investor in television, in 4 film and multimedia productions in accordance with 5 federal cultural public policy. 6 11448 We are an essential player in the 7 film and television industry, providing financing, 8 along with our sister program, the Licence Fee Program, 9 to virtually all the distinctively Canadian prime time 10 drama programming shown on television. 11 11449 Par le Programme de participation au 12 capital du Fonds canadien de télévision, Téléfilm 13 finance des émissions distinctement canadiennes et de 14 grande qualité, qui respectent les objectifs de la 15 politique nationale: en augmentant le contenu canadien 16 disponible pour le système canadien de radiodiffusion; 17 en rejoignant le public canadien aux heures de grande 18 écoute; en contribuant au développement industriel du 19 secteur de la production indépendante; en stimulant 20 l'exportation de biens culturels canadiens, dans ce 21 cas-ci des émissions de télévision; et en engendrant, 22 grâce à la récupération, des revenus dont bénéficie 23 tout le système canadien de radiodiffusion. 24 11450 Tous ces objectifs vont dans le sens 25 de la politique du gouvernement fédéral, dont le but en StenoTran 2434 1 matière de télévision est de s'assurer que les 2 Canadiens ont accès aux moyens d'expression canadiens 3 et à nos instruments de diffusion communs. Et, tout 4 comme d'autres intervenants, nous sommes convaincus que 5 les Canadiens regardent des émissions canadiennes de 6 grande qualité et qu'ils continueront de le faire. 7 D'ailleurs, le sondage du CRTC révèle, ce qui est fort 8 intéressant, que plus des deux tiers des répondants 9 voudraient qu'il y ait davantage d'émissions reposant 10 sur des histoires canadiennes. 11 11451 Le Canada est un immense pays mais sa 12 population est peu nombreuse, surtout quand on tient 13 compte de notre dualité linguistique et de notre 14 diversité culturelle. Téléfilm soutient que sans les 15 politiques, les règlements, le financement et les 16 autres incitatifs publics, il serait encore impossible 17 de financer, de produire et de diffuser des émissions 18 de catégories sous-représentées. Nous croyons que la 19 production d'émissions distinctement canadiennes et de 20 grande qualité doit demeurer une priorité nationale du 21 gouvernement fédéral. Nous croyons également, Madame 22 la Présidente, que le financement public de ces 23 émissions par le biais du Fonds canadien de télévision 24 devrait devenir permanent. 25 11452 If you will allow me, Madam Chairman, StenoTran 2435 1 a personal word. Thirty-five years ago I began this 2 journey to Canadian television. At that time I dreamt 3 that my children would have access to the stories of 4 their country, told to them by the voices of their 5 country, so that they would grow up in full possession 6 of the dream that is Canada. Now, 35 years later, at 7 the beginning of my seventh decade, I dream of this for 8 my grandchildren and, quite frankly, Madam Chairman, I 9 don't give a damn how much it costs. 10 11453 Mr. Macerola. 11 11454 THE CHAIRPERSON: I know that Paige 12 wouldn't like to hear you swear like this. 13 11455 MR. LaPIERRE: Madam, Paige has 14 already heard it. I read it to her last night. 15 11456 M. MARCEROLA: Ça va être difficile 16 pour moi de revenir dans la quotidienneté de Téléfilm 17 Canada. 18 11457 Telefilm invests through the Equity 19 Investment Program of the Canadian Fund only in those 20 television productions which meet the objectives of 21 cultural public policy. This approach ensures that 22 productions maximize Canadian content, maximize 23 exposure to audiences within Canada and abroad and 24 brings a return on investment which is reinvested as 25 additional financing of high quality Canadian StenoTran 2436 1 programming. 2 11458 This approach is effective in that 3 Canadians are assured that high quality productions are 4 financed, that regional production and official 5 language minority production are fostered, that funds 6 are targeted to the categories of programming 7 under-represented on television, and that corporate 8 development of small and medium sized companies is 9 addressed. 10 11459 We are also the agency which 11 certifies Canada's official co-productions, supports 12 the promotion and marketing activities of the 13 independent television and film production industry and 14 the industry's participation at festivals and markets. 15 11460 Our investment provides a lever for 16 Canadian producers to seek other financing. In 17 1997-98, Telefilm invested approximately $100 million 18 in television production, which leveraged about $350 19 million worth of production. 20 11461 Nous sommes également ici en tant 21 qu'investisseurs dans le cinéma canadien. Au cours des 22 30 dernières années Téléfilm a investi dans quelque 700 23 longs métrages et a contribué à leur développement et à 24 leur production, et aussi à leur distribution et à leur 25 mise en marché. Téléfilm croit que l'essor du cinéma StenoTran 2437 1 canadien exige la collaboration et les efforts de 2 plusieurs partenaires, y compris les radiodiffuseurs. 3 11462 Comme nous l'avons écrit dans notre 4 mémoire, nous pensons que les radiodiffuseurs devraient 5 soutenir plus activement le long métrage canadien, 6 parce que la diffusion de nos films attire les 7 téléspectateurs et permet d'accroître les auditoires de 8 ces films. Nous espérons que le Conseil étudiera la 9 question et trouvera de nouvelles façons d'inciter les 10 radiodiffuseurs à devenir de véritables partenaires du 11 cinéma canadien. 12 11463 Nous croyons aussi qu'il faudrait 13 encourager les radiodiffuseurs à déclencher un nombre 14 adéquat de productions régionales et tenir compte, dans 15 leur programmation, des besoins des communautés 16 linguistiques en situation minoritaire et des 17 autochtones. D'autres intervenants ont d'ailleurs 18 abordé avec beaucoup de conviction cette question du 19 rôle des radiodiffuseurs et de la Société Radio-Canada/ 20 CBC envers la production régionale. 21 11464 Il est évident que la technologie 22 nous lancera de nouveaux défis au tournant du nouveau 23 millénaire. Il est vital que la nouvelle vision et le 24 cadre réglementaire qui découleront de ce contexte 25 aient comme résultat d'augmenter notre capacité de StenoTran 2438 1 raconter des histoires canadiennes. Il faut que les 2 productions canadiennes continuent d'être disponibles à 3 la télévision dans les deux langues officielles et que 4 les créateurs continuent d'avoir les moyens et les 5 outils pour produire ces émissions qui plaisent au 6 public d'ici et d'ailleurs. 7 11465 Pour sa part, Téléfilm Canada entend 8 faire en sorte que les Canadiens puissent plus 9 facilement raconter des histoires canadiennes. La 10 Société continuerait donc de financer des productions 11 distinctement canadiennes et de grande qualité, et 12 d'appuyer le secteur privé dans la création de telles 13 émissions. Pour ce faire, Téléfilm Canada croit que le 14 Fonds canadien de télévision doit demeurer un outil 15 essentiel, et devenir permanent. 16 11466 Merci. 17 11467 LA PRÉSIDENTE: Merci, messieurs. 18 11468 Madame Pennefather, s'il vous plaît. 19 11469 COMMISSIONER PENNEFATHER: Good 20 afternoon, ladies and gentlemen of Telefilm. It's a 21 great pleasure for me to engage in a discussion with 22 you on such important issues. 23 11470 You spoke of a new vision firstly and 24 you spoke of tangible commitments. In fact, this is 25 the line that I would like to follow in our discussion StenoTran 2439 1 this afternoon. 2 11471 J'aimerais d'abord commencer avec 3 quelques commentaires peut-être un peu plus détaillés 4 sur cette nouvelle vision et ensuite on passerait sur 5 les recommandations plus précises en ce qui concerne la 6 télévision canadienne. 7 11472 In fact, and I am citing your press 8 release, you have pointed to three important specific 9 issues that are of concern to you: that the Commission 10 should require broadcasters through conditions of 11 licence to trigger an appropriate amount of regional 12 production, incentives should be implemented to 13 encourage broadcasters to promote Canadian programming 14 and, third, broadcasters should be required to become 15 more active participants in the financing, exhibition 16 and marketing of Canadian feature films. 17 11473 I believe that this latter point, 18 although we touch on features, applies to your position 19 regarding a broadcaster's involvement in Canadian 20 programming writ large. I hope at the end of our 21 discussion we will have a clear idea of what you 22 propose would change what you probably consider is not 23 appropriate on their parts at the moment, how all the 24 players can move forward and what we at the CRTC should 25 be doing in that regard. StenoTran 2440 1 11474 Alors on commence. 2 11475 Monsieur LaPierre, vous avez 3 mentionné votre carrière dans la télévision. Si je me 4 souviens bien vous étiez, et êtes toujours, un 5 professeur, un historien, sur l'histoire du Canada. n 6 effet, vous étiez mon professeur à un certain moment 7 donné -- pour nous deux, c'est un peu longtemps -- et 8 vous avez parlé d'un rêve canadien, un rêve que vous 9 voulez passer à vos enfants et à leurs enfants. Est-ce 10 qu'on y arrive en ce moment? Est-ce qu'on est plus 11 loin qu'où est allés il y a quelques années? 12 11476 Quand vous dites que "I don't care 13 what it costs", what do you mean? Is it really not the 14 case, since you yourselves are talking about the 15 importance of financing Canadian programs, this is 16 indeed a major issue. How is vision not related to 17 cost? 18 11477 M. LaPIERRE: Madame, vous avez 19 toujours été une très bonne étudiante. 20 11478 COMMISSIONER PENNEFATHER: Thank you, 21 sir. Et je le suis toujours, alors je vous écoute. 22 11479 MR. LaPIERRE: When we began 23 television in the sixties -- the fifties but in the 24 sixties really -- I think that those who knew nothing 25 about it and who began it began with the understanding StenoTran 2441 1 in express and non-express -- you have to talk to Daryl 2 Dugan, you have to talk to McLean and you have to talk 3 to Patrick Watson and people like that -- that this 4 would change the world. 5 11480 It probably was the way, and we were 6 convinced that it was the way, that we could establish 7 the cultural unity, as it were, of this country and 8 that we could put people in communication with each 9 other and that we could look at the world, not through 10 the keyhole of the Americans but through the large 11 window that perhaps we would create through our 12 intelligence and our creativity. 13 11481 That I think was the function and the 14 battle that took place in the sixties and became, as we 15 went along, elaborated through the development of John 16 Bassett's and Stuart Griffiths' elaboration of the CTV 17 network and that kind of institution. Now it has grown 18 immensely, avec le résultat qu'essentiellement, à la 19 fin du 20e siècle, on peut réellement commencer à 20 réaliser le rêve qu'on peut avoir un pays qui se parle, 21 un pays qui s'entend, un pays qui est capable, avec ses 22 artistes, de se raconter les histoires de ce pays, et 23 ne pas avoir honte de cela. 24 11482 Consequently, I find myself now at 25 this position with Telefilm Canada with the moral StenoTran 2442 1 guardian, as it were really, of that kind of a dream. 2 I find myself at the beginning again of 35 years ago. 3 So the vision is present. How we realize it in this 4 complex reality that we find ourselves in is I think 5 the question. 6 11483 The vision is not dead. It is there. 7 It is present. I think Mr. Cassaday this morning also 8 expressed it in the process of his own presentation. 9 11484 Why did I say that I don't care what 10 it costs? I thought about that. You know, I am 11 profoundly sad that whenever somebody talks about 12 Canadian content, they talk about it negatively. They 13 say "Ah, the artists have all gone to the United States 14 of America." "We are a small country, we cannot afford 15 that." "It costs too much money." "We are not making 16 any money from it." 17 11485 The end result is that we have taken 18 Canadian content which is nothing else but the stories 19 about people and who we are. We have been able now to 20 negativize that to such a degree that we have created a 21 mindset: Canadian content is lousy and you only watch 22 it accidentally. Well, that's not true. 23 11486 When I say that it will cost what it 24 needs to cost, right, and that I don't care, this is a 25 very wealthy country. This is not a country of en voie StenoTran 2443 1 de développement. This is a very wealthy country. 2 Unless I am utterly and completely crazy, I have not 3 heard one single broadcaster or one single person 4 involved in this industry who says that I am going to 5 leave it because I don't make money in it. 6 11487 I never understood capitalism as to 7 say that people are in business to lose money, so 8 obviously somebody is making some money, right, because 9 they are staying in it. 10 11488 I would like people to understand 11 Canadian content in a positive way. Of course, it's 12 going to cost money. We all have to put something in 13 it. It's not all the fault of the broadcasters. It's 14 not all the fault of the producers. It's the fault of 15 no one. We just have to decide what it is that we want 16 to do and put the resources in it. 17 11489 The resources demanded will be very 18 large, but I repeat to you, Madam, that this is a 19 wealthy country. The privilege to live in it, to work 20 in it and to make money in it has a price and we have 21 to pay that price. Otherwise we may as well forget it. 22 We may as well disband you and just forget it. 23 11490 COMMISSIONER PENNEFATHER: Thank you. 24 11491 Mr. Macerola, you also had a long 25 career in culture, communications, from many points of StenoTran 2444 1 view in this country. Following up on what Mr. 2 LaPierre has said, do you think we are still trying to 3 balance in terms of the dilemma and in terms of the 4 opportunity he has described and the imperative he has 5 described, two basic trends still. What we would call 6 commercial or industrial objectives, what we can afford 7 to do, and what we would call cultural objectives, and 8 if I paraphrase Mr. LaPierre correctly, what can we 9 afford not to do as Canadians. 10 11492 Est-ce que cette dichotomie est 11 toujours avec nous? Est-ce que c'est faux ou est-ce 12 que c'est réel? Est-ce que ça touche, même 13 aujourd'hui, aux fonds qu'on gère vis-à-vis la 14 programmation pour la télévision? 15 11493 M. MACEROLA: Il est bien évident que 16 la télévision est un secteur industriel qui a des 17 objectifs de nature tant commerciale que culturelle, 18 mais personnellement je n'ai jamais fait la différence 19 entre un produit culturel et un produit commercial. 20 11494 Quand j'entends certains 21 radiodiffuseurs faire une nuance entre les produits qui 22 devraient être faits pour le Canada, et plus ces 23 produits-là sont canadiens et moins ces produits-là 24 seront exportables, je m'inscris toujours en faux parce 25 que l'histoire a démontré que les produits qui sont les StenoTran 2445 1 plus rentables culturellement, tant au pays qu'à 2 l'étranger, ce sont des produits qui ont une très 3 grande densité culturelle. 4 11495 C'est bien évident qu'il y a des 5 mesures à prendre au niveau industriel et au niveau 6 commercial pour faire en sorte qu'éventuellement notre 7 imaginerie nationale reprenne la place qui lui revient 8 de droit sur nos écrans de télévision. Mais il y a 9 deux discours. Il y a un discours qui pourrait être 10 totalement culturel relié, naturellement, aux produits 11 dans lesquels le gouvernement canadien investit, et il 12 y a un autre discours qui pourrait éventuellement 13 comptabiliser la rentabilité commerciale d'un produit. 14 11496 Je crois que les deux discours ont 15 leur place, mais que trop souvent on s'est cachés 16 derrière le discours industriel et commercial pour 17 éviter de prendre des risques, pour éviter de 18 challenger la population canadienne et la population du 19 monde avec des produits de très grande densité, avec 20 des produits qui correspondent, avec des produits qui 21 ont un son. Dans le domaine de la musique, on a trouvé 22 le son canadien. On l'a trouvé aussi dans le domaine 23 de l'opéra. On l'a trouvé dans le domaine du théâtre, 24 et au niveau de la télévision et du cinéma, on est 25 encore à la recherche de ce son-là. StenoTran 2446 1 11497 Je pense que de faire la dichotomie 2 entre les deux approches, c'est une façon de 3 rationaliser très souvent une absence de volonté, une 4 absence d'imagination, et une absence de désir de 5 prendre des risques. 6 11498 CONSEILLÈRE PENNEFATHER: Merci. 7 11499 Je voulais, comme c'est évident, 8 avoir vos commentaires à vous deux là-dessus, parce que 9 vous êtes là en charge d'une institution culturelle 10 publique très importante au Canada. Je le mentionne 11 aussi parce que souvent dans nos discussions pendant 12 ces séances on entend et on reçoit toutes sortes de 13 définitions de qu'est-ce que c'est, un programme 14 canadien: basic Canadian, enhanced Canadian, super 15 Canadian -- I am not being facetious, but we are 16 looking at this question. 17 11500 La raison pour laquelle cette 18 définition est devant nous touche le point que vous 19 avez mentionné: jusqu'à quel point cette définition va 20 influencer les décisions du CRTC de réglementation de 21 financement? 22 11501 Je vois, par exemple -- et si j'ai 23 mal compris, vous pouvez m'expliquer -- que le Fonds 24 PPC, ou LFP en anglais, commence à revoir cette 25 question de définition canadienne. Alors c'est un peu StenoTran 2447 1 un exemple du point que vous avez soulevé concernant 2 les objectifs culturels, les objectifs dits plus 3 commerciaux. 4 11502 Est-ce que vous avez un commentaire 5 sur toute cette question de la définition d'un produit 6 canadien et où on s'en va avec ça, et qu'est-ce qu'on 7 devrait prendre comme, par exemple, définition 8 éclaircie afin de prendre les décisions nécessaires? 9 11503 M. MACEROLA: C'est-à-dire que, bon, 10 il y a toutes sortes de systèmes qui effectivement 11 qualifient le contenu canadien et le produit canadien. 12 Il y a un système de pointage. Éventuellement dans le 13 domaine des coproductions il y a un système de 14 dépenses, et caetera. 15 11504 Pour moi, ce qui est important, du 16 moins au niveau de Téléfilm Canada, en tant 17 qu'administrateur de la composante programmes de 18 participation au capital, c'est d'investir dans des 19 projets qui sont dans un premier temps les oeuvres de 20 l'imagination de Canadiens, qui ont été faites par des 21 techniciens et des artisans canadiens, qui sont 22 produites par des sociétés canadiennes et qui, enfin, 23 sont capables de confronter les Canadiens avec leur 24 réalité culturelle sur les écrans, tant de télévision 25 que les écrans de cinéma. StenoTran 2448 1 11505 La définition à Téléfilm Canada a 2 toujours été, ou la tendance a toujours été, d'essayer 3 d'être très profondément Canadiens. Je me rappelle 4 qu'à une certaine époque on se contentait d'un système 5 de points qui disait, bon, 6 points sur 10, c'est 6 canadien. Tranquillement on a commencé à hausser la 7 barre, et présentement je dois vous dire qu'à Téléfilm 8 Canada, comme administrateur toujours de la composante 9 du programme de participation au capital, environ 10 99,9 pour cent des projets dans lesquels on investit 11 sont des 10 sur 10. 12 11506 Je pense qu'il y a toutes sortes de 13 possibilités pour le producteur privé et pour le 14 radiodiffuseur, qu'il soit privé ou public. Il peut 15 s'orienter dans un type de production de nature plus 16 industrielle ou commerciale, entre guillemets, mais 17 quand arrive le temps d'avoir accès à des fonds, les 18 fonds du gouvernement canadien, que ce soit des fonds 19 qui sont donnés directement par le gouvernement 20 canadien ou par l'entremise d'agences comme Téléfilm 21 Canada ou d'autres, il faut à ce moment-là insister 22 pour que ces documents-là reflètent réellement notre 23 réalité. 24 11507 J'ai le bonheur de participer à 25 plusieurs panels ces temps-ci -- avec les commissions StenoTran 2449 1 mixtes, on rencontre beaucoup d'étrangers -- et on ne 2 perd pas beaucoup de temps en Allemagne, à titre 3 d'exemple, ou en France, pour savoir ce que c'est qu'un 4 produit français ou un produit allemand. Je pense 5 qu'ici à un certain moment donné on devrait se 6 satisfaire d'une définition, et cette définition-là 7 devrait être la plus simple possible. Ça devrait être 8 l'âme et l'histoire du pays. Ça devrait être la 9 réalité, ça devrait être notre imagerie nationale. 10 11508 Maintenant, il y a d'autres sortes de 11 productions. À ce moment-là, ces productions-là 12 peuvent se financer, soit ici au Canada avec d'autres 13 mesures fiscales de nature plus automatique, comme le 14 crédit d'impôt, et caetera, ou peuvent se financer par 15 l'entremise de coproductions. 16 1350 17 11509 COMMISSIONER PENNEFATHER: I think 18 what I am getting at, too, is, indeed, I am sure we 19 would all agree, but when you look at the suggestions 20 brought to us by several producers, by organizations, 21 one has to ask: Where are these definitional 22 suggestions leading? For example, the Council of 23 Canadians. In their mind, it would be very dangerous 24 to have a definition or a policy which was geared 25 towards an export strategy because that would affect StenoTran 2450 1 the capacity of Canadians to produce truly Canadian 2 products. 3 11510 Another example is various players 4 have come to us to suggest that if a truly 5 distinguished 10-out-of-10 Canadian product is run in 6 prime time, we have a 200 per cent credit. However, it 7 is possible that raising the bar like that would reduce 8 the amount of Canadian programming in prime time. 9 Therefore, it is of concern to me to understand how 10 this definitional approach finally works out in favour 11 of more Canadian programming in peak hours on Canadian 12 television. 13 11511 It would appear to me that those 14 definitions are very related to a result and that 15 result is either more material in prime time, more 16 expenditures on Canadian, but it's all driving towards 17 what is perhaps a commercial objective as well. That's 18 why I am asking you your advice and your counsel on how 19 we should approach the matter of definition of Canadian 20 programming. 21 11512 It's very clear in the requirements 22 currently what it should be to be Canadian and yet we 23 still have people coming to this table saying -- more 24 or less being cautious about the definitions of 25 children's programming, for example, because if StenoTran 2451 1 Canadian is Canadian locales, children's programming 2 would have a problem. 3 11513 So, this is the reason I am asking 4 you this question. It's not just as such, but what are 5 the implications? Where are we heading in terms of our 6 desire, all of us, to see more Canadian programming 7 available to more Canadian viewers? 8 11514 M. MACEROLA: Tantôt vous allez 9 entendre le Fonds canadien de télévision qui va vous 10 mentionner qu'il y a des mesures qui sont prises 11 présentement pour, comment je vous dirais bien, 12 apporter certaines flexibilités, mais il n'en demeure 13 pas moins que plus la définition d'un contenu va faire 14 en sorte que ce contenu-là va être canadien, de grande 15 qualité, et aussi accessible au public -- et là je 16 parle uniquement en fonction, naturellement, du 17 financement public des organismes comme le Fonds 18 canadien de télévision et de Téléfilm Canada -- plus 19 ces définitions vont être non pas restrictives, mais 20 concentrées autour d'un concept de contenu canadien. 21 Je pense que ça va amener les citoyens canadiens à 22 regarder plus la télévision, et je m'explique. 23 11515 Présentement, les gens sont 24 challengés très souvent par des productions qui ne sont 25 pas toujours de la meilleure qualité possible. StenoTran 2452 1 Parfois, les meilleurs émissions sont programmées à des 2 heures ou à des créneaux horaires où elles ne devraient 3 pas l'être. Parfois on s'embarricade de façon beaucoup 4 trop rigide dans la définition du prime time, sans 5 considérer qu'on s'adresse soit aux enfants ou soit aux 6 adolescents ou soit à d'autres catégories de citoyens. 7 11516 Plus les citoyens d'ici vont avoir 8 l'occasion, en période de grande écoute naturellement, 9 d'avoir accès à des produits canadiens de très belle 10 qualité, plus l'habitude de consommer des biens 11 culturels va se prendre. Et quand on regarde ce qui se 12 passe tant du côté anglais, avec l'approche de 13 canadianisation des ondes de CBC, quand on regarde du 14 côté français ce qui se passe, on peut rêver. 15 11517 On peut dire qu'éventuellement au 16 lieu d'avoir 32 pour cent de téléspectateurs, on 17 devrait en avoir 60, mais de façon réaliste ce sont des 18 décisions concrètes au niveau de la définition du 19 contenu, au niveau de l'implication des 20 radiodiffuseurs, au niveau de l'implication des 21 producteurs, au niveau de l'implication des organismes 22 publics comme Téléfilm Canada, qui ne peuvent plus se 23 permettre de jouer le jeu de certains producteurs qui 24 voudraient que, je ne sais pas, des productions de 25 nature, entre guillemets, très industrielle, de 6 sur StenoTran 2453 1 10, soient considérées non pas comme du contenu 2 canadien mais financées par des organismes publics. 3 C'est la nuance que je veux faire. 4 11518 La seule façon qu'on a, quant à moi, 5 que ce soit dans le domaine de la télévision, que ce 6 soit dans le domaine du long métrage, de faire en sorte 7 que l'espace ou le temps écran augmente, c'est en étant 8 très profondément canadiens. On a un prix à payer pour 9 cette télévision ici: c'est d'être très profondément 10 canadiens. C'est à ce prix-là que les Canadiens vont 11 s'y reconnaître et c'est à ce prix-là que les étrangers 12 vont acheter nos émissions de télévision. Et les 13 chiffres parlent d'eux-mêmes: "Le Déclin de l'empire 14 américain" et "Anne of Green Gables", deux immenses 15 succès au Canada, deux immenses succès à l'étranger. 16 11519 COMMISSIONER PENNEFATHER: In that 17 light, in the definition of "success", what is your 18 comment on the proposals that the CAB have made that 19 ultimately the definition of "success" in this country 20 is viewership and that that should be the ultimate goal 21 and the ultimate base for our policy in Canada? 22 11520 MR. LaPIERRE: Madam, of course, 23 audience is the thing. I understand that's the way 24 commercials are sold. You have to deliver an audience 25 and you have to deliver, therefore, the best possible StenoTran 2454 1 program in order to attract the audience that you want. 2 So, of course, viewership is necessary, but viewership 3 cannot be taken in isolation and in a vacuum. 4 11521 It is a living organism that lives 5 within a community of people. Consequently, Canadians 6 are accustomed to watching television. Even though 7 some of us may watch it 24 hours a day, most Canadians 8 watch television, I understand, after they come back 9 from work and most of us work from 9:00 to 5:00 10 everyday. 11 11522 So, consequently, it's to be able to 12 view viewership in its totality, but also when you 13 consider that it does not have a bearing on where you 14 put the program in the day -- therefore, at the end of 15 the month you have all the viewers that have watched 16 Canadian-made programs and Canadian content -- at the 17 end of the year you arrive with a certain number and 18 then the CRTC puts on a statement whereby you have to 19 increase this by such-and-such a number, et cetera, et 20 cetera, et cetera. 21 11523 With all due respect to the 22 broadcasters, I think it's an artificial instrument 23 because it seems to me that what we are talking about 24 is to be able to show Canadian programs when there are 25 the largest possible number of Canadians capable of StenoTran 2455 1 watching it and that can only be between the hours of 2 5:00 or 6:00 or 7:00 o'clock until 11:00 o'clock. If 3 it is true that Canadians go to bed with Peter 4 Mansbridge at 11:00 o'clock, then it seems obvious that 5 we have to be able to bear that mind. Why Canadians 6 would want to do that is beyond me, but that's another 7 matter. They ought to wait for Floyd to arrive on the 8 air -- or Lloyd Robertson, rather. 9 11524 It seems to me that what I am trying 10 to say here, Madam, is the day is divided by the 11 broadcaster dans sa grille horaire il fait des 12 distinctions. Il m'apparaît évident que, pour remplir 13 les contenus du contenu canadien, il va falloir que les 14 programmes canadiens puissent aussi servir cette grille 15 horaire. Le matin, ce n'est pas le soir. Le soir, on 16 ne met pas les mêmes programmes. So, I think that we 17 have to re-think seriously whether viewership is the 18 only criteria whereby we are going to bring the people. 19 11525 May I add one more thing, Madam, 20 about Canadian content while I may? You cannot have 21 Canadian content, if necessary, but not necessarily 22 Canadian content. You cannot do that. Canadian 23 content means, essentially, to me at least, and the 24 judgment of it is based on a simple question: How much 25 does it speak of Canada? That's the crux. StenoTran 2456 1 11526 In the process of answering the 2 question, you ask others: Is a story a Canadian one by 3 means that it can really reflect Canadian lives, touch 4 Canadian lives, enable us to get into the roots of 5 ourselves, be able to put us in communication with 6 other people to share a common experience, be able to 7 give us the kind of moral instruments to be able to 8 face the world and do the great things that we have to 9 do and that Sir Wilfred Laurier dreamed about? These 10 are the things to me that are of value. 11 11527 I say to people when I talk about 12 this that the aims of the Broadcasting Act in terms of 13 quality, which also means originality and diversity, 14 will be in the qualitative assessment of Canadian 15 content. For far too long we have assessed Canadian 16 content in a quantitative way. The day will come when 17 we have been able to devise the processes to do that, 18 to assess it in a qualitative way, because it isn't 19 Canadian content that we shall catch the conscience of 20 the king. 21 11528 It seems to me, therefore, that we 22 have to be very, very careful and the Canadian 23 Television Fund has arrived at some basic criteria of 24 Canadian content, which I'm sure that Mr. Stursberg and 25 Mr. Macerola and Mr. Toth will devise for you or tell StenoTran 2457 1 you later. 2 11529 MR. MACEROLA: Viewership is very, 3 very important, but coming back to the CAB proposal, I 4 personally believe that it is a noble objective. I 5 personally agree with that kind of objective, but it 6 will have at a certain point to be better defined. 7 11530 I don't think that it's worth 8 establishing a viewership increase objective by saying 9 we are going from 32 to 35 per cent. I think that we 10 should subdivide and be able at a certain point to 11 establish some viewership objectives according to the 12 genre, according to the under-represented categories, 13 and so on and so forth, and be able at a certain point 14 to evaluate at the end of the process why it didn't 15 succeed or why it did succeed. For me programming is 16 very important. If you program a particular Canadian 17 program against the most popular American ones, that's 18 another question. That, at a certain point, we will 19 have to address. 20 11531 COMMISSIONER PENNEFATHER: I think we 21 will come back to it later when we look at some of your 22 specific recommendations regarding the support the 23 broadcasters would give to Canadian programming 24 because, at a minimum, one of the points they have 25 raised is the requirement for greater flexibility in StenoTran 2458 1 terms of programming to the audience at an appropriate 2 time and supporting Canadian programming in that regard 3 by having greater flexibility, particularly in 4 scheduling requirements. So, we might want to come 5 back to that. 6 11532 J'aimerais toucher maintenant à la 7 différence entre le marché francophone et le marché 8 anglophone. Il va de soi qu'il y a une distinction 9 importante à prendre en considération. Certainement la 10 plupart des intervenants francophones ont mis l'accent 11 sur le caractère unique de ce marché et le besoin 12 d'établir un cadre réglementaire distinct qui 13 refléterait cette réalité. 14 11533 J'aimerais avoir vos commentaires sur 15 certaines recommandations et certainement l'approche 16 qui a été prise par certains de ces intervenants 17 francophones. À titre d'exemple, croyez-vous qu'il 18 serait utile de revoir la répartition dans les 19 différentes catégories de fonds du Programme de 20 participation au capital que vous gérez, qu'il soit 21 mieux adapté aux réalités du secteur de radiodiffusion 22 de langues française et anglaise, comme le propose le 23 Groupe Coscient? C'est la recommandation no 8. 24 11534 Dans ce cas, il est dit: 25 "Dans le cas d'émissions de StenoTran 2459 1 langue française, nous croyons 2 que cette priorité et cette 3 prépondérance devraient viser: 4 les "fictions lourdes" (incluant 5 séries et mini-séries 6 dramatiques, téléfilms et longs 7 métrages cinématographiques) et 8 les "téléromans plus"; les 9 émissions pour enfants (incluant 10 les films, les séries 11 dramatiques et d'animation) 12 ainsi que les autres types 13 d'émissions jeunesse; les 14 documentaires." 15 11535 L'APFTQ aussi avait suggéré -- je 16 pense que c'est une nouvelle approche aussi -- de 17 donner des crédits de 150 pour cent pour les fictions 18 lourdes et 125 pour cent pour les téléromans. Si j'ai 19 mal cité, on peut me corriger. 20 11536 C'est certainement des interventions 21 importantes pour le marché francophone, où il y a un 22 succès, où notre discussion sur le contenu canadien, la 23 présence du contenu canadien sur nos écrans, est 24 différente, ça va de soi, mais leur préoccupation est 25 certainement le financement de leur produit. StenoTran 2460 1 11537 Pouvez-vous faire un commentaire là- 2 dessus, s'il vous plaît. 3 11538 M. MACEROLA: Dans l'ensemble, je 4 pense qu'il faudrait que la réglementation tienne 5 compte de la réalité des deux marchés. Ça va de soi. 6 11539 Dans un premier temps, il y aurait 7 certainement à revoir le concept des catégories sous- 8 représentées en fonction du premier commentaire que je 9 viens de faire, à savoir, entre le marché français et 10 le marché anglais. Le marché est complètement 11 différent. Il existe Radio-Canada, il existe TQS, il 12 existe TVA, il existe aussi Télé-Québec, alors que du 13 côté anglophone c'est tout à fait différent. Vous avez 14 plusieurs réseaux; vous avez aussi plusieurs services 15 spécialisés. 16 11540 Je pense qu'il faudrait que les 17 politiques soient réellement définies en fonction de ce 18 marché-là, qui est un marché très particulier, un 19 marché qui produit de la télévision de très belle 20 qualité, un marché qui a un auditoire qui est beaucoup 21 plus captif que le Canada anglais, un marché qui 22 produit des documents qui sont difficilement 23 exportables, et par conséquent qui doit plus compter 24 sur l'investissement public dans son financement, et 25 enfin un marché qui pourrait éventuellement s'ouvrir StenoTran 2461 1 sur la réalité canadienne. Là, je m'explique. 2 11541 Je pense qu'il faudrait être capables 3 de faire en sorte que les émissions qui sont produites 4 au Québec soient vues du côté du Canada anglais et vice 5 versa, et ce, de façon beaucoup plus systématique. 6 Quand on parle de laisser le tout aux règles du jeux du 7 marché, je pense qu'il devrait y avoir une volonté plus 8 interventionniste à ce niveau-là, mais de là à répondre 9 à votre question, c'est oui. Oui, nous devons revoir 10 certaines procédures, méthodes, définitions, en 11 fonction de ce marché particulier. 12 11542 CONSEILLÈRE PENNEFATHER: Et vous 13 êtes d'accord aussi que ces crédits seront appliqués 14 seulement en ce qui concerne une production du secteur 15 indépendant? 16 11543 M. MACEROLA: Oui, absolument. 17 11544 CONSEILLÈRE PENNEFATHER: Maintenant, 18 je veux parler de certaines de vos recommandations 19 spécifiques, dont j'ai la copie en français. 20 11545 La production régionale, la 21 recommandation no 3 est la suivante: 22 "Le Conseil devrait exiger, par 23 des conditions de licence, que 24 les radiodiffuseurs déclenchent 25 un nombre convenable de StenoTran 2462 1 productions régionales." 2 11546 Pourriez-vous nous donner une 3 définition de la production régionale? Deuxièmement, 4 qu'est-ce que vous recommandez, en peut-être plus de 5 détail, que le CRTC devrait faire en ce sens-là? Et 6 vous pouvez aussi nous parler un peu de vos politiques 7 régionales et l'impact que ces nouvelles conditions de 8 licence pourraient avoir sur vos règlements et vos 9 objectifs existants. 10 11547 M. MACEROLA: Pour nous, la 11 définition d'une production régionale, ce n'est pas une 12 production qui est tournée à Saskatoon par une équipe 13 de Toronto ou de Montréal. Pour nous, il y a des 14 critères qui sont très importants. Dans un premier 15 temps, c'est l'implication créatrice des gens d'où la 16 production origine. Ça, c'est important. 17 Deuxièmement, le contrôle de la production; que le 18 producteur régional ait le contrôle de la production. 19 11548 En plus, il y a le phénomène de 20 l'exercice aussi des droits de distribution reliés à 21 cette production-là. On pense encore une fois que 22 c'est important que le producteur local conserve des 23 droits de distribution. Et finalement, on veut que ce 24 soit une émission qui reflète cette réalité-là, qui a 25 été pensée par des gens de ce milieu-là, et qui a été StenoTran 2463 1 faite aussi par des gens de ce milieu-là. Ça n'exclut 2 pas nécessairement la coproduction entre différentes 3 provinces et régions, mais ça, on pourra tantôt en 4 reparler. 5 11549 On a, d'un autre côté, établi un 6 certain nombre de mesures au niveau des productions 7 régionales. On a réduit les exigences au niveau de la 8 licence. On a réduit certaines autres exigences qu'on 9 peut avoir au niveau de l'implication des producteurs 10 et des distributeurs. 11 11550 Présentement ce qu'on aimerait c'est 12 que les diffuseurs qui opèrent à l'extérieur des grands 13 centres de Montréal et de Toronto considèrent les 14 autres endroits au pays comme étant des régions où ça 15 vaut la peine de faire en sorte qu'il y ait des 16 développements d'émissions de très belle qualité. 17 11551 CONSEILLÈRE PENNEFATHER: Mais vous 18 recommandez, je pense, les conditions de licence. Ça 19 veut dire peut-être un certain montant, certaines 20 dépenses. 21 11552 For the Fund -- je l'ai en anglais: 22 "Telefilm shall seek to 23 encourage regional production 24 and maintain appropriate 25 balance." StenoTran 2464 1 11553 Mais pas plus que ça. 2 11554 Si j'ai bien compris, est-ce que 3 c'est une enveloppe précise, ou est-ce que vous 4 recommandez quelque chose un peu plus spécifique pour 5 les producteurs et les télédiffuseurs? 6 11555 M. MACEROLA: C'est-à-dire qu'on 7 voudrait être capables d'avoir les outils qui nous 8 permettraient de réaliser notre mandat qui nous est 9 donné par le Gouvernement du Canada de faire en sorte 10 que la réalité culturelle télévisuelle du pays ne soit 11 pas uniquement définie à partir de Montréal et de 12 Toronto. Ça, c'est notre mandat. 13 11556 Partant de là, ce qu'on se dit est 14 que, à titre d'exemple, pour Radio-Canada, une 15 production régionale, c'est une production qui est 16 tournée à l'extérieur de Montréal et Toronto. Par 17 conséquent, très souvent vous avez des cars de 18 reportages de Radio-Canada qui se trouvent à Moncton, 19 et ça devient une production régionale. Mais 20 l'implication créatrice des gens du milieu est où? 21 11557 Au niveau du programme de 22 régionalisation de Téléfilm Canada, on n'a pas établi, 23 comment je vous dirais bien, d'enveloppe telle quelle, 24 mais on a établi des objectifs de dépenses, objectifs 25 de dépenses qui sont inter-transférables entre StenoTran 2465 1 différentes régions et qui sont, comment je dirais 2 bien, intimement liés à la population. 3 11558 Par conséquent, on essaie de se dire 4 que si dans les provinces de l'ouest il y a une 5 population de 35 pour cent d'habitants, on aimerait que 6 les investissements de Téléfilm Canada dans ces quatre 7 provinces là en particulier soient dans cet ordre de 8 grandeur là, pas au prix, naturellement, de produire ou 9 d'investir dans des projets qui n'ont pas la qualité 10 voulue pour être radiodiffusés. 11 11559 CONSEILLÈRE PENNEFATHER: Laissez-moi 12 demander si, par exemple, vous supportez l'idée de 13 CFTPA qu'il y a une formule de 10/10/10. Je suis 14 certaine que vous êtes au courant. 15 11560 M. MACEROLA: Oui. 16 11561 CONSEILLÈRE PENNEFATHER: Ou bien 17 Directors Guild, qui propose une autre formule, 7/7 et 18 7/11. Est-ce qu'à l'intérieur de ces 10 vous proposez 19 une proportion de productions régionales? Est-ce que 20 c'est comme ça que ça va marcher? 21 11562 M. MACEROLA: Moi, je pense qu'il 22 pourrait y avoir deux choses. Dans un premier temps, 23 on pourrait jouer sur la définition du prime time et 24 essayer d'élargir un peu pour permettre à certaines 25 émissions régionales, qui n'ont pas nécessairement StenoTran 2466 1 peut-être toute la qualité pour être diffusées entre 2 8 h 00 et 11 h 00, puissent l'être de 6 h 00 à 7 h 00, 3 quelque chose comme ça, dans un premier temps. 4 11563 Dans un deuxième temps, je pense que 5 les radiodiffuseurs devraient prendre des engagements 6 au niveau du déclenchement d'émissions de télévision 7 produites par des producteurs indépendants régionaux. 8 1415 9 11564 COMMISSIONER PENNEFATHER: It is 10 interesting. This question is also one that is either 11 the same as or different from what people call local 12 programming. 13 11565 When we went around the country and 14 talked to people about television, certainly their 15 concerns largely centred on the need for local 16 programming. 17 11566 Do you have any comments or 18 suggestions on not only how to address the need and 19 interests of the population and local programming, but 20 on what I have I assume heard, a dichotomy or a 21 difficulty in both supporting local programming and 22 expensive high-cost drama in prime time. 23 11567 I am talking about the private 24 conventional broadcasters. I would like to focus on 25 that aspect of television. StenoTran 2467 1 11568 Do you have any sense of how those 2 components can be balanced? 3 11569 MR. LaPIERRE: One of the worst 4 developments in Canadian broadcasting has been the 5 removal of local production and regional production, so 6 that the people who live in those communities have 7 absolutely no opportunity, except through news from 8 time to time, of speaking to themselves about 9 themselves and about the experiences in the process of 10 the storytelling of Canada. 11 11570 It seems to me, therefore, obvious 12 that that must be repaired. Without it being repaired, 13 the fulfilment of one of the requirements of the 14 Broadcasting Act insofar as programming is concerned, 15 which has to do with diversity, will not be fulfilled. 16 11571 Consequently, it is through the 17 regional and local producer -- and to me, they are the 18 same. It is very difficult now to talk about local 19 programming when in many localities there is no 20 television outlet whatsoever and no centres to do that. 21 I think we are talking about regional production. 22 11572 It is, to me, very sad that in 23 Vancouver, for instance, there is absolutely no 24 opportunity whatsoever for artists, actors, plays to 25 present themselves on the local and regional networks StenoTran 2468 1 that are being formed in those provinces from time to 2 time and also on the television station which serves 3 them. It seems to me abhorrent. 4 11573 Canada is a country of diversity. It 5 exists because of diversity, and it can never, never, 6 never, never erase its diversity because it will cease 7 to exist. 8 11574 Consequently, the attempt of the 9 broadcasting system to look at that diversity through 10 the keyhole of Toronto and Montreal -- and particularly 11 this is true of the French-speaking Canadians who live 12 outside of Montreal, outside of Quebec. 13 11575 I have lived as such and I continue 14 to do so. I must tell you, Madame, que c'est 15 absolument aberrant that we cannot speak as franco- 16 Ontarians to each other on the airwaves of our 17 province, of our area -- except in certain affairs 18 programs and broadcasting -- and that our plays and our 19 artistic creations have no voice because they don't 20 originate from Montreal. 21 11576 It is like saying to us: "All right, 22 we will hire you Canadians to do this program, but we 23 will think about it in Los Angeles. We will plan it in 24 Los Angeles but we will send it to you and you can do 25 it, because we want the tax credits." StenoTran 2469 1 11577 We have to put an end to that. How 2 do we go about doing that? I think this is through a 3 condition of licence. 4 11578 A condition of licence must be that 5 there must be local hours of programming -- if it is 6 not already there -- but that it must go beyond the 7 news and public affairs. It must be in the under- 8 represented categories. 9 11579 So in the final analysis, if the 10 purpose of the exercise is for Canadians to tell each 11 other stories, they must be also able to tell each 12 other stories in their own communities. And it has to 13 be a condition of licence. 14 11580 Of course it is going to cost money. 15 But that is the price. There is no other way out. 16 11581 M. MACEROLA: Présentement à Téléfilm 17 Canada nos investissements sont... je n'ai pas fait de 18 radio ni de télévision. Nos investissements sont de 19 l'ordre de 70 pour cent à Montréal et à Toronto. Je 20 pense qu'il faudrait améliorer la situation, et ce 21 n'est pas avec le charme du président du conseil 22 d'administration ou du directeur exécutif de Téléfilm 23 Canada qu'on va y réussir; c'est en ayant des 24 conditions qui sont attachées à l'octroi de licences de 25 la part du CRTC. StenoTran 2470 1 11582 On parle du 10/10/10, du 7/7/7. Il y 2 a toutes sortes de plans. L'APFTQ propose des licences 3 à 40 pour cent, et caetera. Ça, ce n'est pas ma 4 compétence, mais si on veut réellement que la 5 télévision d'ici reflète la réalité canadienne dans son 6 ensemble et qu'elle ne soit pas dépeinte uniquement de 7 Montréal et de Toronto, il va falloir prendre des 8 décisions difficiles et il va falloir être capables de 9 dire à certains diffuseurs privés et publics, incluant 10 Radio-Canada/CBC: "Vous allez devoir déclencher des 11 émissions ailleurs qu'à Montréal et à Toronto et vous 12 allez devoir revoir votre définition d'une production 13 régionale, ne pas la limiter uniquement aux nouvelles 14 et aux sports mais faire en sorte que ce soit 15 réellement une oeuvre qui dépeigne une réalité 16 culturelle, qui implique les talents locaux." 17 11583 CONSEILLÈRE PENNEFATHER: Merci. 18 Maintenant, on va faire la même chose et exiger que les 19 radiodiffuseurs participent plus activement au 20 financement et à l'exploitation et marketing... 21 marketing, c'est un mot français, ça? 22 11584 M. MACEROLA: Oui. 23 11585 CONSEILLÈRE PENNEFATHER: Merci... 24 donc à l'exploitation et au marketing des longs 25 métrages canadiens. En particulier, les StenoTran 2471 1 radiodiffuseurs devraient présenter plus de longs 2 métrages à la télévision, verser des droits de 3 diffusion plus élevés pour les longs métrages, investir 4 dans le financement de longs métrages et promouvoir les 5 longs métrages à la télévision. 6 11586 Pourriez-vous nous donner plus de 7 détails sur comment et quel est le cadre réglementaire 8 que vous proposez plus spécifiquement à cet égard? 9 11587 M. MACEROLA: Dans tous les pays, 10 produire du cinéma, c'est un effort collectif, un 11 effort collectif qui engage non seulement les 12 producteurs de longs métrages et les distributeurs de 13 longs métrages, mais aussi les radiodiffuseurs. Que ce 14 soit en France, que ce soit en Italie, que ce soit en 15 Allemagne, le cinéma national est subventionné de façon 16 importante par les diffuseurs nationaux. 17 11588 Par conséquent, on pense que, oui, 18 les diffuseurs privés et publics devraient 19 éventuellement être invités à participer à la mise sur 20 pied d'un fonds de production de longs métrages en y 21 injectant une portion de leurs revenus nets. Le modèle 22 pourrait rester à déterminer. 23 11589 Deuxièmement, je trouve indécent que 24 des diffuseurs achètent des oeuvres canadiennes de très 25 grande qualité à des prix qui sont complètement StenoTran 2472 1 ridicules en fonction du marché; et là je mets mon 2 chapeau d'ancien distributeur, où je devais me mettre à 3 genoux pour obtenir un 50 000 $ ou un 75 000 $ pour un 4 très grand film québécois canadien alors que le 5 collègue américain, c'était plutôt les sociétés de 6 radiodiffusion qui le priaient de leur vendre très 7 souvent des films de catégorie B. 8 11590 Je pense que les radiodiffuseurs 9 devraient aussi être invités à investir non pas 10 simplement au niveau de l'achat de droits mais au 11 niveau de l'achat d'équité dans les différentes 12 productions. 13 11591 Enfin, avec un mécanisme qui 14 permettrait de considérer, entre guillemets, comme 15 contenu canadien des moments de promotion et de 16 publicité qu'ils pourraient offrir gratuitement à la 17 communauté de production et de distribution du pays. 18 11592 Comment tout ça se fait? Ça se fait, 19 quant à moi, dans un cadre réglementaire, ça se fait 20 possiblement quand arrivent des grands renouvellements, 21 des grands chambardements dans le domaine de la 22 radiodiffusion. Comme conditions, il y a certainement 23 des conditions qui peuvent être posées par le CRTC, des 24 conditions qui sont intimement reliées à la survie de 25 notre cinématographie canadienne. StenoTran 2473 1 11593 Si les radiodiffuseurs publics et 2 privés ne jouent pas leur rôle de partenaires 3 privilégiés de la production et de la distribution de 4 longs métrages dans ce pays, on va continuer à vivoter, 5 on va continuer à produire une vingtaine de films par 6 année, et le cinéma va toujours continuer à être 7 l'enfant négligé du gouvernement. 8 11594 La télévision est très privilégiée. 9 Il y a une Loi sur la radiodiffusion, il y a le CRTC, 10 il y a des organismes qui font en sorte que la 11 télévision est au centre de la réflexion culturelle du 12 pays. Au niveau du long métrage, le long métrage a 13 toujours été mis de côté, négligé, sans aucun cadre 14 législatif et laissé seul face à la compétition des 15 Américains. Par conséquent, je pense que les 16 diffuseurs ont un rôle à jouer, et que le CRTC a un 17 rôle à jouer en posant un certain nombre de conditions. 18 11595 MR. LaPIERRE: One of the things that 19 has struck me since the beginning of these hearings has 20 been to try to find a culprit somewhere or to find 21 someone who should do more than others. 22 11596 The purpose of the exercise is 23 essentially a reconciliation of conflicting points of 24 views and of interest. It seems to me that if we are 25 going to put upon the broadcaster larger StenoTran 2474 1 responsibilities than he has now, make him pour more 2 and more of his hard-earned cash into these kinds of 3 programs, I think that the producers, the funding 4 agencies, everybody is going to have to accept that 5 there must be a quid pro quo. 6 11597 Therefore, when we say this about the 7 broadcasters, it is not pour les saigner à blanc, c'est 8 essentiellement pour leur dire que, if the purpose of 9 the exercise is for Canadians to hear their stories, 10 feature film is an important matter of that. And since 11 feature film has to be produced in Canada, they have to 12 be part of the process that does that. 13 11598 I have suggested before that the 14 contribution of the broadcasters could also be in kind. 15 We talk about promoting a star system in Canada. 16 11599 I find it rather odd that I was fired 17 because the CBC thought that both Patrick Watson and I 18 were becoming stars, in the 1960s -- and we were not to 19 have any stars. 20 11600 However, I am glad that 35 years 21 later, perhaps we are beginning to realize that I would 22 have made a very good star if I had had the opportunity 23 to do so. 24 11601 I am glad that we are coming back to 25 the star system in one way or another. We will not be StenoTran 2475 1 able to do that without the cooperation of the 2 broadcasters. So we have to think about these things 3 as we go along. 4 11602 COMMISSIONER PENNEFATHER: Do you 5 have now some practical ideas about how in fact that 6 star system and promotion can be accomplished? 7 11603 Here we can talk about features but 8 also about other programming. Many suggestions have 9 come to us, some of which have also, as in the CFPTA, 10 said that they should not only promote but that the 11 promotion effort should be included in their Canadian 12 programming expenses. 13 11604 Would you go that far? 14 11605 MR. LaPIERRE: If you want an 15 objective, give them what they want. If they want to 16 count that as part of Canadian content, I don't care, 17 as long as it is done. 18 11606 The objective is not that. The 19 objective essentially is to get the broadcaster, 20 whoever it is, to be able to assist and to contribute 21 to that kind of a process. 22 11607 COMMISSIONER PENNEFATHER: Why are 23 they not doing it now? Why do you need us to tell them 24 to do this? 25 11608 MR. LaPIERRE: I think that they are StenoTran 2476 1 not doing it now because -- 2 11609 In Quebec, I think it is natural that 3 the star system be developed, because we who speak 4 French in North America are very few and far between. 5 Consequently, we are surrounded by this massive star 6 system. 7 11610 Il nous faut nous donner des gens à 8 nous. Alors les gens à nous, ce sont les étoiles de 9 nos cinéma, les étoiles de notre télévision, les 10 auteurs, et caetera, et on veut connaître leur vie. 11 11611 That is what the star system means. 12 We have to see them to understand that. 13 11612 In the world of Canada that we call 14 English Canada -- an expression that I do not like. In 15 English speaking Canada there seems to be a tremendous 16 revulsion to doing that. 17 11613 Look at Paul Gross. It doesn't take 18 a genius marketer to take this magnificent man -- or 19 Madame Saulnier Entredos -- take these magnificent 20 creatures and make them a star in 24 hours; a well- 21 known name recognized across the country. 22 11614 Last year the Canadian Television 23 Fund, or its predecessor, brought to the hill the great 24 stars of our television in both French and English. 25 Members of Parliament, members of Cabinet, perhaps even StenoTran 2477 1 Chief Justices of the Supreme Court, vied with each 2 other to be able to get to know these people, because 3 they told them stories. They wanted that kind of 4 connection. We have to find that. 5 11615 We need publicity. We need presence. 6 We need a capacity to surround them through a bureau of 7 information of various kinds to distribute information 8 about them. And we have to show them. 9 11616 Monsieur Duranleau, when he became 10 Archbishop of Sherbrooke, he used to go around the city 11 in his carriage. He said: "Quand on a un cheval neuf, 12 il faut le montrer." 13 11617 It seems to me that there is some 14 validity to that. 15 1430 16 11618 M. MACEROLA: Juste pour répondre à 17 votre question concernant pourquoi on a besoin du 18 CRTC... parce que si le CRTC ne dicte pas des 19 conditiOns, ça ne se fera pas, tant au niveau de... 20 11619 COMMISSIONER PENNEFATHER: It is not 21 good business to promote good Canadian programming? 22 11620 M. MACEROLA: Vous savez aussi bien 23 que moi l'opinion que les gens ont du cinéma canadien. 24 Présentement, au niveau de la ministre Mme Copps, il y 25 a un comité de réflexion qui a été mis sur pied, mais StenoTran 2478 1 il faut changer les choses, il faut changer les 2 mentalités. 3 11621 La télévision, ça fait 30-35 ans 4 qu'on essaie de changer les mentalités, et ça 5 fonctionne maintenant. Il y a maintenant un star 6 system en télévision qui fonctionne. Par conséquent, 7 au niveau du cinéma, le cinéma a besoin de ce coup de 8 main là de la part du CRTC, parce que ce n'est pas 9 rentable. Ça va le devenir, mais très souvent des gens 10 qui sont dans le milieu ont des visions qui sont à très 11 court terme. Ce qui n'est pas rentable aujourd'hui 12 pourra peut-être ne pas le devenir demain, ou on perd 13 de l'argent sur la programmation canadienne. Vous avez 14 entendu ce discours-là, et il faudrait qu'on fasse de 15 l'argent sur chaque émission canadienne qu'on met en 16 ondes. 17 11622 Par conséquent, imaginez-vous quand 18 arrive le temps du long métrage, qu'est-ce que les 19 radiodiffuseurs exigent: l'impossible. 20 11623 COMMISSIONER PENNEFATHER: So in 21 order to involve broadcasters more consistently and 22 effectively in feature film, what kind of incentives 23 are you proposing? 24 11624 MR. MACEROLA: What kind of what? 25 11625 COMMISSIONER PENNEFATHER: StenoTran 2479 1 Incentives. -- 2 11626 M. MACEROLA: Quant à moi, ce n'est 3 pas à nous à les définir, dans un premier temps. 4 11627 CONSEILLÈRE PENNEFATHER: C'est à 5 nous? 6 11628 M. MACEROLA: Je pense que c'est à 7 vous, mais c'est certainement des incentives related to 8 the Canadian content, to Canadian expenses, and I guess 9 that's it. To be able to account for these expenses as 10 being, you know, Canadian programming expenses and to 11 account for the promo material as being Canadian 12 content. Maybe there are some other incentives, but I 13 am not the expert at that. 14 11629 COMMISSIONER PENNEFATHER: Well, it's 15 interesting because Madam Wylie asked this question 16 this morning. It's an example of the balancing act and 17 the choices. Let's take some of the existing methods. 18 11630 There are exhibition requirements and 19 there expenditure requirements currently. There are 20 also proposals on the table involving both, 10 and 10 21 for example, and time. 22 11631 Why do we need both? Would it not be 23 possible, as Madam Wylie was discussing this morning, 24 to have exhibition requirements on their own. Prime 25 time, you have to carry this material. You have to StenoTran 2480 1 draw audience to maintain your revenues. Therefore, 2 it's going to be the best. It will follow as night 3 follows day that you will have quality programming and 4 expenditures appropriately applied. 5 11632 What do you think of that? You have 6 proposed in your recommendations both to continue. In 7 fact, you are hinting that those increase by some 8 amount. You still feel it's important to have both. 9 Why is that? 10 11633 M. MACEROLA: Parce qu'on va toujours 11 avoir besoin d'un environnement "régulé" à l'intérieur 12 du secteur de la télévision, et que d'autre part je 13 pense qu'éventuellement on pourrait s'éloigner de 14 certaines réglementations; mais que pour l'instant le 15 système n'a pas encore fait ses preuves, et il doit 16 continuer à avoir à rendre des comptes au niveau non 17 simplement de l'accessibilité ou de la programmation, 18 mais aussi au niveau du montant des investissements en 19 productions canadiennes. 20 11634 COMMISSIONER PENNEFATHER: I think 21 this is recommendations 4 and 5 which also speak about 22 encouraging investment in production and encouraging 23 "les radiodiffuseurs à devenir des partenaires et 24 d'accroître l'accès des Canadiens aux émissions 25 canadiennes". StenoTran 2481 1 11635 This brings me to the question then. 2 We have spoken about marketing. We have spoken about 3 participation and we haven't really talked about 4 financing in that sense, participation. This has been 5 a question that has come up a lot in these hearings. 6 11636 It involves equity investment in 7 projects both for television and feature films and it 8 involves often broadcaster participation or broadcaster 9 to the production fund, to the EIP. 10 11637 It's my reading of your 11 recommendations that it remain that broadcasters do not 12 have access to this production fund, that it remains 13 solely accessible to the production sectors. Is this a 14 correct reading? 15 11638 MR. MACEROLA: What we are really 16 recommending is the establishment of a small task force 17 in able to be able to put some more thinking into that 18 question of broadcasters directly or through affiliated 19 production companies to access the equity component. 20 11639 COMMISSIONER PENNEFATHER: Why -- 21 11640 MR. MACEROLA: It's not a decision 22 that Telefilm Canada will make. I guess that it's a 23 decision that the Canadian government will have at a 24 certain point to make. 25 11641 We know that there will be some StenoTran 2482 1 effects on the independent private sector. On the 2 other hand, I don't know to which extent the 3 broadcasters are really interested in having access to 4 the equity component. They now have access to the 5 licence fee component. They take there only 2, 3 or 4 6 per cent. 7 11642 I personally believe that some more 8 thinking should be put into that dossier and a 9 recommendation made to the Canadian government. I 10 personally believe that at the end it's not Telefilm 11 Canada's decision or the Television Fund decision. 12 It's more a government decision. 13 11643 You know, we must be able to evaluate 14 the effect of that kind of decision of the overall 15 industrial environment. 16 11644 COMMISSIONER PENNEFATHER: But you 17 are proposing, and you don't have to comment further if 18 you don't wish, but you are proposing a task force 19 because, am I right, that you see this is an important 20 question and that there may be some solutions. 21 11645 In fact, we have had some suggestions 22 and maybe you would care to comment. Broadcaster 23 access to the equity investment program under certain 24 conditions, the Canadian Media Guild for example, 25 suggests a proportion of 10 to 15 per cent be set StenoTran 2483 1 aside. 2 11646 They also make a suggestion that 3 3 per cent of revenues obtained from the purchase of 4 foreign program be dedicated to this purpose. Do you 5 have any comment on those suggestions? 6 11647 MR. MACEROLA: You know, there are 7 god suggestions. For example, in Quebec now the 8 broadcasters have access to the tax credit. In return, 9 they invest into the establishment. They have invested 10 into the establishment of a feature film production. 11 11648 What I am trying to say is that this 12 decision has not been made by Telefilm Canada. This 13 decision has been made by the Canadian government when 14 it established the Broadcasting Fund. The objective 15 was to develop the independent private sector 16 production. 17 11649 I personally believe that without 18 having any kind of, you know, bias concerning the final 19 decision, I think it is worth spending some time on 20 that dossier, trying to find some new, imaginative 21 solutions. You know, before when you were a producer, 22 you were a producer for your entire life. The same 23 when you were a broadcaster. Now everything is 24 integrated. 25 11650 What I would like to be sure of is StenoTran 2484 1 that the procedures and the guidelines answer the needs 2 of the television milieu. I don't know what will be 3 the end result of that small task force, but at least 4 at a certain point at least we will have been able to 5 put some thinking into it and for Telefilm Canada to 6 tell the world that we are not the ones who have made 7 that decision. It's a Canadian government decision. 8 11651 COMMISSIONER PENNEFATHER: One 9 decision -- Sorry. 10 11652 MR. LaPIERRE: Do you mind? 11 11653 The bottom line for me on this 12 question is essentially the value that we attach to the 13 independent producer. If we begin to satellize 14 production around broadcasting agencies, we are going 15 to destroy or certainly weaken the Canadian 16 independents. 17 11654 To the degree that we weaken it, to 18 that degree we put in danger the entire edifice of 19 diversity which is, after all, one of the basis of the 20 Broadcasting Act. 21 11655 The bottom line for me in the study 22 that Mr. Macerola suggested which I agree with, because 23 there are so many questions that are unanswered, the 24 bottom line must be the continued present participation 25 of independents and the preservation of their StenoTran 2485 1 fundamental artistic rights of the Canadian Independent 2 Producers. 3 11656 Without that, I do not think that you 4 have diversity and that you will be able to tell 5 Canadians their own stories. 6 11657 MR. MACEROLA: The final objective 7 being if, let's say, there's a decision to allow the 8 broadcasters to have direct access, the final objective 9 must be to increase the quality of the Canadian 10 programming to increase the number of hours and to 11 increase accessibility. 12 11658 Is it the only way to do it or is it 13 the right way to do it? I really don't know. On the 14 other hand, we must take into account the fact that in 15 this country we have an independent production sector. 16 This production sector is very important. We must 17 protect it. 18 11659 COMMISSIONER PENNEFATHER: Yes. We 19 have had a number of comments from many parties to that 20 effect. It is an important balancing act. 21 11660 The reason I am pursuing some of 22 these points is just to help in getting a better 23 understanding of where this is leading because we are 24 in this process now, which is a very extensive one. 25 You have made several recommendations regarding StenoTran 2486 1 financial participation by broadcasters. 2 11661 The Equity Investment Program very 3 clearly says another component of this financing story 4 is that an applicant is ineligible for assistance from 5 the EIP if the proposed production is to be distributed 6 by a distribution company having an affiliation with a 7 broadcasters. 8 11662 This is another component and that's 9 a rule set by Telefilm. I was wondering if you could 10 comment on CTV's position and I quote: 11 "We have no interest in taking 12 away funds that are now reserved 13 for producers. However, it is 14 time to allow Canadian 15 broadcasters to be distribution 16 partners in the productions they 17 commission, just as broadcasters 18 in Great Britain, Australia and 19 the U.S. already are. We cannot 20 put in additional money unless 21 we significantly improve our 22 chances of recouping our 23 investment." (as read) 24 11663 Do they have a point? 25 11664 M. MACEROLA: Là-dessus, au niveau en StenoTran 2487 1 fin de compte des radiodiffuseurs qui voudraient être 2 distributeurs, en gros, là on ne parle plus de self- 3 dealing, on parle de fair dealing. 4 11665 C'est bien évident que les 5 distributeurs qui sont spécialisés dans le domaine de 6 la télévision, et surtout qui ont une composante ou une 7 expérience importante au niveau international, sont 8 rares dans ce pays, dans un premier temps. 9 11666 Dans un deuxième temps, il faudrait 10 aussi prendre en considération la position du 11 producteur qui se retrouve face à son radiodiffuseur et 12 qui non seulement investit de l'équité dans son projet, 13 achète des droits de diffusion, mais en plus de ça 14 achète tous les droits de distribution à travers le 15 monde. 16 11667 Par conséquent, il faudrait 17 possiblement qu'il y ait un rapprochement entre les 18 producteurs et les radiodiffuseurs à ce sujet-là, et il 19 faudrait que ce rapprochement-là tienne compte d'un 20 concept de fair dealing avec naturellement des 21 méthodes, des procédures qui feraient que ça pourrait 22 être des contrats séparés, et caetera, et caetera, mais 23 au-delà de tout ça, d'avoir un bureau, ou un 24 ombudsperson, qui pourrait éventuellement, comment je 25 dirais bien, analyser les... pas les plaintes, mais les StenoTran 2488 1 commentaires de certains producteurs qui pourraient se 2 sentir lésés. 3 11668 Par conséquent, au niveau de la 4 distribution, c'est une politique de Téléfilm Canada, 5 celle-là. Celle-là, je suis prêt à la changer. Je 6 veux aussi écouter les gens qui vont être affectés par 7 ce changement de politique là. Elle a été mise en 8 place éventuellement pour protéger, il y a une 9 vingtaine d'années ou une quinzaine d'années, un 10 secteur de production indépendant qui était faible par 11 rapport au secteur de radiodiffusion. 12 11669 L'équité. Il y a rien présentement 13 qui empêche un radiodiffuseur, malgré la rumeur et 14 malgré ce que j'ai entendu ici, d'acheter de l'équité 15 dans un projet. 16 11670 CONSEILLÈRE PENNEFATHER: Oui, ça, 17 c'est important. 18 11671 M. MACEROLA: À Téléfilm Canada on 19 mentionne toujours aux diffuseurs qui veulent acheter 20 de l'équité qu'ils sont les bienvenus. Maintenant il 21 ne faut pas cependant que cet argent d'équité là vienne 22 remplacer l'argent des droits de licences. Il faut que 23 ce soit de l'argent neuf, du nouvel argent, et qui doit 24 être récupéré comme n'importe quel autre investisseur 25 va récupérer sa mise. StenoTran 2489 1 11672 Toutes ces politiques là au niveau de 2 l'équité, au niveau de la distribution et au niveau 3 naturellement de l'accès doivent être, quant à moi, 4 revues, repensées, toujours en fonction des grands 5 ensembles qui ont été maintenant mis sur pied et qui 6 remplacent la petite maison de production et le petit 7 radiodiffuseur, mais en gardant en tête qu'il faut 8 absolument protéger dans ce pays un secteur de 9 production indépendant fort. 10 11673 CONSEILLÈRE PENNEFATHER: Vous avez 11 mentionné que maintenant en effet un télédiffuseur peut 12 investir. Est-ce qu'il y a des limites dans le régime 13 courant à cet investissement? 14 11674 M. MACEROLA: La seule limite qu'on 15 impose est qu'on veut que le copyright appartienne au 16 producteur. 17 11675 La seule règle au niveau de l'équité 18 est que le copyright appartienne au producteur privé. 19 Par conséquent, on limite l'investissement du 20 radiodiffuseur à moins de 50 pour cent, 49 pour cent. 21 11676 COMMISSIONER PENNEFATHER: The other 22 day CINAR and Nelvana were here. They did table with 23 us a formula. I wondered if you were aware of this and 24 you had comment. It is common perhaps in international 25 business as well that broadcasters can take an StenoTran 2490 1 ownership position in a production equivalent to 50 per 2 cent of the value of their investment over and above 3 licence fees after full recoupment. 4 11677 Is this a formula that you are 5 familiar with? 6 11678 M. MACEROLA: J'ai entendu parler de 7 la proposition de CINAR et Nelvana. C'est une 8 proposition qui est valable. Il faudrait naturellement 9 l'étudier. Ils limitent éventuellement leur 10 récupération au niveau des profits à 50 pour cent. 11 C'est valable. C'est à regarder, mais chaque cas est 12 négocié et discuté individuellement, et on peut très 13 bien accepter une proposition CINAR/Nelvana et, dans un 14 autre dossier, accepter une autre forme de proposition. 15 11679 COMMISSIONER PENNEFATHER: Those are 16 the individual negotiations. 17 11680 On the financing picture as well, the 18 licence fee program, you are of course aware of the 19 discussion we had yesterday with the Directors Guild 20 regarding their findings and concerns, that 21 broadcasters are claiming the top-up fee as their own 22 program expenditures. 23 11681 This is fine, but what they were also 24 tabling was the level of that top-up fee. Do you care 25 to comment on the discussion and on this issue that was StenoTran 2491 1 raised yesterday? Do you have any further 2 clarification? 3 11682 M. MACEROLA: Je ne suis pas très au 4 courant de la discussion que vous avez eue là-dessus. 5 11683 CONSEILLÈRE PENNEFATHER: On peut 6 peut-être revenir plus tard quand on discutera avec le 7 groupe des fonds, mais je peux vous dire très, très, 8 très brièvement. 9 11684 On parle du fait que, en anglais, que 10 the CRTC require broadcasters to contribute to licence 11 fees amounting to 24.5 per cent of the program budget 12 for drama. This licence top-up was then increased to 13 35 per cent. Thus the top-up gave broadcasters a 43 14 per cent bonus, but this has changed. Projects can now 15 qualify for support even when broadcasters contribute 16 licence fees for as little as 15 per cent of the 17 budget. 18 11685 You were not aware of this report? 19 11686 MR. MACEROLA: No. 20 11687 COMMISSIONER PENNEFATHER: Perhaps 21 you would care to comment on it later. 22 11688 M. MACEROLA: Ou peut-être quand le 23 Fonds canadien de télévision va comparaître; il y aura 24 peut-être une question dans ce sens-là à leur adresser. 25 11689 CONSEILLÈRE PENNEFATHER: Peut-être. StenoTran 2492 1 11690 Two more points from me and then I 2 will let my colleagues ask you questions. 3 Recommendation 15: 4 "Téléfilm recommande au Conseil 5 que la télévision canadienne 6 reflète adéquatement les besoins 7 de la minorité linguistique 8 officielle des autochtones." 9 11691 Comment on devrait aller de l'avant 10 avec cette recommandation? Quelles sont les précisions 11 que vous pouvez apporter à comment faire? 12 11692 M. MACEROLA: C'est-à-dire que 13 présentement il existe un programme, qui est adminsitré 14 par le Fonds canadien de télévision, un programme de 2 15 millions de dollars pour la production d'émissions de 16 télévision en langue autochtone. Naturellement, quand 17 vous rencontrez les communautés autochtones, ce 18 qu'elles vont vous dire est que le programme répond 19 très bien à leurs réalités culturelles, sauf cependant 20 que ça prendrait des fonds additionnels. 21 11693 D'un autre côté, au niveau de 22 l'administration de ce programme, que ce soit tant de 23 la composante droits de diffusion que de la composante 24 capital, participation au capital, on essaie d'avoir le 25 moindre de mesures restrictives possibles. Par StenoTran 2493 1 conséquent on accepte même, en lieu de droits de 2 licence, des prestations de services. 3 11694 Par conséquent, ce qu'on voulait tout 4 simplement indiquer dans cette recommandation-là était 5 que, oui, c'est important de représenter les minorités 6 du pays, que ce soit des minorités autochtones ou des 7 minorités francophones à l'extérieur du Québec ou 8 anglophones au Québec. C'est tout. Et on voudrait 9 qu'éventuellement ce ne soit pas nécessairement au 10 niveau des conditions de licences, mais c'est 11 certainement dans des déclarations d'intention. 12 11695 CONSEILLÈRE PENNEFATHER: Il n'y a 13 pas une enveloppe, un pourcentage, 1 pour cent du fonds 14 EIP qui est destiné à la production? 15 11696 M. MACEROLA: Autochtone? 16 11697 COMMISSIONER PENNEFATHER: 17 Aboriginal -- 18 11698 M. MACEROLA: Oui, oui. Il y a 1 19 million de dollars qui est destiné, du côté du 20 programme d'équité, et 1 million du côté aussi des 21 droits de diffusion. Ça fait 2 millions en total. 22 11699 CONSEILLÈRE PENNEFATHER: Ça 23 représente quelle proportion, quel pourcentage, du 24 fonds en sa totalité? 25 11700 M. MACEROLA: Un pour cent... 2 StenoTran 2494 1 millions sur 200 millions, c'est 1 pour cent. 2 11701 CONSEILLÈRE PENNEFATHER: On a eu les 3 représentants de TVNC ici. Ils ont, à titre d'exemple, 4 exprimé le voeu que ce pourcentage soit plus approprié 5 au pourcentage de la population autochtone au pays, qui 6 est à peu près 2,8 pour cent. 7 11702 M. MACEROLA: Mon collègue Garry Toth 8 et moi avons rencontré naturellement les communautés 9 autochtones. C'est bien évident qu'elles voudraient 10 avoir accès à plus de fonds mais, d'un autre côté, pour 11 l'instant la décision du conseil d'administration du 12 Fonds canadien de télévision était de conserver, à tout 13 le moins pour l'instant, le programme au niveau de 2 14 millions, parce qu'on commence à expérimenter 15 simplement avec eux et éventuellement, sur une période 16 de un an ou deux, on va être capables de réellement 17 définir quelle va être la demande. 18 11703 Tant Gary que moi, on a mentionné aux 19 communautés autochtones qu'à ce moment-là on 20 transporterait leur dossier auprès du conseil 21 d'administration. 22 11704 CONSEILLÈRE PENNEFATHER: Alors vous 23 pensez que le système de télévision canadienne 24 conventionnelle devrait refléter la diversité de la 25 population canadienne? StenoTran 2495 1 11705 M. MACEROLA: Oui. 2 11706 CONSEILLÈRE PENNEFATHER: Une 3 dernière question. En parlant de l'univers télévision, 4 on parle d'un environnement analogue aujourd'hui, mais 5 est déjà commencé -- et ça vient très vite en termes de 6 production et distribution et l'accès au produit -- 7 l'ère numérique. 8 11707 Est-ce que vous avez des 9 commentaires, des suggestions sur quelles seront les 10 priorités en termes de la production des programmes 11 canadiens et l'accès à ces programmes par les Canadiens 12 à l'avenir?Mr. 13 11708 M. MACEROLA: Je pense que, dans un 14 premier temps, il va falloir déterminer si on va 15 réglementer le phénomène des nouvelles technologies, 16 dans un premier temps. Dans un deuxième temps, 17 Téléfilm Canada été mandaté par le Gouvernement du 18 Canada pour administrer un programme multimédia de 30 19 millions de dollars. J'espère que ce n'est que le 20 début, parce qu'il y a d'autres recommandations qui ont 21 été déposées au gouvernement, entre autres le Groupe 22 sur la télévision numérique, pour ajouter un 50 23 millions de dollars à ce fonds-là. b Éventuellement, on 24 va se retrouver avec une convergence des médias qui va 25 faire en sorte qu'on va possiblement faire du StenoTran 2496 1 webcasting. 2 11709 D'autre part, à Téléfilm Canada, 3 notre objectif dans tout ce développement-là, c'est 4 d'être capables d'offrir aux créateurs d'ici la 5 possibilité de créer des contenus qui vont répondre aux 6 médias et qui vont répondre aux attentes du public. 7 11710 On est un investisseur, on n'est pas 8 un producteur, et je pense qu'avec le programme 9 multimédia on est en train de se fourbir les armes pour 10 éventuellement arriver avec des programmes qui vont 11 mieux répondre à la convergence des médias. 12 11711 CONSEILLÈRE PENNEFATHER: Merci, 13 messieurs, mesdames. 14 11712 Merci, Madame la Présidente. 15 11713 LA PRÉSIDENTE: Maître Blais. 16 11714 Me BLAIS: J'ai deux questions. La 17 première est une question de clarification. 18 11715 Monsieur Marcerola, vous avez parlé 19 du fait, quand on parlait d'investissements en capital 20 par les radiodiffuseurs, que vous exigiez que 50 pour 21 cent du droit d'auteur soit détenu par les producteurs 22 indépendants. Est-ce que c'est une obligation qui 23 découle de votre loi constitutive ou est-ce que c'est 24 une politique interne? 25 11716 M. MACEROLA: Ça découle de la loi StenoTran 2497 1 constitutive. 2 11717 Me BLAIS: Et vous interprétez 3 l'obligation dans votre loi que le film doit être 4 détenu par des Canadiens que ça suffit si 50 pour cent 5 est détenu par des Canadiens, du droit d'auteur. 6 11718 M. MACEROLA: C'est ça, 50 et... 7 11719 Me BLAIS: Et un petit peu plus, 8 c'est ça. Une majorité claire. 9 11720 M. MACEROLA: C'est ça, une majorité, 10 oui. 11 11721 M. LaPIERRE: Cinquante plus un. 12 11722 Me BLAIS: Pardon? 13 11723 M. LaPIERRE: Cinquante plus un. 14 11724 Me BLAIS: D'accord. 15 11725 M. MACEROLA: Moi, je ne 16 m'embarquerais pas là-dedans. 17 11726 Me BLAIS: Ma deuxième question porte 18 sur les traités de coproduction, parce qu'évidemment 19 vous avez un rôle important dans ce domaine. 20 11727 L'APFTQ a proposé, en matière de 21 crédits dans les règlements du Conseil, qu'une 22 coproduction majoritairement canadienne reçoive un 23 crédit de 150 pour cent. Je voulais savoir si, de 24 votre point de vue, ce genre de règlement serait 25 conforme à nos obligations, les obligations du Canada StenoTran 2498 1 c'est-à-dire, en vertu des traités et, deuxièmement, 2 est-ce que ce serait conforme à l'esprit des traités de 3 coproduction dans le sens du retour d'ascenseur entre 4 les majoritaires et les minoritaires? 5 11728 M. MACEROLA: Une coproduction 6 majoritairement... indépendamment du seuil, que ce soit 7 une coproduction à 20 pour cent si elle est 8 quadrapartite ou tripartite ou quoi que ce soit? 9 11729 Me BLAIS: Ils ont parlé seulement de 10 coproduction majoritaire. Je pense qu'ils prenaient 11 l'hypothèse probablement bipartite seulement et non si 12 on avait une coproduction qui était 60/40, admettons, 13 qu'on traiterait celle-là... on lui accorderait un 150 14 pour cent de crédit. 15 11730 M. MACEROLA: J'aimerais vous revenir 16 par écrit sur ce point-là parce que, dans un premier 17 temps, j'aimerais être capable de vérifier avec mon 18 équipe les effets que ça pourrait avoir, dans un 19 premier temps, combien il y a de coproductions 20 majoritaires au pays et, d'autre part, est-ce qu'on 21 peut se permettre de se donner des avantages, comme 22 Canadiens, sans qu'il y ait contrepartie de l'autre 23 côté? Ça, encore une fois, c'est quelque chose que 24 j'aimerais vérifier et, dès la semaine prochaine, je 25 vous ferai parvenir le point de vue de Téléfilm Canada StenoTran 2499 1 là-dessus. 2 11731 Me BLAIS: Excellent. Vous avez très 3 bien saisi le but de ma question, et on attend de vous 4 lire sous peu. 5 11732 Merci. 6 11733 M. MACEROLA: Merci. 7 11734 Me BLAIS: Ce sont mes questions. 8 11735 LA PRÉSIDENTE: Merci, mesdames, 9 messieurs, et bon retour dans la région dont vous 10 venez. 11 1455 12 11736 MR. LaPIERRE: We wish you well, 13 Madam, through this jungle of words. 14 11737 THE CHAIRPERSON: You will pray for 15 us, Mr. LaPierre. 16 11738 MR. LaPIERRE: I do everyday, Madam. 17 11739 THE CHAIRPERSON: You don't need a 18 mike for that. Mr. Macerola can join in. 19 11740 Nous allons prendre une pause pour 15 20 minutes maintenant. We will have a break for 15 21 minutes and be back at quarter after. 22 --- Short recess at / Courte suspension à 1501 23 --- Upon resuming at / Reprise à 1521 24 11741 LA PRÉSIDENTE: Madame la Secrétaire, 25 would you call the next participant, please? StenoTran 2500 1 11742 MS BÉNARD: Thank you, Madam Chair. 2 11743 The next presentation will be by the 3 Writers Guild of Canada and I would invite Ms Parker to 4 introduce her colleagues. 5 PRESENTATION / PRÉSENTATION 6 11744 Mme PARKER: Bonjour. Thank you for 7 the opportunity to appear before the Commission. My 8 name is Maureen Parker. I am the Executive Director of 9 the Writers Guild of Canada. With me is Robert 10 Geoffrion, to my right, of Montreal, a screenwriter and 11 Treasurer of the Writers Guild. To my left is Jim 12 McKee, our Director of Policy and Communications. 13 11745 THE CHAIRPERSON: Good afternoon. 14 11746 MS PARKER: We are here today to 15 speak on behalf of 1,400 screenwriters working in 16 English-language film and television production in 17 Canada. The Writers Guild of Canada's primary purpose 18 is to promote and protect the economic and moral rights 19 of screenwriters. Our writers are the creators, the 20 storytellers. 21 11747 By "creators", we mean that our 22 writers are the people who start with nothing but an 23 idea and a blank page. It is Canadian writers who 24 create series like "Black Harbour", "Traders", "Cold 25 Squad" and "Due South", television movies like "The StenoTran 2501 1 Boys of St. Vincent" and "Love and Hate". Without 2 writers there are no stories to tell, no programs to 3 produce. 4 11748 For this reason, we are focusing our 5 presentation today on three key issues of direct 6 concern to writers. The first is investment and 7 development, the critical stage when ideas are 8 transformed into scripts which can be produced as 9 programs. Our second issue concerns ensuring that 10 Canadians have creative control over television series. 11 Our final proposal addresses the point system used to 12 determine whether a program qualifies as Canadian. 13 11749 The current definition allows a 14 scripted program to qualify even if it isn't written by 15 a Canadian, but television is a writer's medium. We 16 believe use of a Canadian writer should be a 17 fundamental requirement for a program to be recognized 18 as Canadian. 19 11750 A community of writers is at the 20 heart of any truly indigenous television production 21 industry. If we are to have a broadcasting system that 22 provides Canadians with a diverse range of stories that 23 reflect our own experience and that address themes 24 unique to this country, such a community is essential. 25 Over the past 19 years, the Canadian broadcasting StenoTran 2502 1 industry has experienced tremendous growth, but as the 2 system has grown, new problems have emerged. In some 3 ways, the system is now failing Canadian creators, the 4 very people who create distinctively Canadian programs. 5 11751 Development is the stage when new 6 television series and television movies are created. 7 It is the least visible stage in the process leading to 8 the production of new programs, yet the most important. 9 In recent years, while production has increased, the 10 resources committed to development across the industry 11 have decreased. 12 11752 The CBC, long a major investor in 13 development, has been forced to sharply cut back its 14 activities in this area in the wake of successive 15 rounds of budget cuts. As Canada's major production 16 companies have grown, they have increasingly focused 17 their attention on export markets, particularly the 18 United States, in the process shifting the bulk of 19 their development effort to Los Angeles. Federal and 20 provincial tax credits introduced to encourage film and 21 television production have focused on supporting 22 production excluding development. 23 11753 There is a further stress within the 24 system affecting writers. The current 6-out-of-10 25 definition of a Canadian program employed by the StenoTran 2503 1 Commission, has supported the phenomenon of the "made 2 in L.A." Canadian series. Often described as 3 "industrial" production, these series are typically 4 created and developed in the U.S. They employ Canadian 5 directors and technical crew to conform with the 6 minimum Canadian creative requirements to access tax 7 credits and qualify as a Canadian program under the 8 CRTC's definition. They do not employ Canadian 9 writers. 10 11754 A few statistics will indicate the 11 effect this has had on the creators. Los Angeles now 12 constitutes the second-largest membership base for the 13 Writers Guild of Canada. From 1996 to 1997, the volume 14 of U.S.-based writers working on Canadian series more 15 than doubled. One-third of the Writers Guild income is 16 now generated from writers resident in the United 17 States. 18 11755 There is a problem with the public 19 policy framework that leads to an expansion of programs 20 created and developed in Los Angeles and conceived 21 primarily for sale to the U.S. market. In this export 22 model, Canadians are relegated essentially to assembly 23 work with the creative control residing outside of 24 Canada. 25 11756 I will pass this on to Robert StenoTran 2504 1 Geoffrion. 2 11757 MR. GEOFFRION: Thank you. 3 11758 I will address this Commission from 4 my own point of view, that of a working writer in 5 Canada, a working screenwriter. This is about my 6 experience, that of my colleagues and what I have seen 7 of this industry in over 25 years. 8 11759 In 1971, I graduated from Loyola 9 College in Montreal with a post-BA diploma in 10 communication arts. Being somewhat naive, I set out to 11 become a Canadian screenwriter. I was told, "Go right 12 ahead, write screenplays. One of them may even get 13 produced one day, but don't expect to be paid. They 14 don't buy screenplays in Canada." I disregarded the 15 comment. 16 11760 After working on industrial films at 17 Crawley Films in Ottawa and as a freelance 18 writer/director, I moved to L.A. in 1977, where I spent 19 three years writing screenplays I would then inflict on 20 people who didn't particularly want to read them. I 21 returned to Canada in 1980 and something eerie 22 happened. Although I had had nothing produced, I came 23 from L.A. and I wrote screenplays, so I became known as 24 an L.A. writer. That sounded pretty good to me. 25 11761 Within a year and a half, I had my StenoTran 2505 1 first movie on the big screen. Since then I have added 2 over 20 feature films and television movies in English 3 and in French to my CV, films that were shot in Canada, 4 the U.S., France, Germany, Argentina, Australia, even 5 Abu Dhabi. But as I here, I am feeling a very strange 6 case of what Yogi Berra called déjà vu all over again. 7 As it was in 1971 when I graduated from Loyola, there 8 is no money out there for screenwriters and as it was 9 in 1980 when I returned to Montreal, people are damn 10 impressed if you come from L.A. 11 11762 Well, I'm no longer an L.A. writer. 12 I don't bank in Beverly Hills or Santa Monica or, God 13 forbid, in Sherman Oaks or Encino, and I don't pay my 14 taxes to Uncle Sam. I'm a Canadian writer who has 15 chosen to live and to work here. There are great 16 writers in this country. There would be even more if 17 we got some sort of support; not much, just a little. 18 A little credit would be nice, too, but we don't want 19 to exaggerate. 20 11763 But it seems to me that Canadian 21 writers are the forgotten people of the Canadian 22 television and film industry. We are made to feel as 23 if we live in the Twilight Zone. Even in this day and 24 age, I'm still asked by otherwise intelligent people: 25 What exactly does a screenwriter do? StenoTran 2506 1 11764 Well, writers create the original 2 story and its dramatic structure. We organize it into 3 scenes, we describe not only the setting, but the 4 action. We create the characters, we make them speak 5 word for word for word, we tell you where they go and 6 what they do, we tell you when they laugh and when they 7 cry and when they live and when they die. Sometimes we 8 even write the camera angles. 9 11765 In adapting literary work to the 10 screen, the process is slightly different, but the 11 result is the same. We make that book or short story 12 shootable. By the time we finish a screenplay, we have 13 seen the movie. It's all there on the printed page. 14 Let me add this. Writers not only create the movie, 15 but we also create jobs for all the directors, actors 16 and technicians who come in when our work is done. 17 Without us, there is no them. 18 11766 Writing movies is the best job in the 19 world. Writers know something that few others know. 20 That something is simple. Without writers there is no 21 movie, there is no television series, there is only a 22 blank page and a blank screen. 23 11767 Thank you. 24 11768 MR. McKEE: Clearly, many of the 25 trends we have outlined extend beyond the authority of StenoTran 2507 1 the Commission. However, the CRTC has the power to 2 bring considerable leverage to bear in balancing the 3 system. 4 11769 First, the Writers Guild of Canada 5 supports the "7 & 7 from 7 to 11 proposal" put forward 6 by the Directors Guild of Canada. Given the 7 profitability of the private broadcasters, we believe 8 the scheduling and expenditure commitments envisaged by 9 this proposal are realistic and would provide Canadians 10 with a significant increase in domestic programs in the 11 under-represented categories, particularly drama. But 12 additional shelf space for Canadian programs, in and of 13 itself, is not adequate. We believe the broadcasting 14 system also has a responsibility to support the 15 development of Canadian programs. 16 11770 You simply can't have high-quality 17 Canadian programs without investing in development. 18 Compared to the cost of production, investment in 19 development is relatively inexpensive, but it is 20 necessary to ensure that only the best stories are 21 produced and that they have been fully realized before 22 shooting begins. 23 11771 The Writers Guild of Canada proposes 24 that the CRTC institute a practice of setting out 25 specific development expectations for individual StenoTran 2508 1 broadcasters within their conditions of licence at 2 licence renewal time. Such a step would increase the 3 attention paid to this critical phase of the creative 4 process and increase the resources committed across the 5 system to the development of new programs. 6 11772 Moreover, we urge the Commission to 7 increase the emphasis it places on ensuring that 8 creative control is genuinely in the hands of 9 Canadians. This means ensuring that programs are 10 created in Canada by Canadians and that series story 11 departments are based in Canada under the creative 12 leadership of Canadians. This is no less important 13 than the requirement for Canadian producer control over 14 a program. 15 11773 Finally, the Writers Guild believes 16 the time has come to raise the bar in terms of the 17 definition of a Canadian program. We propose that use 18 of a Canadian writer be made mandatory. In parallel 19 with such action, we would propose that the current 6- 20 out-of-10 points minimum standard be raised to 8 21 points. 22 1535 23 11774 The six-point benchmark was 24 established more than a decade ago, when the industry 25 was in its infancy, scarcely an industry at all. The StenoTran 2509 1 picture today is far different. Across the industry, 2 there is a sufficient depth of talent to sustain 3 production at a higher standard. 4 11775 For this reason, we have advocated 5 adopting an eight-point standard as a new benchmark, 6 and making both Canadian writers and directors 7 mandatory. 8 11776 We believe that implementing these 9 measures will help ensure that Canadians have available 10 to them a wide diversity of indigenous programs to 11 choose from in addition to the great variety of 12 international programs carried on our broadcast system. 13 It is also the key to ensuring that our successes on 14 the international market support the creation and 15 production of new, distinctly Canadian programs. 16 11777 That concludes our presentation. 17 Thank you. 18 11778 LA PRÉSIDENTE: Merci, madame et 19 messieurs. 20 11779 Commissioner Wilson, please. 21 11780 COMMISSIONER WILSON: Good afternoon. 22 Thanks for being with us. 23 11781 What I would like to do is go through 24 your written submission; and maybe as we do that, we 25 will tie in some of the points that you have expanded StenoTran 2510 1 on today during your presentation, and I can fill out 2 what you said in June when you filed your comments. 3 11782 You are focusing on three areas: 4 investment in development; the point system; and 5 creative control. 6 11783 You also talked about the importance 7 of public funding and the role of the CBC when you 8 filed your submission. 9 11784 I wanted to note one thing, and that 10 is in your Conclusion on page 8, before you get into 11 your Appendix, where you talk about: 12 "As Canada's broadcasting system 13 continues to expand, and the era 14 of digital television draws 15 nearer, the CRTC's role grows 16 more -- not less -- important." 17 11785 As you know, many have been 18 predicting our demise in recent days. It is always 19 heartening to see that somebody things we are going to 20 be around for a bit. 21 11786 The first area is investment in 22 development. In your submission, you talked about the 23 exhibition and expenditure requirements and your 24 support for the Directors Guild, seven and seven, from 25 7:00 to 11:00. StenoTran 2511 1 11787 I am not going to ask you a lot of 2 questions about that program itself, because we had the 3 Directors Guild here yesterday and went through that 4 with them. I think the mechanics of it are fairly 5 straightforward. 6 11788 However, in terms of narrowing the 7 definition of prime time to eliminate the 8 marginalization of Canadian programming, you want to 9 change it from 6:00 to 12:00 to 7:00 to 11:00. 10 11789 I don't know if you participated in 11 any discussions with the Directors Guild, but why 7:00 12 to 11:00 as opposed to 8:00 to 11:00 or 8:00 to 10:00? 13 11790 MS PARKER: Because that is the 14 industry standard. In fact, in our collective 15 agreement with the independent producers, the CFTPA and 16 the APFTQ, prime time is defined as 7:00 to 11:00. 17 That is the industry standard. 18 11791 COMMISSIONER WILSON: We have had a 19 number of parties who have suggested that we should 20 collapse it even further since the peak viewing takes 21 place starting around 8 o'clock. So 8:00 to 11:00, in 22 terms of drawing viewers to the programs, is a better 23 time to have those programs scheduled. 24 11792 I was interested in your reason for 25 that. StenoTran 2512 1 11793 The 7 percent of broadcast revenues 2 to original programming in the under-represented 3 categories: When you talk about investment in 4 development, are you talking about taking a portion of 5 that 7 percent and allocating it specifically to 6 development, when you say you would like to ensure that 7 broadcasters contribute to development specifically -- 8 the development of Canadian programs, not just the 9 production of them. 10 11794 Would that allocation to develop 11 constitute part of the 7 percent? 12 11795 MS PARKER: Yes. 13 11796 COMMISSIONER WILSON: So it is not an 14 additional, above and beyond -- 15 11797 MS PARKER: No. 16 11798 COMMISSIONER WILSON: Did you have 17 anything in mind? 18 11799 MS PARKER: No, we do not have a 19 specific figure in mind. 20 11800 MR. McKEE: We think it should be 21 done on a case-by-case basis, based on each 22 broadcaster's situation. So licence renewal time would 23 be an opportunity to make the specific discussion for 24 Broadcaster A, B, C, D and so on. 25 11801 MS PARKER: And we would do that StenoTran 2513 1 through a condition of licence. 2 11802 COMMISSIONER WILSON: You say on page 3 5 that the 7 percent of broadcast revenues to original 4 programming: 5 "...should represent a 6 broadcaster's direct 7 expenditure, excluding 8 contributions from such public 9 sources as the Canadian 10 Television Fund..." 11 11803 And excluding promotion of Canadian 12 programs. 13 11804 We had quite an extensive 14 conversation with the Directors Guild about the licence 15 fee program top-up, so I will not pursue that with you. 16 11805 What about the half-hour 17 entertainment shows that broadcasters are talking about 18 in terms of building the Canadian star system? 19 11806 MS PARKER: You mean the promotional 20 shows? 21 11807 COMMISSIONER WILSON: Yes. 22 11808 MS PARKER: We don't think that 23 should count as Canadian content or go toward that 24 figure that we are presenting. 25 11809 COMMISSIONER WILSON: That should StenoTran 2514 1 just be a cost of their doing business -- 2 11810 MS PARKER: Promoting the program. 3 It is not an actual program. 4 11811 COMMISSIONER WILSON: What about your 5 definition of "first run"? What is your definition of 6 "first run"? There have been a number of different 7 definitions presented to us. 8 11812 MR. McKEE: Basically, the definition 9 that the Directors Guild is using is two runs, two 10 plays for a given program. 11 11813 COMMISSIONER WILSON: And for a given 12 broadcaster? I think the CFTPA has said that one 13 broadcaster could play it twice, and it would be first 14 run; and another broadcaster in a different area could 15 run it and that would count as first run there as well. 16 11814 MR. McKEE: Yes. 17 11815 MS PARKER: In terms of collective 18 bargaining, in the agreements that we have with the 19 producers, we generally do attribute the first two runs 20 as first runs. Definitely when they switch to a 21 specialty network, et cetera, it starts again. The 22 first two runs would then be considered first run. 23 11816 COMMISSIONER WILSON: The addition of 24 three hours of children's programming, you suggested in 25 your submission that the Commission might conclude that StenoTran 2515 1 all broadcasters should do some children's programming. 2 11817 I want you to expand on that for me. 3 11818 MR. McKEE: I guess the latitude 4 exists within almost any programming format to tailor a 5 certain portion of that for a younger audience. We 6 were suggesting that the Commission might wish to 7 consider that more broadly even in the context of the 8 specialty channels. 9 11819 COMMISSIONER WILSON: What you are 10 suggesting is that every conventional broadcaster and 11 every specialty channel would do three hours a week of 12 children's programming? 13 11820 MR. McKEE: Our core position was 14 that it should apply to the conventional broadcasters, 15 but its potential for application more broadly should 16 be examined as well. 17 11821 MS PARKER: Especially with channels 18 that specialize in children's programming, such as YTV, 19 et cetera. 20 11822 COMMISSIONER WILSON: I think they 21 already do well in excess of that. 22 11823 MS PARKER: Yes, they do. So they 23 don't have to worry about that. 24 11824 COMMISSIONER WILSON: No. I think 25 they meet that criteria. StenoTran 2516 1 11825 Let me just look at my notes, here, 2 because I am jumping around a little bit. 3 11826 About the development funds, in your 4 submission, at paragraph 13, you talk about the fact 5 that: 6 "...the current criteria allow 7 Canadian programming to be created 8 outside the country by non- 9 Canadians." 10 11827 If we were, by condition of licence, 11 for example, to require a specific percentage of the 12 broadcast revenues to be devoted to development, would 13 that fix that problem? 14 11828 MS PARKER: No, that would not, in 15 and of itself, fix that problem. That problem needs to 16 be addressed through the point system and by 17 ascertaining where the creative development takes 18 place. 19 11829 For example, under the regulatory 20 system that we have set up, it is mandatory that a 21 producer be a Canadian. It is not mandatory that a 22 writer be Canadian. The writer or the director are 23 both worth two points, and are interchangeable in terms 24 of qualifying for six out of ten production. 25 11830 There is also a component known as StenoTran 2517 1 the story department, made up of executive producers, 2 executive story consultants, story editors, et cetera. 3 They really are the machine in a series. They create 4 the stories; they write the bibles; they assist with 5 the budgeting; they hire the staff, et cetera. 6 11831 It is critical that that component be 7 Canadian. And that is what has changed dramatically 8 over the last several years. Those story departments 9 have moved down to the United States. The hiring is 10 taking place in L.A. 11 11832 Those story departments are made up 12 -- it depends on the show. But some of the series, for 13 example, are made up of entirely Americans in the story 14 departments. Some are a mix of Canadian and American. 15 They are the creative machine. They determine the 16 direction that that series will take, the characters, 17 et cetera. 18 11833 So if these people are not Canadian, 19 there is no way we are telling a Canadian story. 20 11834 COMMISSIONER WILSON: I guess your 21 suggestion on this is that we raise it to eight out of 22 ten points, so that the writer -- 23 11835 MS PARKER: Eight out of ten, making 24 the writer mandatory and looking seriously at 25 addressing the issue of where the story department StenoTran 2518 1 resides and who has creative control over that story 2 department. Is it an American run story department or 3 is it Canadian run? 4 11836 MR. GEOFFRION: There is a very 5 simple reason why this is happening, and that is that 6 the producers are really quite desperate to sell their 7 programs to American networks basically and to do co- 8 productions with American partners. They are willing 9 to go to any extent to cater to those people. 10 11837 At least the American networks and 11 American producers -- God bless them -- do realize that 12 the writer is the most important part of the television 13 process, to the point where they are made writer- 14 directors. The reason that they wan these people in 15 L.A. is that they can have first hand on those scripts 16 at every stage of development. 17 11838 Once the script is finished, it is 18 shipped up to Canada and technicians go to work, 19 including directors. They don't have to worry about it 20 any more, because the script is done; it is finished; 21 they know exactly what it is going to look like. That 22 is why it is so important for them to keep those people 23 in L.A. or to get their L.A. people up here to control 24 story departments. 25 11839 We say it may be a Canadian StenoTran 2519 1 production. It is not a Canadian film. It is not 2 Canadian television. 3 11840 It is produced in Canada. But if the 4 writers, or at least the majority of the writers in 5 those story departments are not Canadians, I am sorry, 6 it doesn't cut the cake. 7 11841 What it is also doing is forcing 8 Canadian writers who want to work in Canada to move 9 down to the U.S. and to pay their tax dollars in the 10 U.S. so that these productions can now come back up as 11 Canadian productions. 12 11842 COMMISSIONER WILSON: Are these 13 industrial programs, as you described them? Or are you 14 saying that this happens on distinctively Canadian 15 programs as well? 16 11843 MR. McKEE: We are talking about the 17 industrial programs. 18 11844 COMMISSIONER WILSON: The industrial 19 programs. 20 11845 MR. McKEE: The programs that are 21 geared for export. And to be clear, we have nothing 22 against export programming. In fact, we think some of 23 the big successes have been programs that are developed 24 here and sold around the world, such as "Emily of New 25 Moon", "Road to Avonlea". StenoTran 2520 1 11846 We think that is a good model in 2 terms of covering the cost of production and of telling 3 the stories -- 4 11847 COMMISSIONER WILSON: And is it 5 happening on those two shows? 6 11848 MR. McKEE: Those stories are 7 successful stories on the international market. 8 11849 COMMISSIONER WILSON: But were those 9 written by -- 10 11850 MR. McKEE: Those programs are 11 Canadian through and through. 12 11851 COMMISSIONER WILSON: Those are ten 13 out of ten. 14 11852 MR. McKEE: Yes. The problem that 15 has arisen is that the notion of export production has 16 really been kind of retrofitting of "made in L.A." 17 series that are reverse engineered to qualify as 18 Canadian. 19 11853 They are completely severed from the 20 Canadian creative community. 21 11854 COMMISSIONER WILSON: What proportion 22 of the production that is taking place in Canada right 23 now is for export? 24 11855 MR. GEOFFRION: It is all for export. 25 11856 MS PARKER: This is a difficult StenoTran 2521 1 question. 2 11857 COMMISSIONER WILSON: But it is much 3 harder to export distinctively Canadian programming. 4 11858 MR. McKEE: Is it? 5 11859 COMMISSIONER WILSON: That is what we 6 have been told; that it is more difficult to export. 7 11860 MS PARKER: "Love and Hate", an 8 excellent film. I am a viewer. I watch Canadian 9 television. I would rather watch a "Love and Hate" 10 than a -- 11 11861 COMMISSIONER WILSON: But would the 12 Americans rather watch a "Love and Hate"? 13 11862 MR. GEOFFRION: It was the number one 14 show -- 15 11863 MS PARKER: Well, it was the number 16 one rated show on NBC. So I think so. 17 11864 If we produce quality television in 18 Canada, anyone will watch it. We short-change 19 ourselves and undermine our own confidence constantly. 20 If we make quality programming, which takes money, we 21 can sell it anywhere. 22 11865 Just to get back to your industrial 23 question, you were asking what percentage: That is 24 really tough to ascertain. True service production -- 25 for example, we don't get copies of those contracts. StenoTran 2522 1 They don't come into the Guild, because they don't 2 engage any of our writers. 3 11866 So we have no idea in terms of 4 expenditures, revenue, budget size, how much is out 5 there. It is a lot. We know it is quite a bit because 6 we exchange information with the Actor/Performers Guild 7 and the DGC. 8 11867 We do have examples of shows. I will 9 give you one example, because I think specifics prove 10 the point. 11 11868 We have a show right now, "Police 12 Academy", filming out in Vancouver, certified as 13 Canadian content. The entire story department -- six 14 people in this story department -- are U.S. citizens. 15 11869 Out of the 26 episodes, 21 of those 16 episodes are written by Americans and five are written 17 by Canadians. But that qualifies as a Canadian content 18 production. 19 11870 MR. GEOFFRION: And it is a series 20 based on an American film. 21 11871 MS PARKER: That is the type of 22 programming that we are talking about. 23 11872 We have those figures. We have 24 several other shows like that as well. 25 11873 COMMISSIONER WILSON: Could you leave StenoTran 2523 1 those with us? 2 11874 MS PARKER: We would put them in on 3 the 15th. 4 11875 COMMISSIONER WILSON: That would be 5 great. 6 11876 What I am trying to balance in my 7 mind is that, on the one hand, there is the argument 8 that industrial programming does create jobs for 9 Canadians -- maybe not writers necessarily, but in 10 other positions. 11 11877 MR. GEOFFRION: We are all in favour 12 of industrial productions. Bring them up here. Get 13 everyone working. Everyone is pretty much working. 14 The crews are working. We have nothing against that. 15 We think this is great. 16 11878 MS PARKER: Canadian writers would 17 love to write industrial programming. Why are we 18 pigeon-holed into writing about Anne of Green Gables, 19 or the snow, or an igloo? Our writers are talented 20 enough certainly to put together a "Police Academy". 21 11879 It is just some supposition that only 22 Americans or writers hired out of L.A. are talented 23 enough to work on these shows. It is also a function 24 of the deal that the producers are cutting with their 25 American partners; that the story department will StenoTran 2524 1 remain in the U.S.; that they will have some form of 2 creative control. 3 11880 These are assurances that these 4 producers are required to give to their American 5 counterparts. 6 11881 What I think we need to remember is 7 that those Americans are producing up here because they 8 need our tax credit. They need that money. They are 9 up here for financial reasons. 10 11882 The Commission is in a perfect 11 position right now to change the rules, because this 12 production would still continue. We have the writers. 13 We have the talent in this industry. We need the 14 Commission to make the change so that they are forced 15 to start to contract writers. 16 11883 When the system was changed and 17 producers were forced to contract directors to work on 18 Canadian programs, there was screaming and kicking, et 19 cetera. But now the directors are working. 20 11884 COMMISSIONER WILSON: The two 21 suggestions that you have made in concert with the 7:00 22 to 11:00 plan are allocating a portion of that to 23 development and adjusting the point system. 24 11885 You feel quite confident that that is 25 a good way to repatriate some of those jobs? StenoTran 2525 1 11886 MR. McKEE: Yes, we think it is a 2 good start. We think it is a realistic measure to go 3 for. And we think that by establishing specific 4 development benchmarks for each of the broadcasters, it 5 will at least serve as a bit of a counterweight to the 6 other stuff coming out of the States. So it would be a 7 very positive move. 8 11887 COMMISSIONER WILSON: Those are all 9 of the questions that I have for you. Thank you. 10 11888 I don't know if any of my colleagues 11 have questions. 12 11889 THE CHAIRPERSON: Commissioner 13 Cardozo, please. 14 11890 COMMISSIONER CARDOZO: Thank you, 15 Madam Chair. 16 11891 Thank you for our presentation and 17 the discussion so far. 18 11892 First, a question following up on a 19 question that Commissioner Wilson asked you in terms of 20 promotion. I hear your answer about not wanting 21 promotion to count. But I am wondering whether you 22 would draw a distinction between a 30-second or a 60- 23 second promotion versus an "Entertainment Tonight" type 24 of program, which is a combination of snippets from 25 shows, interviews, pictures of people walking in and StenoTran 2526 1 out of expensive homes, and whatever else you see on 2 those types of shows. 3 1550 4 11893 MR. McKEE: I guess in terms of 5 trying to increase the presence of under-represented 6 programming across the system, we see that as a 7 separate order. It's the type of programming that you 8 would undertake in large part to promote your own 9 product. We think there would be a business case to do 10 that. We think this should focus really more on 11 programming that's purely within the definition of 12 under-represented. We think other types of programming 13 could be focused on. 14 11894 COMMISSIONER CARDOZO: I'm not clear 15 that in terms of an "Entertainment Tonight" program, 16 would you -- 17 11895 MR. McKEE: No. We would not be 18 looking for that type of programming to be -- 19 11896 COMMISSIONER CARDOZO: Counted as 20 Canadian. 21 11897 MR. McKEE: Yes, counted as Canadian. 22 11898 COMMISSIONER CARDOZO: My other 23 question is in relation to I suppose who your members 24 are. We had a couple of other people up last week. I 25 was asking them about the relationship between writers. StenoTran 2527 1 I am thinking of fiction and non-fiction writers and 2 the television industry, to what extent there is a 3 connection. 4 11899 Obviously your members, the screen 5 writers, play a critical role in that because often the 6 writers who write those books aren't screen writers or 7 aren't trained to be screen writers. We are talking 8 about different skills often. 9 11900 My question is whether you think 10 there is enough Canadian books, fiction or non-fiction, 11 that do end up on the TV screen or feature films. My 12 understanding is that in Britain, the BBC does a lot of 13 that. We don't seem to have any structured approach or 14 even an intended policy to do more of that, yet the 15 book producing industry has been enormously successful 16 in the last couple of decades with a lot of very 17 dynamic stuff coming out. 18 11901 MS PARKER: Yes. Now, I certainly 19 agree with you. In that instance, everyone knows who 20 creates. It is the writer. In our business, our 21 writers are not afforded the same respect. 22 11902 COMMISSIONER CARDOZO: Right. 23 11903 MS PARKER: I will answer the first 24 part of your question, who we are. Our guild, the 25 Writers Guild of Canada, represents professional screen StenoTran 2528 1 writers. We are a certified bargaining agent under the 2 federal Status of the Artist legislation. 3 11904 We do, of course, meet and discuss 4 issues of common concerns with the other writers 5 groups, but they do not work in our genre. 6 11905 With respect to adapting their work 7 to the screen, we think that's a great idea. There is 8 certainly no reason why it shouldn't go further and be 9 put into motion. There are a number of books that have 10 been put into -- made into productions. For example, 11 we are all waiting for "Big Bear", Rudy Weeb's book, 12 which will be out shortly. Guy Vanderhasey's book has 13 been optioned. Linda Spensen's "Marine Life". 14 11906 The problem, and maybe it's just a 15 misconception in some ways, is that it takes a very 16 long time for a screen play to reach completion. They 17 are not put together in a week or a month. They often 18 take a year or two in development. 19 11907 It's difficult to raise financing. 20 There is, as we were saying, no development money. The 21 book, for example, may have been optioned three years 22 prior, but it takes a long time to get to the final 23 screen play. 24 11908 We do have a number of excellent 25 Canadian novels that are being adapted currently and we StenoTran 2529 1 hope, of course, that that will continue. 2 11909 MR. McKEE: Just to add to that a 3 bit. One of the difficulties in terms of adapting 4 books has been simply the difficulties that exist in 5 Canada, both in terms of making feature films and in 6 making television movies. 7 11910 Over the past ten years television, 8 in English Canada anyway, has almost by default become 9 the avenue through which you could see mainstream 10 narrative films. The CBC in particular was a major 11 producer and broadcaster of those films. With the cuts 12 they have sustained, they have cut back their 13 production in that area. 14 11911 With the changing market, television 15 movies are among the most difficult types of 16 programming to get off the ground in Canada. Rudy 17 Weeb's "Big Bear" took 19 years, so the life cycles can 18 be three, five and with no guarantee that at the end 19 anything will happen. 20 11912 Certainly with the level of 21 achievement of our novelists, there is a huge untapped 22 resource there in terms of material. 23 11913 COMMISSIONER CARDOZO: Do you think 24 that producers, if they see a book that's doing well 25 and has a certain appeal to Canadians, do they see that StenoTran 2530 1 as something that's worth turning into a movie or a 2 show? 3 11914 MS PARKER: I think it depends on the 4 producer, as Jim was saying. Certainly with the loss 5 of funding to our national broadcaster, that was a blow 6 for that style of production. 7 11915 There seems to be a revival of sorts. 8 Again, it depends entirely on the broadcaster, whether 9 they want a sickness of the week movie or something 10 based, you know, on a fine piece of Canadian 11 literature. 12 11916 COMMISSIONER CARDOZO: For 13 professional screen writers, do they prefer to write 14 from the blank page, which I think is the term you have 15 used in your written brief, or is there a lower status 16 if you were turn a novel into a movie? 17 11917 MR. GEOFFRION: No, absolutely not. 18 It depends, you know, if it's an original idea that you 19 have, you want to write it yourself, but if you are 20 offered an adaptation of a book, I mean, it's a 21 wonderful way to write also. I have done a number of 22 them. 23 11918 COMMISSIONER CARDOZO: There's a lot 24 of interpretation to do. 25 11919 MR. GEOFFRION: Yes. You have to StenoTran 2531 1 rethink the book completely into movie form or a 2 television series form. The process is slightly 3 different. As I said, the result is the same. 4 11920 You make that book shootable. You 5 give that book, your screen play, which goes to a 6 Director and he can now shoot his movie because it's 7 all there for him. 8 11921 I have yet to see a Director being 9 handed 120 pages of blank paper and saying "Go and see 10 a movie". It has to come from somewhere. It comes 11 from writers. 12 11922 COMMISSIONER CARDOZO: Thanks very 13 much. 14 11923 Thanks, Madam Chair. 15 11924 THE CHAIRPERSON: Thank you, Ms 16 Parker, Mr. McKee, Mr. Geoffrion. It's nice to have 17 you with us. 18 11925 MS PARKER: Thank you. 19 11926 MR. McKEE: Thank you. 20 11927 THE CHAIRPERSON: Madam Secretary? 21 11928 MS BÉNARD: Thank you, Madam Chair. 22 11929 The next presentation will be by the 23 Canada Television and Cable Production Fund. I would 24 invite Mr. Stursberg and his colleagues to please come 25 forward. StenoTran 2532 1 PRESENTATION / PRÉSENTATION 2 11930 THE CHAIRPERSON: Good afternoon, Mr. 3 Stursberg, Mr. Macerola. Mr. Macerola, don't forget 4 your mike because you may be suspended this time. 5 11931 Go ahead when you are ready. 6 11932 MR. STURSBERG: Good afternoon, Madam 7 Chair, members of the Commission and staff. Madame la 8 Présidente, les membres diu Conseil et tout le 9 personnel, bonjour. 10 11933 My name is Richard Stursberg and I am 11 the Chair of the Canadian Television Fund/Fonds 12 canadien de télévision. With me today is Garry Toth 13 who is on my left here who is the Executive Director of 14 the Licence Fee Program of the Canadian Television 15 Fund, and on my right, I think everyone knows François 16 Macerola who is the Executive Director of Telefilm 17 Canada, which administers the Equity Investment Program 18 of the fund. 19 11934 Commissioners, as you are aware, the 20 Canada Television and Cable Production Fund has 21 recently undergone a facelift. We have been renamed 22 the Canadian Television Fund/Fonds canadien de 23 télévision, representing one fund with two 24 complementary programs. 25 11935 In terms of the fund's importance, StenoTran 2533 1 the CTF is the largest cultural organization outside of 2 the CNBC. The fund is governed by a Board of Directors 3 representing both the private and public sectors, 4 including the cable industry, film and television 5 producers, public and private broadcasters, 6 distributors, exporters and the federal government. 7 This private-public partnership as represented by the 8 Board is a unique structure in Canada for a cultural 9 organization. There is in fact nothing else like it. 10 11936 Dû aux nombreux points de vue 11 échangés à notre conseil d'administration, nous avons 12 choisi de laisser à nos membres la tâche de soumettre 13 leurs propres propositions concernant les changements 14 qui pourraient être apportés à la réglementation du 15 CRTC. Nous profiterons de cette occasion pour 16 expliquer le fonctionnement du FCT et pour élaborer sur 17 la participation du Fonds dans la réalisation des 18 objectifs à long terme établis par le Conseil. 19 11937 The fund was created by the 20 Government of Canada and the Canadian cable industry. 21 It was launched by the Minister of Canadian Heritage in 22 September of 1996 with a federal influx of $100 million 23 and the amalgamation of the former Cable Production 24 Fund and the former Broadcast Program Development Fund 25 of Telefilm Canada. StenoTran 2534 1 11938 The CTF is a private not-for-profit 2 corporation operating via a contribution agreement with 3 the Department of Canadian Heritage as well as 4 receiving revenues from broadcast distribution 5 undertakings, primarily from the cable television 6 companies, by way of CRTC regulatory direction. The 7 contribution agreement determines with the Department 8 of Canadian Heritage determines how the money is spent 9 and as such, the government sets the framework and the 10 Board of the fund sets the policy. 11 11939 Le FCT comporte deux programmes 12 complémentaires de financement: le Programme de droits 13 de diffusion, or the Licence Fee Program, which, as 14 mentioned, is Mr. Toth, administré par les employés du 15 FCT, et le Programme de participation au capital -- 16 c'est M. Macerola et Téléfilm Canada -- or the Equity 17 Investment Program, qui est administré, comme j'ai dit, 18 par Téléfilm Canada. 19 11940 L'appui financier du PDD profite à 20 une programmation de haute teneur culturelle 21 canadienne. Ces suppléments aux droits de diffusion 22 sont accordés selon des critères d'admissibilité axés 23 sur le marché. D'une manière complémentaire, le PPC 24 considère les productions appuyées en tant qu'un 25 investissement tout en cherchant à présenter la StenoTran 2535 1 meilleure qualité pour chaque catégorie aux 2 téléspectateurs et aux téléspectatrices de partout au 3 pays. 4 11941 The fund supports programming in the 5 Commission's under-represented categories, including 6 children's variety, drama and performing arts as well 7 as documentaries, programming that is culturally and 8 socially significant to Canadians, yet difficult to 9 develop on a purely commercial basis. The CTF is the 10 single most important financing source for Canadian 11 television. 12 11942 The fund continues to increase its 13 emphasis on distinctive Canadian programs, including 14 those reflecting a Canadian point of view and based on 15 Canadian themes, stories and events. 16 11943 We also believe it is important to 17 maintain or increase viewership opportunities for 18 programs produced with CTF financing and to enhance the 19 capacity of the Canadian broadcasting and production 20 sectors to produce and distribute Canadian television 21 programs across the country. 22 11944 In 1996/97, our combined budgets of 23 just under $200 million triggered production budgets of 24 $625 million, most of these, in fact the overwhelming 25 majority of these, achieved ten out of ten points on StenoTran 2536 1 the CAVCO Canadian content point system. These budgets 2 were responsible for well over 2,000 hours of 3 television, about double the volume from the previous 4 year. This production activity supported highly 5 skilled, well paid jobs for nearly 20,000 Canadians. 6 11945 Le tiers des fonds du FCT contribue 7 au financement des projets de langue française tandis 8 que les deux-tiers des fonds engagés annuellement sont 9 consacrés à des projets dans la langue anglaise. La 10 SRC/CBC peut recevoir jusqu'à 50 pour cent du budget du 11 Programme de droits de diffusion et a une enveloppe 12 fixe de 50 pour cent au Programme de participation au 13 capital. 14 11946 Comme j'ai déjà mentionné ou j'ai 15 déjà noté, le Fonds participe au financement 16 d'émissions dramatiques, de variétés, de documentaires, 17 d'arts de la scène et d'émissions pour enfants. 18 Plusieurs de ces émissions ont été acclamées par la 19 critique et ont remporté de nombreux prix, tant au 20 Canada qu'à l'étranger, notamment les Gemini, les prix 21 Gémeaux, Emmys et bien d'autres. Tous ces hommages 22 témoignent de la qualité et de la diversité des 23 émissions appuyées par le FCT. Voici quelques exemples 24 d'émissions acclamées: "Omertà: La loi du silence", 25 "Sous le signe du lion", "Pin-Pon", "This Hour has 22 StenoTran 2537 1 Minutes", "Emily of New Moon", "Cold Squad" and 2 "Traders". 3 11947 The CTF budget comes from three 4 sources: a $100 million annual contribution from the 5 Department of Canadian Heritage, an additional $50 6 million from what was Telefilm's Broadcast Fund and the 7 balance from an annual private sector contribution of 8 $51 million, that's what it will be this year, the 9 overwhelming majority of which comes from the Canadian 10 cable industry. 11 11948 As demand continues to increase for 12 CTF support, marketplace pressures are making 13 television ever more competitive and expensive. In 14 addition to costly production values and promotion 15 budgets, globalization and rising audience expectations 16 will continue to challenge the production of 17 distinctive Canadian programming and the ability of the 18 fund to respond. 19 11949 Last April, the level of demand on 20 the CTF was unprecedented and overstressed a system 21 designed for smaller demand. This demand reflects the 22 vibrancy of our production industry and both dictates 23 and allows us to develop a framework for change within 24 the CTF. 25 11950 We can look forward to an increase in StenoTran 2538 1 the distinctiveness test which we hadn't been able to 2 do before. The arbitrariness of the first-come, 3 first-served provision can and will be removed. We can 4 move towards a more market-driven machinery in 5 assessing projects. 6 11951 The end result of last April was the 7 commitment of the two programs to work towards change. 8 We now share the same vision. Our simple new name and 9 look reflects what's been going on behind the scenes. 10 The Board of Directors has been working with both the 11 staff of the LFP and the EIP to streamline procedures 12 and make the two programs of the fund as complementary 13 as possible. The level of co-operation between the two 14 programs has been exceptional. 15 11952 Harmonizing will ensure that the fund 16 and its two programs operate with common objectives, 17 guidelines and processes to ensure our activities are 18 clear, simple and effective for everyone. 19 11953 There will be only one set of 20 guidelines this year. For the next round of 21 applications, there will no longer be a first-come, 22 first-served process for the LFP and the EIP with 23 respect to its investments will become more 24 transparent. 25 11954 In an effort to ensure that the fund StenoTran 2539 1 continues to increase its emphasis on very distinctly 2 Canadian programs, it will support only those projects 3 which are based on a Canadian point of view and reflect 4 Canadian themes, stories and events. Streamlining the 5 decision-making process is still being refined. 6 However, the EIP will remain recoupment driven while 7 the LFP will become more market driven. 8 11955 We are moving forward, but we aren't 9 fully there yet. We hope to have concluded discussions 10 with our Board in the near future and would be pleased 11 to present an outline of our new guidelines to the 12 Commission soon after that time. In fact as soon as we 13 have concluded the discussions with the Board, we would 14 be delighted to come down and give you a briefing on 15 where we are. 16 11956 Together, these two programs of the 17 CTF are striving to strengthen Canadian content and 18 ensure that Canadians have the opportunity to see 19 themselves reflected on their television screens. 20 11957 D'abord, nous avons presque atteint 21 nos objectifs de 1998 et 1999: accroître le volume 22 d'émissions distinctement canadiennes quant au nombre 23 d'heures et de projets; améliorer la qualité et le 24 caractère distinctif de la programmation canadienne et 25 accroître globalement l'auditoire des émissions StenoTran 2540 1 canadiennes. Deuxièmement, nous prenons des mesures 2 afin de répondre à des demandes toujours plus 3 nombreuses de la part de notre clientèle de base, qui 4 ne cesse de s'accroître. Troisièmement, nous avons les 5 moyens de prévoir la croissance de nos revenus du 6 secteur privé pour mieux planifier notre avenir. 7 11958 Finally, the CTF operates primarily 8 as a cultural initiative and as such, we have 9 constantly raised the bar on the criteria that qualify 10 programs for funding. At the same time, we will 11 continue to help Canadian producers and broadcasters 12 make programs that are competitive and potentially 13 profitable, not only domestically but in the export 14 market as well. 15 11959 Thank you very much for the 16 opportunity to appear. We would be pleased to answer 17 any questions you may have. 18 1615 19 11960 THE CHAIRPERSON: Thank you, Mr. 20 Stursberg. 21 11961 Commissioner Pennefather? 22 11962 COMMISSIONER PENNEFATHER: Thank you, 23 Madam Chair. 24 11963 Thank you for your presentation and 25 your submission. I understand from what you have said StenoTran 2541 1 this afternoon and in your submission that you are 2 leaving comments on a number of issues to your 3 individual members and that your intention was to 4 present a factual review of the funds, but I hope that 5 you will be able to help us with some of the points 6 that you raised today and perhaps clarify some facts 7 about the existing funds and hopefully talk to us a 8 little more in-depth about where you are heading. 9 11964 With that in mind, it was just 10 interesting to read how you are going forward in line 11 with saying greater harmonizing between the funds. As 12 you go about making these policies, how do you bring 13 all the varying opinions and positions and sometimes 14 competing efforts of the various players together in 15 formulating your policy. I am interested in the 16 process that you will be undertaking in the next little 17 while to assure that the policy that you develop and 18 the guidelines that you develop can really respond to 19 the forces that you have described today. 20 11965 MR. STURSBERG: We have been working, 21 I think it's fair to say, over the last few months now 22 to achieve these changes in the Fund. We have the good 23 fortune to have, as I mentioned earlier, on the board 24 extensive representation from all parts of the private 25 industry that are interested in this subject. So, we StenoTran 2542 1 have three board members who represent the producers, 2 three members who represent the private broadcasters, 3 another who represents the CBC, another who represents 4 distributors. So, we have a very good board from the 5 point of view of ensuring that, as we move forward with 6 these changes, we can achieve some consensus that will 7 be broadly acceptable to the industry as a whole. 8 11966 COMMISSIONER PENNEFATHER: Indeed, 9 the Fund is made up of, putting it very simply, dollars 10 from the taxpayers through the government and dollars 11 from the cable subscribers, so that the public is 12 involved. How is the public at that table? 13 11967 MR. STURSBERG: Well, the public is 14 at the table a number of ways. There are three seats 15 that are seats for the government and beyond that, of 16 course -- I know this may sound a little odd, but there 17 are a number of other parties who actually have 18 absolutely no financial interest whatsoever in the 19 outcome, who, therefore, take the view that however the 20 Fund is going to be changed or managed should be done 21 purely in terms of what the public interest dictates. 22 11968 So, for example, there are three 23 people from the cable industry. The cable industry 24 puts money into the Fund, but it does not take money 25 out. So, you have a total of six people on the board StenoTran 2543 1 who have absolutely no financial interest in the 2 outcome and whose concern is simply to ensure that 3 public money is sensibly and prudently spent. 4 11969 COMMISSIONER PENNEFATHER: Now, many 5 parties have suggested that we make recommendations to 6 your board in areas where we do not have direct 7 involvement. How will this process work? How do you 8 see that happening? 9 11970 MR. STURSBERG: I'm not sure what it 10 is you are referring to. 11 11971 COMMISSIONER PENNEFATHER: Well, 12 there are some, for example, guidelines for the funds 13 where people have made recommendations in various 14 interventions regarding the application of those funds, 15 the envelopes, the level of funding, inviting us to 16 make recommendations to your board. 17 11972 MR. STURSBERG: I think the way that 18 it would work is like this. I think you were moving 19 towards a question like this with François earlier on. 20 As I understand the relationship between the CRTC and 21 the Fund, it works like this. In 1994 when the Cable 22 Fund was originally set up, the Commission agreed to 23 that and it created a set of rules as to how the money 24 would be disbursed through the Cable Fund. 25 11973 When the government rolled-in, StenoTran 2544 1 essentially, the EIP program from Telefilm, plus the 2 extra $100 million in 1996, the Board of Directors of 3 the Fund wrote to the CRTC and said that they thought 4 the appropriate thing to do would be to pass 5 supervision of the Fund over to the government, 6 particularly to the Department of Canadian Heritage, I 7 think, on the sensible grounds that the overwhelming 8 majority of the money was coming from the public purse. 9 11974 So, the Commission then agreed that 10 that was the appropriate thing to do. So, 11 responsibility now for the supervision of the 12 activities of the Fund is with the Department of 13 Canadian Heritage and not with the Commission. 14 11975 The way it works as a practical 15 matter is that the Department of Canadian Heritage 16 signs a contribution agreement between the Fund and 17 itself, which lays out its general views as to how the 18 money should be disbursed, and within that context the 19 board of the Fund makes the specific rules that go to 20 make up the guidelines of one variety or another as 21 they work their way through. 22 11976 So, as a practical matter I think 23 that if the Commission had recommendations that it 24 thought were important to make -- and I know there are 25 a lot of items that have come in front of you -- I StenoTran 2545 1 think that's fine. I think that's wholly reasonable 2 and I think that would be very helpful. I think that 3 you should make the recommendations, I would say, both 4 to the government and to the Fund and say, "This is 5 what we have learned from our hearings", and we would 6 value that. 7 11977 COMMISSIONER PENNEFATHER: One 8 example which perhaps you can help me understand is our 9 conversation yesterday with the Director's Guild 10 regarding the licence fee top-up. My question is: In 11 the current operations -- we will talk about future 12 changes in a moment -- are the current LFP guidelines 13 different from those articulated in 1993-93(h), as 14 discussed yesterday, regarding the amount of licence 15 fee top-up supplied by the Fund? This was the 16 statement made on page 5 of the Directors Guild report 17 yesterday. 18 11978 I am just wondering, if they are 19 different, if you could help us understand the 20 rationale behind that, what has evolved and how it has 21 evolved. 22 11979 MR. STURSBERG: Sure. I think you 23 are probably referring to Decision 1994-10. Is that 24 right, Decision 1994-10 of the Commission? 25 11980 COMMISSIONER PENNEFATHER: Decision StenoTran 2546 1 1993-93 and later, yes, I was going to also involve 2 1994-10 regarding the top-up as part of expenditures, 3 but what I am looking at and what was raised with us 4 yesterday was 1993-93 and section (h), which describes 5 the mechanism, which they claimed was a different 6 operation. 7 11981 MR. STURSBERG: Certainly what I can 8 say is this. I don't have, I'm sorry, 1993-93 in front 9 of me, I have 1994-10. But, in any event, not to 10 overly complicate the matter, I think that what 11 happened is very simple. When the Commission agreed 12 that the administration of the Fund and the supervision 13 of the Fund should move to the Department of Canadian 14 Heritage, in effect, the various rules and regulations 15 became somewhat dépassé. 16 11982 Now, if you would like to know, we -- 17 11983 COMMISSIONER PENNEFATHER: I'm sorry, 18 you said became dépassé? 19 11984 MR. STURSBERG: Dépassé. In other 20 words, that they were without force any more because 21 the supervision had passed from the Commission to the 22 Department of Canadian Heritage and then policy was 23 made through the machinery I described. 24 11985 We have established thresholds and we 25 are happy to go through the thresholds, if you would StenoTran 2547 1 like, as to what the requirements are with respect to 2 licence fees from the individual broadcasters and what 3 the total magnitude of the top-ups are that are 4 available currently in the Fund. If you like, Garry 5 will take you through that. 6 11986 I would say that we are certainly 7 conscious, however, of the fact that the question of 8 the relative level of licence fees, which I think is 9 probably what you are really trying to get to, the 10 relative level of licence fees is the subject of 11 considerable interest to many of the parties in this 12 proceeding. We don't propose to take a position today 13 on what the appropriate level is, but I can certainly 14 tell you this much. We have had extensive 15 conversations at the board over the course of the last 16 little while as to what the machinery should be for 17 establishing licence fees and the amount that people 18 would pay and, as well, how much and how large the top- 19 up should be. 20 11987 Now we are in the process, I think 21 it's fair to say, of finalizing these discussions. We 22 hope to have these discussions finalized by sort of 23 mid/late October at the board and when we do that, when 24 that is concluded, as I was mentioning earlier, we 25 would be happy to come down and explain to you all of StenoTran 2548 1 the associated machinery since I think it will end up 2 having some interesting implications for your own 3 deliberations on the issue of licence fees. 4 11988 COMMISSIONER PENNEFATHER: Well, I 5 agree it is a very important issue and I would 6 appreciate hearing why and how the licence fee top-up 7 amounts have evolved the way they have. I'm sure we 8 will come back to the point you made regarding process 9 and jurisdiction in terms of responsibility, but you 10 are right to go on. It is a point that is raised on 11 many levels. 12 11989 One is -- and I think Telefilm raised 13 it as well -- that licence fees have gone down. Two, 14 in terms of this particular program, is it the case 15 that the cash on the table is actually lower than 16 originally was intended in the CRTC direction and that, 17 in effect, which is what the Directors Guild are 18 saying, private broadcasters are claiming as 19 expenditures money that isn't theirs. In fact the 20 licence top-up fee has become, through the bonus 21 system, larger than originally intended. Perhaps you 22 could explain how that evolved. Maybe there is a 23 reason for it. 24 11990 MR. STURSBERG: I will ask Garry to 25 explain the history of how the thresholds got struck StenoTran 2549 1 and then I would like to come back to the question of 2 how the top-ups are treated for regulatory purposes, if 3 you don't mind. 4 11991 MR. TOTH: Sure, I would be pleased 5 to. 6 11992 All the guidelines that have been set 7 over the past years have been set through the mechanism 8 that Richard has described, plus industry consultations 9 per year. What has evolved over the last years is a 10 series of thresholds that reflect the need to encourage 11 regional programming, regional licensing and/or licence 12 fees that, through consultation with the industry, 13 reflect the specific needs of genre. 14 11993 What I would ask Michaela, if it 15 would help, Commissioners, is that we walk you through 16 what the guidelines were as of this year and that may 17 -- walk through that matrix. 18 11994 COMMISSIONER PENNEFATHER: Am I right 19 that it's this matrix that's in your guidelines? 20 11995 MR. TOTH: Yes. 21 11996 COMMISSIONER PENNEFATHER: Just so we 22 are clear, its says the LFP will provide to an eligible 23 applicant or an eligible program a contribution that is 24 equal to 10 per cent of the budget and this may be 25 supplemented by one or more bonuses, which is where we StenoTran 2550 1 get up into higher fees. 2 11997 MR. TOTH: The distinctively 3 Canadian, yes. 4 11998 MR. STURSBERG: Would you like us to 5 walk you through that? We are happy to do that, if you 6 would like to. 7 11999 COMMISSIONER PENNEFATHER: Just to 8 clarify very, very briefly, if you would, what the 9 current licence fee top-up bonus is for drama. 10 12000 MS JOLY: Certainly. 11 12001 MR. BLAIS: Excuse me, could you 12 identify yourself for the stenographers? 13 12002 MS JOLY: Bonjour, Michaela Joly. 14 12003 Yes, certainly. First of all, the 15 licence fee threshold has been set depending upon 16 whether or not you are a Toronto/Montreal production or 17 whether or not you are a regional production and it has 18 also been set in terms of the genre of the programming, 19 whether or not you are drama or falling into the other 20 categories of documentary, variety, performing arts and 21 children's programming. So, in that sense there is a 22 minimum required for the broadcaster to pay. 23 12004 Then we would provide the production 24 if it met the minimum threshold with a ten per cent 25 base contribution. From then on, if the project were StenoTran 2551 1 determined distinctively Canadian, we would add five 2 per cent. If the project were determined entirely a 3 regional project, we would increase that by ten per 4 cent. Finally, if you are a French-language production 5 for which there is no international or English-language 6 pre-sale, we would give you five per cent. All that 7 adds up to somewhere of a minimum of about 20 per cent 8 to a maximum of 40 per cent of your budget. 9 12005 CONSEILLERE PENNEFATHER: Merci. 10 12006 When the Directors Guild says, in 11 effect, that projects can now qualify for fees as 12 little as 15, which would be your regional, per cent, 13 it can now increase this to as much as 45 per cent? 14 12007 MS JOLY: Actually, to 45. For 15 example, if you are a drama that is distinctively 16 Canadian entirely based in the region in a French- 17 language production, you could achieve as much as 45 18 per cent of your budget. 19 12008 COMMISSIONER PENNEFATHER: Thus, in 20 some cases, they go on to say, the bonus to 21 broadcasters from the policy can be as much as 200 per 22 cent of its actual licence fee to the producer. Do you 23 agree? Is that correct? 24 12009 MS JOLY: I will ask you to respond. 25 12010 Could you ask that again, please? StenoTran 2552 1 12011 COMMISSIONER PENNEFATHER: Thus, in 2 some cases, the bonus to broadcasters from the policy 3 can be as much as 200 per cent of its actual licence 4 fee to the producer. Is that correct? 5 12012 MS JOLY: As the minimum, yes. For 6 example, in some projects a broadcaster may pay a 7 minimum of 10 per cent and achieve up to 30 per cent. 8 So, it would be one-third -- it would be three times 9 what they paid. 10 12013 COMMISSIONER PENNEFATHER: I think 11 the significance of this -- and I am just stating this 12 so that you can provide an explanation or a 13 clarification -- the significance of this, which they 14 have tabled with us, is that the licence free program 15 funding will allow those broadcasters to reduce their 16 Canadian content expenditures by up to $24 million a 17 year while still complying with their licences. Is 18 this, in effect, what the result is of the bonus system 19 as it works now? 20 12014 MR. STURSBERG: You mean in terms of 21 the way the allocation of the licence fee top-up to the 22 estimate of the total expenditures made on programming 23 for your purposes? 24 12015 COMMISSIONER PENNEFATHER: Correct. 25 12016 MR. STURSBERG: Yes. In fact what it StenoTran 2553 1 will be do is precisely that, it will tend to invert 2 it. That's one of the reasons -- that's why I wanted 3 to come back to this other point, because I know this 4 has also been a subject of some discussion here. There 5 is a little bit of history to this, actually. I took 6 the trouble to read through the history. 7 12017 A while back the Commission had 8 written to the Fund and asked the Fund for its view as 9 to whether the licence fee top-up money should 10 constitute part and parcel of the total expenditures on 11 programming for your purposes in terms of the rules you 12 made. We wrote back and said sagaciously, "We have no 13 view on this matter and we are unlikely to come to a 14 view on this matter." But I think that really the 15 issue of how you treat the top-up money is really to 16 you and I think you should treat it whatever way seems 17 most appropriate to you in terms of the changes that 18 you are going to make to the system. 19 12018 I thought, actually, one of the 20 observations, to be candid with you, that was made by 21 the man from YTV today was quite a sensible 22 observation. He said, "Well, you know, in the old days 23 there was some confidence you would actually get the 24 licence fee money." This was when, you know, the 25 supply of money matched the demand. Now that's much StenoTran 2554 1 more difficult to predict and, as I mentioned, we will 2 be making some significant changes to the way in which 3 the licence fee top-ups are allocated this year and 4 that it might be easier for you to be able to have a 5 common baseline against which to judge everybody, 6 frankly, not to take into account. 7 12019 Then what you would do is you would 8 say, "Fine, if the licence fee top-up money doesn't 9 constitute part and parcel of the measurement of their 10 total expenditures, then you just drop down whatever 11 the level of total expenditures are that you are 12 requiring from them to take account of the fact that 13 you are not going to have them adding in that. So, in 14 some sense, you keep your regime whole and you avoid 15 the fluctuations and variations and the controversies 16 associated with this. From our point of view, that's 17 fine. It has no impact on us. 18 12020 COMMISSIONER PENNEFATHER: Were you 19 going to add something else, Mr. Toth? 20 12021 MR. TOTH: No. 21 12022 COMMISSIONER PENNEFATHER: Thank you 22 for that. We may have further questions on that point. 23 I would just like to turn to a couple of other points 24 at this time and come back perhaps later to that. 25 12023 On a going-forward basis, as the term StenoTran 2555 1 is, you have made a statement today about the demand 2 increasing on the Fund, that: 3 "...marketplace pressures are 4 making television more 5 competitive and more expensive. 6 In addition to costly production 7 values and promotion budgets - 8 globalization and rising 9 audience expectations will 10 continue to challenge the 11 production of distinctive 12 Canadian programming - and the 13 ability of the Fund to respond." 14 12024 That's a fairly serious comment in 15 terms of the future of the Fund and what you will be 16 looking for. 17 12025 What then is the connection between 18 that, if I may -- and again you may care to comment or 19 not because this is in evolution, I am sure, between 20 that and your definition of a Canadian program. For 21 example, we have had several different comments on 22 that. Norflicks, as an example, would define a 23 Canadian TV program, film or series as one made 24 primarily by Canadians, financed mainly by Canadians 25 for a Canadian audience by a company controlled by StenoTran 2556 1 Canadians, which I am sure fits, but you have added the 2 element of stories, themes and events which are 3 Canadian; so, the subject matter. 4 12026 So, in other words, a Canadian cannot 5 make a film about an event that may have occurred in 6 Europe or about a theatrical play not written by a 7 Canadian. I am just exaggerating to get the point 8 across. Then you also address the importance of the 9 exportability of Canadian product in terms of the large 10 questions you raise. 11 1635 12 12027 Is this the direction that you are 13 taking in terms of the distinctively Canadian product? 14 12028 MR. STURSBERG: I think to help this 15 discussion along it is important to distinguish, if I 16 may, two kinds of Canadian products. 17 12029 There are the Canadian products; and, 18 as I understand the CRTC's rules, you have to hit a six 19 out of ten to be considered a Canadian product. For 20 the Television Fund, the minimum rule is eight out of 21 ten; and, as I mentioned earlier, it is now pretty well 22 ten out of ten for everything we have financed in the 23 past. 24 12030 Nevertheless, there are these two 25 different regimes. StenoTran 2557 1 12031 Where we are going with our regime -- 2 12032 We are going to create the threshold 3 for even being considered to have access to the 4 financing that it must be distinctively Canadian; which 5 means that the project must be Canadian in the sense 6 that you would have absolutely no doubt, were you to 7 look at it, that it was made by and for Canadians. 8 12033 So it is made from a Canadian point 9 of view; it is about Canadian stories; it is about 10 Canadian themes; it is about Canadian ideas; et cetera. 11 That is going to be the threshold just for you to get 12 into the program to be considered. 13 12034 The question you have to ask 14 yourselves, it seems to me, is a slightly different 15 question. And we will deal with that. We will spend 16 $200 million on that next year. 17 12035 Your question is: Do you want your 18 rules to perfectly match ours? Or do you want your 19 rules to stay where they are, at six out of ten? Or do 20 you want them somewhere in between? That is your 21 question. 22 12036 Obviously, as you move the rules 23 around, then the amount of financing available is 24 different. For our very tough rules, there is $200 25 million of the kind of money that we have been talking StenoTran 2558 1 about available. 2 12037 There is a whole series of other 3 kinds of money available too, that is really kind of 4 indifferent with respect to those kinds of things. For 5 example, the tax credit arrangements in this country 6 are indifferent. So you would get the tax credits just 7 by virtue of the fact that you are making the 8 programming in Canada. There is a whole bunch of other 9 kinds of funds out there of one variety or another. 10 12038 Your ability to be able to presell 11 into other kinds of markets may vary, depending on how 12 distinctively Canadian it is. 13 12039 I only make the point that I think it 14 is important that we realize that there really are two 15 regimes and that that is going to be our regime. 16 12040 One of the questions, I take it, that 17 you will have to address is: How do you want your 18 regime to vary, given the evidence that you have heard 19 here? 20 12041 COMMISSIONER PENNEFATHER: Perhaps a 21 lot of balancing act has to occur. But it is 22 informative to know why you choose the regime that you 23 choose, in light of the constat you yourself have 24 described. 25 12042 MR. STURSBERG: We chose it for two StenoTran 2559 1 or three very simple reasons. 2 12043 One is that this fund is a cultural 3 fund. This fund is about making Canadian programs for 4 Canadians in which they will recognize and see 5 themselves, and it will speak to their concerns. 6 12044 We have the great luxury now, as a 7 result of the intense over-subscription of the fund, 8 the intense demand for the money, to be able to raise 9 the bar dramatically. So we are going to raise the 10 bar. 11 12045 When you look at it, anything that is 12 made from the fund in future, you will have absolutely 13 no doubt that that is Canadian. It could not be made 14 by anybody anywhere else. 15 12046 Our general view is that it is a 16 cultural fund. It is intended for those purposes. As 17 I was saying earlier, because of the level of demand on 18 the fund, we now actually have an opportunity to be 19 able to impose some very stringent requirements with 20 respect to Canadianness of the programming we support. 21 12047 COMMISSIONER PENNEFATHER: With all 22 the proposals for expenditure and exhibition 23 requirements, is this also impacting in your thinking 24 in terms of why you have raised the bar? 25 12048 MR. STURSBERG: I'm sorry; excuse me? StenoTran 2560 1 12049 COMMISSIONER PENNEFATHER: There have 2 been various proposals for exhibition and/or 3 expenditure, or both; the 10-10-10 formula and the 7-7- 4 7; the emphasis on prime time; various credits applied 5 to the truly Canadian program of 200 percent, and what 6 have you. 7 12050 MR. STURSBERG: Right. 8 12051 COMMISSIONER PENNEFATHER: Do you see 9 all of this having an impact on the fund and your 10 ability to support Canadian programming? 11 12052 MR. STURSBERG: To be honest with 12 you, these various schemes that have been discussed 13 with you, whether you over-credit, 7-7-7, 10-10-10, et 14 cetera, we have not discussed any of those matters 15 among ourselves at the board as we have been putting 16 together these proposals. 17 12053 As I was saying earlier, we do not 18 propose to take any particular view on them. I think 19 you have a lot of very gifted, animated and 20 enthusiastic people appearing before you who can argue 21 these questions very effectively. But we have not 22 considered them in any of our deliberations so far. 23 12054 I don't have any doubt that when we 24 put out the new guidelines next year, the fund will be 25 once again heavily over-subscribed. So I don't think StenoTran 2561 1 we are going to have any difficulty hitting these quite 2 hard Canadian tests. 3 12055 One last thing I would say. I 4 believe it has been of some interest to the Commission, 5 this whole question of how does one define 6 distinctively Canadian, and so on. We have made a lot 7 of progress on that. We are, by and large, concluded 8 at the board level as to what the rules will be. 9 12056 As I was saying earlier, we would be 10 happy, just as soon as we finalize a couple more bits 11 and pieces, to come by and take you through it in 12 detail, and explain all of our reasoning and how we got 13 to the various points and how all the machinery will 14 work next year. It will be, I think it is fair to say, 15 quite different from what it was last year. 16 12057 M. MACEROLA: Si je peux me 17 permettre... vous avez vu, j'ai réussi la première 18 fois. Dans le fond, je ne voulais pas parler, c'était 19 juste pour tester si ... 20 12058 Si je peux me permettre... 21 12059 LA PRÉSIDENTE: Une étoile d'or pour 22 vous, Monsieur Macerola. 23 12060 M. MACEROLA: Merci, madame. Je suis 24 très content. Je vais revenir. 25 12061 Si je peux me permettre, à Téléfilm StenoTran 2562 1 Canada... à titre d'exemple, Téléfilm Canada, avant le 2 Fonds et Téléfilm Canada maintenant avec le Fonds, nos 3 projets étaient, dans l'ensemble, neuf sur dix. On 4 avait quelques exceptions, qui variaient entre sept et 5 huit. Ayant fait partie des discussions, je pense que 6 c'est important qu'on mette la barre le plus haut 7 possible au niveau du contenu canadien, parce que c'est 8 un fonds qui n'a pas de vocation industrielle ou 9 commerciale, qui n'a qu'une vocation culturelle, et 10 qui, d'un autre côté, finance avec de l'argent public. 11 12062 Les gens qui veulent faire un autre 12 type de production peuvent facilement avoir accès à 13 d'autres sources de financement. Très souvent, 14 d'ailleurs, on n'a fait que réfléter la réalité, parce 15 que les gens qui déposaient des projets étaient 10 sur 16 10, et parfois 11 et 12 sur 10. Par conséquent, on a 17 essayé de transcrire cette réalité-là dans des méthodes 18 et procédures. 19 12063 Je pense que c'est important qu'un 20 fonds comme celui-là, qui a une vocation culturelle au 21 niveau de la programmation, ait des exigences très 22 sévères, puisqu'on utilise l'argent des citoyens et des 23 citoyennes du pays pour financer cette programmation- 24 là. Et je termine. 25 12064 COMMISSIONER PENNEFATHER: You StenoTran 2563 1 mentioned all the interesting, animated and intelligent 2 people at our table during these hearings. You can't 3 blame me for not asking the intelligent and animated 4 people here now some questions. 5 12065 It is true that you also stated that 6 you are the largest source of funding for programming 7 in this country. So as you develop your thoughts and 8 guidelines, I think it is important that the entire 9 partnership somehow fits together. 10 12066 That is part and parcel of wanting to 11 know from whence came not only the experience of all 12 these years, but from whence are coming your decisions. 13 At some point in time we will have to look at what the 14 CAB on the other side have said, which is that 15 viewership matters. 16 12067 With all this supply, with all this 17 money going into production, as highly qualified 18 Canadian as it can be, if it is not seen, what is going 19 to happen? So what is your comment on the other side 20 of the equation? 21 12068 MR. STURSBERG: We absolutely agree 22 that viewership matters a great deal. There is 23 absolutely no point making programs that people do not 24 want to see. 25 12069 One of the issues that we are also StenoTran 2564 1 working on is the question of building viewership 2 measures into the decision-making process that we use 3 at the fund for the allocation of money; whether on the 4 equity side or on the licence fee top-up side. 5 12070 We have had also very extensive 6 discussions on this subject, as well as how to build it 7 into the machinery of decision-making. Again, I am 8 sorry, I don't mean to be reticent or not forthcoming, 9 but we have not concluded some of these things. 10 12071 As I say, as soon as we have 11 concluded them, we will be delighted to come down and 12 give you as long as you would like to go through all 13 these matters and show you what we did. 14 12072 You will appreciate that it is a 15 little tricky to say so much publicly about it right 16 now because the board has not -- 17 12073 COMMISSIONER PENNEFATHER: I 18 understand. You made that very clear. That is fair. 19 I just felt the importance of opening certain doors -- 20 12074 MR. STURSBERG: Absolutely. And as I 21 say, we are looking very hard at how to incorporate 22 viewership measures into the decision-making process 23 directly. 24 12075 COMMISSIONER PENNEFATHER: In your 25 deliberations, you have a system of envelopes. For StenoTran 2565 1 example, we had a chance to discuss earlier allocations 2 to the regions of this country, such as they may be 3 defined in different ways; allocations to assure, if 4 allocation is the method used, cultural diversity in 5 the programming of this country and aboriginal 6 programming. 7 12076 I assume that is part of your ongoing 8 discussions. What is the process to ensure that there 9 is input from these communities in these discussions? 10 12077 MR. STURSBERG: Just a couple of 11 things. As François mentioned in his own presentation, 12 he was explaining how the targets work within Telefilm 13 Canada. 14 12078 As Garry and Michaela were explaining 15 earlier, we had a regional bonusing system that we have 16 used extensively over the last couple of years on the 17 licence fee side. So we are very conscious of the 18 issues associated with regional matters. 19 12079 Certainly one of the subjects that 20 has been central to our discussion is precisely to 21 ensure that we get effective regional distribution of 22 the money and effective reflection of the regions and 23 the programs that are made. 24 12080 We are absolutely discussing this 25 question once again. StenoTran 2566 1 12081 And again -- and I am sorry to say it 2 again -- we will be happy to take you through where we 3 finally end up. 4 12082 COMMISSIONER PENNEFATHER: We are 5 going to have a lot to talk about. That is okay. 6 12083 I am trying to stick to the things 7 you raised ion the submission, in fairness. You raised 8 on page 19 this comment: 9 "Our planning process includes 10 projections for increased 11 revenue from cable and other 12 licensed TV distributors (BDUs) 13 over the next three years." 14 12084 That comment is predicated on your 15 other sentence above, which says: 16 "While we depend on the 17 government of Canada for the 18 bulk of our revenue...the 19 private sector contribution is 20 crucial -- and growing." 21 12085 There is concern about the 22 continuation of the government side of the equation. 23 12086 Do you have any expectations in terms 24 of revenues from contributions from BDUs? 25 12087 MR. STURSBERG: Yes. We have done a StenoTran 2567 1 number of sets of projections. They are based on two 2 types of growth. One type of growth is that right now 3 the cable industry serves about 75 percent of the total 4 population with households; so there is 25 percent that 5 does not have cable. 6 12088 We think that the percentage of the 7 population that receives their television via some form 8 of BDU -- probably satellites -- will increase. So 9 there will be an increase. And as the satellites 10 penetrate, they should do very well in those markets 11 that cable cannot get to. 12 12089 The second thing is that there has 13 been growth in the total revenues within the market; 14 for example, as tiers and new services are added, 15 obviously the revenues increase and therefore the 16 yields increase as well. 17 12090 We have done a number of projections 18 that look at potential yields over the years, depending 19 on what you assume the growth is going to be. 20 12091 I don't think that at any time in the 21 foreseeable future the private sector money will be 22 able to replace the public sector money, even if the 23 total amount of money is kept constant. I cannot see 24 that happening. 25 12092 The public sector money will remain StenoTran 2568 1 absolutely fundamental and essential to this fund for 2 the foreseeable future. 3 12093 COMMISSIONER PENNEFATHER: That 4 concludes my questions. I have more, but I think I 5 know the answer: "We will get back to you." Just 6 kidding. 7 12094 I wish you the best. You have said 8 in your paper today: 9 "We look toward an increase in 10 the distinctiveness test, which 11 we have not been able to do 12 before. The arbitrariness of 13 first-come/first-served can and 14 will be removed, and we can move 15 toward a more market-driven 16 machinery in assessing projects. 17 12095 What does "market driven" mean? 18 12096 MR. STURSBERG: Market driven means 19 that the decision-making process will reflect the 20 priorities assigned by broadcasters and producers to 21 the making of programming. We assume, and we hope, 22 that in the process it will reflect also what it is 23 that Canadians actually want to see on their screens. 24 12097 COMMISSIONER PENNEFATHER: I think 25 this is the ground for a partnership between the market StenoTran 2569 1 driven, the needs of the broadcaster-producer, and the 2 objectives of the Broadcasting Act, wherein we are also 3 fulfilling public objectives. 4 12098 Thank you very much, gentlemen and 5 ladies. 6 12099 Thank you, Madam Chair. 7 12100 THE CHAIRPERSON: Before we go any 8 further -- I know my colleagues have questions -- let 9 me see what you think of this. 10 12101 The so-called problem raised by the 11 Directors Guild comes from, in part, not from decisions 12 of the Commission, but Public Notices -- which is the 13 reason that I make that distinction; they can be 14 changed. 15 12102 You use the word dépassé because the 16 fund is now in other hands and administered 17 differently. I see the problem as they are not 18 dépassé; they are still on the books. 19 12103 There may be some difficulty, to the 20 extent that the Commission regulates spending by 21 broadcasters, if there is not a better match-up between 22 these Notices so that they do become dépassé and 23 changed by others, which somehow are more in concert 24 with what is happening at the fund. 25 12104 So far so good? StenoTran 2570 1 12105 MR. STURSBERG: I totally agree with 2 that. 3 12106 THE CHAIRPERSON: So it is not a big 4 mystery. They were made to match what the Commission 5 did when it decided how the fund was allocated. 6 12107 Of course, if I have a problem here, 7 counsel will fix it, if I misunderstand. 8 12108 It is just a problem of timing. The 9 way I understand it, that has not quite shown up in any 10 event yet, because of the way it would be accounted 11 for. 12 12109 Where I have more of a question, as I 13 hear you, is that it does not seem to me as simple as 14 saying: "Well, we will decide what the rules are now 15 and we will and brief you on them." So then we adjust 16 our Public Notices so that our goals, if we continue 17 requiring spending requirements, match or work with 18 yours to achieve aims that are similar. 19 12110 I think that both you and the 20 Commission, if we have similar goals, will have to make 21 an effort to coordinate. Otherwise, we will have the 22 Commission correcting its Public Notices so that it 23 works better for accounting, if we still have spending 24 requirements; and then if it does not work for you 25 because you are dispensing funds, and somehow or other StenoTran 2571 1 the formula is not working and the broadcasters make a 2 big pitch to you that it should be changed so that it 3 works better at the Commission, then you will change 4 them and we will keep adjusting. 5 12111 I don't think it is as simple as you 6 make it. 7 12112 You just don't then trot over to the 8 Commission's boardroom and say: "Here are the rules. 9 We will explain exactly how they work." And then the 10 Commission writes back and says: "Well, this is a 11 problem for us." Or we say nothing and just change our 12 rules. 13 12113 It doesn't seem to work all that 14 well. This is a very off the top comment at the 15 moment. But it does seem to me a bit intriguing that 16 the fund would sit there and say: "Oh, well, we will 17 make our rules and then we will tell them what they 18 are." 19 12114 I don't know if that is the best way 20 to approach it. But we will certainly have to think 21 about it and discuss it. 22 12115 MR. STURSBERG: I completely agree 23 with you. 24 12116 THE CHAIRPERSON: It is not that big 25 a mystery. It is simply that we administer the fund. StenoTran 2572 1 We have Public Notices. They are not decisions in the 2 technical sense, but they say: "When we look at 3 whether you met your conditions of licence, this is how 4 we are going to look at it." 5 12117 And lo and behold, two years later, 6 somebody else is administering the fund, and you get 7 the Directors Guild who says: "Oh, well, if you take 8 what you said you would do with what is actually 9 happening out there, the broadcasters are going to get 10 a free ride." That is what is put before us. 11 12118 Is that pretty fair? 12 12119 MR. STURSBERG: There are so many 13 moving parts in this that -- you have four or five 14 different moving parts. 15 12120 THE CHAIRPERSON: You can coordinate 16 them when -- 17 1650 18 12121 MR. STURSBERG: What definitions are 19 you going to use for Canadian qualifications, you know, 20 how much money is going to have to come in by way of 21 quantity of revenues on programming services if you 22 insist on those kinds of rules, where are the 23 thresholds going to be hit, all those kinds of 24 questions. 25 12122 Absolutely, and as I was saying StenoTran 2573 1 earlier, it may be that we are going to have one scheme 2 that is more -- I don't know whether it is going to be 3 more or less -- distinctively Canadian than yours. You 4 may have a scheme that is identical to ours, different 5 from ours, et cetera, but whatever we do, we absolutely 6 have to make sure. 7 12123 I mean the interests of everybody, 8 not just the fund and the Commission, but even more 9 importantly, the broadcasters and the producers, that 10 we make sure that we get these things locked up 11 together in a way that -- 12 12124 THE CHAIRPERSON: To the extent that 13 our goals remain the same. 14 12125 MR. STURSBERG: Absolutely. 15 12126 THE CHAIRPERSON: In fact, they may 16 vary because it's public money, because there's been 17 demand for it. You may have some different 18 requirements. Expenditures could remain necessarily in 19 areas that are not of that superCanadian, but it's 20 still in the public interest. 21 12127 MR. STURSBERG: Yes. 22 12128 THE CHAIRPERSON: All of that can be 23 managed. The difficulty, of course, is that this 24 process of fixing it not in lock-step is complicated by 25 the fact that the way I understand it, the accounting StenoTran 2574 1 and therefore the reporting to the Commission may be 2 long after broadcasters have made their plans and their 3 business decisions. 4 12129 For them as well it's necessary to 5 look a little ahead rather than behind, saying well 6 this is dépassé or if you don't fix this, it will 7 create this problem. 8 12130 Two of my colleagues have questions 9 and then counsel has a question and may fix anything I 10 have disconnected. 11 12131 MR. STURSBERG: Can I just make one 12 last comment? 13 12132 THE CHAIRPERSON: Yes. 14 12133 MR. STURSBERG: One other thing that 15 might be helpful too is that, you know, we would 16 certainly -- we are quite good at doing quite a lot of 17 modelling of what the impact of different kinds of 18 shifts in rules and percentages in this and that is 19 because we have a relatively big database of projects 20 that have been funded, both through the equity program 21 and the licence fee program. 22 12134 As the Commission works its way 23 through some of these issues, we would be delighted to 24 put that kind of capacity at your disposal so if you 25 want us to do that. It would give a feel to you as to StenoTran 2575 1 what the impact would be. 2 12135 THE CHAIRPERSON: It would be very 3 helpful and it doesn't change each body's jurisdiction 4 to decide this is the way we are doing it -- 5 12136 MR. STURSBERG: Absolutely. 6 12137 THE CHAIRPERSON: -- and fix your 7 public notice. 8 12138 MR. STURSBERG: We can at least start 9 to operate more from building a common fact basis. 10 12139 THE CHAIRPERSON: Commissioner 11 Cardozo. 12 12140 COMMISSIONER CARDOZO: Thanks, Madam 13 Chair. 14 12141 A couple of questions, Mr. Stursberg 15 and others. I know you are not ready to discuss this 16 in too much detail, but just so I understand it a bit 17 better. 18 12142 When you talk about moving away from 19 the first-come, first-served basis, I would assume that 20 you are looking at something where you have guidelines 21 ahead of time, a deadline, and then some kind of a 22 valuation, priorization, then the results are 23 announced, something on that basis. 24 12143 MR. STURSBERG: Yes. In fact, we did 25 a very small tranche in September. For the September StenoTran 2576 1 tranche we killed the first-come, first-served, so it's 2 already dead. 3 12144 COMMISSIONER CARDOZO: It didn't make 4 the media, so it must be -- 5 12145 MR. STURSBERG: No, we are trying to 6 keep a slightly lower profile these days. We had 7 enough media attention to last us a while in April. 8 12146 That's exactly right. What we are 9 going to try to do this year, if it's not first-come, 10 first-served for the licence fee side, what's the rule? 11 We are just finalizing the decision-making on the rule. 12 12147 Then what we hope to have is 13 literally a set of objectives as between the two funds, 14 all these threshold tests with respect to 15 distinctiveness that will be identical, a set of 16 guidelines that will be identical. What's a Canadian 17 company? What does it mean to be fully financed? All 18 these various issues that need to be addressed. 19 12148 Then we are going to have a unified 20 set of applications so if you are coming in for equity, 21 you would fill out the same form. If you are coming in 22 for licence fee top-up, if you are coming in for both, 23 we would be able to make it very easy for producers as 24 they are coming in, so we won't have duplicate 25 administration and double paperwork and what not. StenoTran 2577 1 12149 We have been working, as I say, very 2 hard to make sure that the two organizations are now 3 much more closely coordinated. I must say I think that 4 both François and Garry have done really an astonishing 5 job pulling together two organizations which have 6 really very different histories and quite different 7 ways of operating in the past. 8 12150 We hope to do all that and get the 9 guidelines out in November so that we can have an 10 opportunity to explain them in detail to everybody and 11 get them finalized so people can get out and get 12 working in December. 13 12151 To the extent that we can, we are 14 going to try to be more forthcoming rather than less in 15 terms of once we have finalized some of the general 16 principles and what not. We will get those out even in 17 advance of the guidelines. 18 12152 COMMISSIONER CARDOZO: Is it likely 19 that if an applicant makes the cut with one fund, they 20 will make it with the other? 21 12153 MR. STURSBERG: It can. In some 22 cases they only ask for money for one side and not for 23 the other. 24 12154 COMMISSIONER CARDOZO: But if you are 25 asking for both, likely they can access both. StenoTran 2578 1 12155 MR. STURSBERG: One of the key things 2 is precisely we will be able to make sure that they are 3 linked up. Part of the problem we had in April was we 4 didn't have them tightly enough coordinated. 5 12156 Exactly what we have been talking 6 about is how do we guarantee that when people are 7 coming through and they require financing from both 8 sides that that can work properly and, simultaneously, 9 that it doesn't have to be going on purely in series so 10 that we save time by having it more effectively managed 11 together. 12 12157 COMMISSIONER CARDOZO: Okay. The 13 other issue I wanted to talk about briefly is the issue 14 of diversity that Commissioner Pennefather has asked 15 you about and asked Telefilm about as well. Her 16 question to Telefilm was should television reflect 17 diversity and the answer was yes. 18 12158 I just want to mention what we are 19 looking at and perhaps you may or may not be able to 20 add any more to your earlier answer. 21 12159 We are not necessarily in this 22 proceeding looking so much at programming in different 23 languages because that will be the issue of a 24 proceeding further down the road and we will be calling 25 I think it broadcasting policy, although that may be an StenoTran 2579 1 issue for your funds. 2 12160 We are looking here primarily at 3 English and French programming that reflects the 4 cultural and racial diversity. When you talk about 5 emphasis on distinctive Canadian programming, including 6 those reflecting a Canadian point of view and based on 7 Canadian scenes, stories and events, that's the sort of 8 thing that fits very much in there. 9 12161 To give you an example, we had 10 discussions with people from Epitome who talked about 11 how "Degrassi" reflected diversity. Paul Moss today 12 talked about his children's programming. He makes sure 13 that the kids and the actors reflect diversity. 14 12162 Then you have got stories that are 15 sometimes produced by minority producers, like "Inside 16 Stories" that was run by CBC or "Scattering of Seeds" 17 that's running currently on History which might have a 18 particular minority perspective that is not getting 19 explored elsewhere, but is still running in our 20 mainstream broadcasters. 21 12163 I guess the question is it comes back 22 to the adage that CAB talked about the first day, if 23 you don't count it, it won't happen. If you don't 24 count it, you don't see it or it doesn't happen. 25 12164 I sort of wonder whether that's true StenoTran 2580 1 when we look at diversity. CAB's answer was it will 2 happen naturally. Others such as Paul Moss have said 3 they look at it and then think about it and make it 4 happen. 5 12165 I'm just wondering whether you are 6 looking at those sorts of issues, both producers, but 7 otherwise whether there is a way to provide an 8 incentive to productions that reflect diversity just as 9 you do to reflect regional diversity. 10 12166 I say that because one of the things, 11 the unfortunate possibilities, the systemic thing is 12 that when you provide an extra incentive for regional 13 diversity, local programming, which I think has been 14 raised a lot and which people would like to see more 15 of, is there the possibility that regional means other 16 than Toronto, Montreal, where there happens to be a lot 17 of diversity among the actors and the people, the 18 producers and that kind of stuff? 19 12167 Can an incentive of one kind become a 20 disincentive of another kind? Those are just some of 21 the issues that come to mind and I am wondering if you 22 are giving those any thought as you are looking at 23 criteria. 24 12168 MR. STURSBERG: One of the things is, 25 of course, the fund doesn't commission work which is, I StenoTran 2581 1 think, a very important starting point. We react to 2 what comes in. The locus of getting diversity is 3 really, it seems to me, are the people who are 4 commissioning. 5 12169 Our principal thing is, you know, 6 once the work has been commissioned, because you can't 7 tap any of this unless you actually have a broadcasting 8 licence -- 9 12170 COMMISSIONER CARDOZO: Yes. 10 12171 MR. STURSBERG: -- then we go through 11 it, but we go through it -- you know, right now I don't 12 believe we have any particular diversity guidelines 13 that I know of. Garry? 14 12172 MR. TOTH: No. 15 12173 MR. STURSBERG: Nor Telefilm. The 16 only area in which we have what I would describe as 17 explicitly a sort of diversity envelope would be with 18 respect to aboriginal programming where we have a 19 couple of million dollars set aside. Somebody was 20 talking about this earlier on. 21 12174 COMMISSIONER CARDOZO: Yes. 22 12175 MR. STURSBERG: I think François was 23 talking about it. 24 12176 COMMISSIONER CARDOZO: Yes. 25 12177 MR. STURSBERG: But that's the only StenoTran 2582 1 thing. As I say, we are in a slightly different 2 situation. I think if the preoccupation is with 3 respect to diversity, it's more at the level of 4 commissioning than it is at our level. We are 5 primarily concerned with once they pass the distinctive 6 Canadian tests, financing -- 7 12178 COMMISSIONER CARDOZO: I guess I'm 8 asking how do you define that? 9 12179 MR. STURSBERG: Actually, it's 10 interesting. We have had a lot of conversations about 11 -- if I can put it this way. Non-mainstream Canadian 12 stories, how do they fit within this context? For 13 example, one of the things we have talked about among 14 ourselves is say you were from the Caribbean and you 15 wanted to make a television program, how do we 16 discriminate those that are distinctively Canadian from 17 those that are not? 18 12180 If it's just a story about the 19 Caribbean, it's of no interest to us. If it has a 20 story, however, about the Caribbean experience in 21 Canada, it's right smack dead in the middle of the 22 distinctive Canadian tests. Then it's done from the 23 Canadian point of view. 24 12181 If it's about being Caribbean in 25 Canada, no problem. If it's about the Caribbean StenoTran 2583 1 itself, it's out. That's the general way in which we 2 started to think about this and that's why we talk 3 about things like point of view so much. 4 12182 COMMISSIONER CARDOZO: How about if 5 it's a YTV kid's program, were you looking at whether 6 there's diversity among the kids who were there and 7 doing whatever they were going to be doing in that 8 program? 9 12183 With the percentages that we talked 10 about earlier that you provide 10 per cent for 11 regional, is that the kind of thing that can work in 12 this? 13 12184 MR. STURSBERG: I think again that 14 turns really more into a commissioning issue as to the 15 purchasers and producers of the programming than really 16 an issue for us because by the time the project gets to 17 us, those decisions have already been taken. 18 12185 We are presented with a project 19 that's -- if it's a project like the one I was talking 20 about, then I presume if you are going to have a 21 project which is about the Caribbean experience in 22 Canada, then ipso facto it's going to have to be some 23 diversity. Beyond that we don't have any particular 24 tests or rules or bonusing arrangements. 25 12186 Do you want to say a word here? StenoTran 2584 1 12187 MR. TOTH: I think, as Richard said, 2 we receive the projects after they have been along in 3 development and they are finalized. 4 12188 I think if you look at the portfolio 5 that the licence fee program Telefilm has supported, I 6 think without exception all the shows that you named 7 earlier we have supported. 8 12189 We are very conscious in terms of the 9 licence fee top-up side in terms of remaining an 10 objective program and yet being market driven that we 11 do not, and this is one of the fears that are being 12 expressed about the rumours of us going distinctively 13 Canadian, that we are suddenly going to dictate or put 14 very fine restraints around the kinds of content that 15 we're prepared to do. 16 12190 In having, as we said earlier, the 17 need from last April to really brand the fund in terms 18 of what kinds of programs are we able to support given 19 the oversubscription numbers, what we want to do is 20 provide parameters around which we're prepared to look 21 at projects to finance, but in no way are we trying to 22 define for the entire country or the entire system what 23 is a Canadian project. 24 12191 We are trying to define what kinds of 25 projects could come to us. In doing so, we are also StenoTran 2585 1 not trying to dictate content. 2 12192 COMMISSIONER CARDOZO: In reference 3 to the percentage that you talked about, that's the 4 top-up part, is it? 5 12193 MR. TOTH: Yes. 6 12194 COMMISSIONER CARDOZO: What are the 7 different criteria that you have got there? 8 12195 MS JOLY: Are you asking specifically 9 about a regional project? 10 12196 COMMISSIONER CARDOZO: No. Just the 11 different items you had mentioned, such as regional. 12 12197 MR. TOTH: It might help in terms of 13 sort of putting into context this year how the licence 14 fee program operated because a distinctively Canadian 15 aspect of the program this year was a bonus up. It was 16 an incentive program to move up. 17 12198 What's interesting about it, I think 18 you may find interesting anyways -- I know I was 19 surprised -- is that 96 per cent of the projects that 20 have come in have requested the distinctively Canadian 21 bonus. In other words, we felt both as administration 22 and as a Board we raised the bar significantly this 23 year in terms of the fact that producers had 24 alternatives. 25 12199 They could come in this year either StenoTran 2586 1 under the normal eight out of ten guidelines or apply 2 under various circumstances for a distinctively 3 Canadian bonus. 4 12200 I am very pleased to say that both 5 producers and broadcasters seemed to have been able to 6 jump very significantly to that bar to the tune that we 7 are up in the 90 per cent. 8 12201 In terms of how it actually works and 9 applying for the bonus and the points, do you want to 10 run through them, if that would help the Commission. 11 They are in the guidelines. 12 12202 COMMISSIONER CARDOZO: Yes. 13 12203 MS JOLY: You want me to enumerate 14 the points in terms of distinctively Canadian. 15 12204 MR. TOTH: If you could, please. 16 12205 MS JOLY: We would ask projects -- we 17 ask projects that wanted to step up to the 5 per cent 18 for distinctively Canadian bonus. Those projects had a 19 number of choices that they could choose from to meet 20 that criteria, to meet the bonus criteria. We asked 21 the projects, depending on the genre, to meet three of 22 those criteria. 23 12206 For drama, children and 24 documentaries, we had set seven choices. Depending on 25 the complexity and the way the project presented itself StenoTran 2587 1 that allowed producers to work and find a way to meet 2 these criteria, the project would have to be ten out of 3 ten in terms of Canadian contents. 4 12207 Secondly, it could be primarily shot 5 in Canada. Thirdly, it could be based on Canadian 6 history, a Canadian event or issue, or an actual 7 Canadian individual. 8 12208 If you were drama, it could be based 9 on a book, a comic book, a short story, manuscript, 10 newspaper, theatrical feature, film, outline or 11 treatment or original script. If it was based on any 12 one of those, it had to be written by a Canadian. 13 12209 If you were a children's program, it 14 could be based on a book, comic book, short story, 15 manuscript, newspaper, magazine, journal, article, 16 theatrical feature film, outline, written by a 17 Canadian. 18 12210 If you were a documentary, it could 19 be based on an original concept, based on a Canadian 20 outline, written by the Canadian. 21 12211 Finally, we presented the option of 22 the seventh point which asked that the productions 23 director, principal screen writer and all other writers 24 be residents of Canada for income tax purposes. 25 12212 As you see, there were seven options. StenoTran 2588 1 Amongst them, as Garry said, the vast majority of our 2 projects could meet those. 3 12213 We had separate criteria for 4 performing arts. Would you like me to go on? They are 5 in our guidelines. There are separate criteria for 6 variety. 7 12214 COMMISSIONER CARDOZO: Yes. We can 8 get those. 9 12215 MS JOLY: Those were the principals 10 that we were looking for. 11 12216 COMMISSIONER CARDOZO: I guess I am 12 just sort of wondering whether there is a way in which 13 in this whole bunch of things you are looking at 14 whether the reflection of diversity can account for a 15 titch somewhere along the way. 16 12217 MR. STURSBERG: Can I just make one 17 last point on what she just said? 18 12218 COMMISSIONER CARDOZO: Yes. 19 12219 MR. STURSBERG: What we are going to 20 do now with those tests, whereas they were bonus-up 21 criteria in the last round, we are now going to turn 22 them essentially into threshold tests, but we are 23 conscious of the fact that there are issues associated 24 with these kind of threshold tests for different genre 25 producers, for example to the animators. StenoTran 2589 1 12220 I know it has been discussed at some 2 length. One of the things I just did want to say was 3 that we have had very extensive discussions with the 4 animators about their particular concerns. We have had 5 very extensive discussions with everybody. 6 12221 I myself had a meeting with the 7 animators and François and Garry have talked to them in 8 detail. I think we understand their issues very 9 clearly as to how it is that we are going to be able to 10 deal with them in the context of these kinds of 11 changes. 12 12222 That's the nature of the shift that 13 we are in the process of doing, moving from bonusing up 14 to a threshold shift, but we are now trying to just 15 make sure that we do that in a way that reflects the 16 realities of the animators and children's producers' 17 work. 18 12223 COMMISSIONER CARDOZO: Lastly, just a 19 quick question. To what extent do you folks relate to 20 the other funds out there, like the Harold Greenberg 21 funds and others? Do all the funds talk to each other 22 from time to time and talk about how things are going 23 or what the priorities are? 24 1715 25 12224 MR. TOTH: As best as we can manage. StenoTran 2590 1 I used to manage the Alberta Motion Picture Development 2 Corporation and at that time it was critical that all 3 funders in the industry -- and Telefilm was very good 4 at this, as were the other both privately-regulated 5 funds and the provincial funds in terms of working 6 together in as much of a coordinated way as possible. 7 It didn't mean that we met together and squirrelled 8 away in a meeting room and wrote all of our guidelines 9 to absolutely interface impeccably. 10 12225 Indeed, I don't think the system 11 would like that because one of the things that the 12 industry likes is that they have a number of doors to 13 knock upon and certainly we recognize the significance 14 of this Fund, in every slight direction we take, the 15 ripple-out effect that it has on the industry. What we 16 want to work in is in a complementary way with other 17 funders, but not that we are all so meshed together 18 that we are only financing absolutely one kind of 19 project. I think that the industry would like other 20 doors and other defined programs to knock on. 21 12226 COMMISSIONER CARDOZO: Thanks very 22 much. 23 12227 Thanks, Madam Chair. 24 12228 THE CHAIRPERSON: So, the meshing is 25 not as important as between the funds as it is as StenoTran 2591 1 between the regulator and the Fund maybe is what we 2 have seen. 3 12229 MR. TOTH: Well, I know two programs 4 that the meshing is very critical, having experienced, 5 and I think we will succeed and achieve that very well 6 this year. But, yes, each fund -- and it's very much 7 -- what we have done in terms of the branding efforts 8 this year in the new name and the new look and the new 9 processes and guidelines that we will be coming forward 10 with, each fund has been created with a mandate and we 11 are coming forward next year with what we think is a 12 very clear mandate. 13 12230 THE CHAIRPERSON: Mr. Stursberg, with 14 regard to the reflection of diversity -- and I guess 15 there are a number of ways to look at this. One is the 16 program, albeit very Canadian, not very reflective of 17 the real Canadian composition, depending on what the 18 program is about, if it's drama or -- so, you could say 19 this is more reflective of Canadian society than this 20 one. 21 12231 When you say "commission", you mean 22 at the broadcaster level when the first licence fee is 23 triggered. So, I would read you as saying if you want 24 this type of demand, the best way to achieve it is to 25 impose it on the broadcaster and then, presumably, in StenoTran 2592 1 discussions with the producer, he or she -- I am making 2 this very simplistic -- would pick this rather than 3 that because when the Commission takes the broadcaster 4 to task as to whether it reflected society as it is 5 with regard to the issue of diversity, that it was 6 doing it properly. I understand that's what you mean. 7 12232 You are looking at it from a 8 different angle. So, if the Commission wants to do 9 something about that, it can do it at the level of the 10 broadcaster. 11 12233 MR. STURSBERG: I think that's right 12 and, as Garry was mentioning, once you get through the 13 door, so to speak, the principal issues that confront 14 us are, in large measure, financial issues of one 15 variety or another. 16 12234 We are trying to simplify -- make 17 more transparent the financial processes and decision- 18 making rules and I think that it would be -- we want to 19 make the funds less arbitrary, we want to make them 20 more objective as much as we can and more transparent. 21 I think you are right. I think that the better course 22 is to impose the obligations at the commissioning level 23 rather than at the level of the Fund's financing 24 arrangements. 25 12235 THE CHAIRPERSON: And in some StenoTran 2593 1 circumstances that route may have the effect of 2 encouraging more regional production? 3 12236 MR. STURSBERG: Yes, it may well. 4 12237 THE CHAIRPERSON: Commissioner 5 Wilson? 6 12238 COMMISSIONER WILSON: Mr. Stursberg, 7 I want to ask you a question about the triggers because 8 we have heard from a number of independent producers 9 that the broadcaster's licence fees are dropping, 10 dropping, dropping and getting lower and lower and that 11 it seems much of this is driven by the fact that there 12 are certain trigger levels that have been established 13 by the Fund that the broadcaster has to give and so, 14 obviously, they are not going to give any more than 15 that. 16 12239 So, maybe between you and Mr. Toth 17 you can explain to me -- I mean you have independent 18 producers and broadcasters at the table at your board 19 meetings. So, where do the trigger levels come from? 20 12240 MR. STURSBERG: Well, Garry can tell 21 you the history of how the thresholds have gotten 22 struck, if that's of interest to you, but I would just 23 say again what I mentioned before. We had a very long 24 conversation for a number of months now about licence 25 fee thresholds, about the size of the top-ups that StenoTran 2594 1 should be available, about how all that should work, 2 and we are in the process now of concluding those 3 discussions. I think that once we conclude them, you 4 will find they go to the heart of many of these kinds 5 of questions that you are asking yourselves right now. 6 12241 COMMISSIONER WILSON: So, that's 7 another one that you want to defer? 8 12242 MR. STURSBERG: Yes, I would, 9 actually. I would, actually -- 10 12243 COMMISSIONER WILSON: To a future 11 discussion. 12 12244 MR. STURSBERG: -- if that's okay 13 with you. 14 12245 COMMISSIONER WILSON: I guess I am 15 struggling with this idea that the broadcaster can put 16 in, let's say, 15 per cent and then the Fund will 17 contribute an additional 30 per cent, so 45 per cent of 18 the budget comes from public funds. No, sorry, 45 of 19 the budget then comes from the broadcaster and the 20 public funds, so it's 200 per cent more than the 21 broadcaster is actually putting in. What's the notion 22 behind -- 23 12246 MR. STURSBERG: It would be more than 24 that. 25 12247 COMMISSIONER WILSON: Yes, it could StenoTran 2595 1 be. 2 12248 MR. STURSBERG: Because it may have 3 equity money in, it will have tax credit money in. So, 4 when you cascade up -- 5 12249 COMMISSIONER WILSON: Right. I am 6 just using that as a very simple example. 7 12250 MR. STURSBERG: Okay. 8 12251 COMMISSIONER WILSON: But what's the 9 notion of that? I am trying to understand. The 10 broadcasters don't -- maybe I am using one of these 11 linear examples that John Cassaday talked about this 12 morning that I like to use, but is it that the 13 broadcaster doesn't contribute as much in the licence 14 fee in order to trigger the public funds and that way 15 they can trigger more production across the board, so 16 the volume of production goes up? Is that the idea? 17 12252 MR. TOTH: Well, specifically, the 18 idea this year was in terms of from a programming fund. 19 We are focused on the kinds of programming that we 20 create where the increase is paid to the producers and 21 the licence fee top-up was incentives in terms of 22 achieving essentially policy goals in terms of the 23 distinctively Canadian. The extreme example of 40 or 24 45 per cent, you are talking about a regional dramatic 25 program -- StenoTran 2596 1 12253 COMMISSIONER WILSON: In French. 2 12254 MR. TOTH: -- in French, which I 3 think, in terms of volumes of those kinds of 4 productions, we wish we could see more, but it is the 5 extreme. I guess, to answer your question, what we are 6 trying to achieve here is policy goals in terms of the 7 distinctively Canadian. 8 12255 MR. STURSBERG: If I could just make 9 a comment about this, because this is terribly tricky, 10 how all these bits and pieces move around, the question 11 is: If you drop licence fees, do you get more Canadian 12 programming on or do you get less Canadian programming 13 on or less Canadian programming made? 14 12256 COMMISSIONER WILSON: Licence fees 15 from the broadcasters you are talking about? 16 12257 MR. STURSBERG: Right, but there is 17 different moving parts in this. There is how much are 18 they obliged to put on. There is how much money do 19 they have to commission programming, which is a 20 function of where the licence fees go. There is how 21 much they contribute; therefore, how easy it is to be 22 able to conclude your financing from the point of view 23 of making a program. So, all these parts kinds of 24 shift around with each other. You press on one and it 25 bounces out here. StenoTran 2597 1 12258 One of the issues, I think, that we 2 have been wrestling with and you may well end up 3 thinking about it is you can do these things one of two 4 ways. You can either set them so they are at a fixed 5 level. You say, "Boom, that's it, that's the level, 6 it's fixed." That's one way of doing it and that has 7 certain advantages; everybody knows what the number is. 8 It has disadvantages, which is that it's difficult then 9 for the system to adjust as the financial circumstances 10 of the broadcasting industry shift. 11 12259 As you know, the broadcasting 12 industry tends to be somewhat cyclical in character and 13 as different groups reflecting public demand improve 14 their position in the market and so on and so forth. 15 So, that's one way of doing it. 16 12260 The other way of doing it is to say, 17 no, you have to think about it in a more market-based 18 kind of way, where you say to yourself, "How do we 19 structure a market-clearing price with respect to the 20 valuation of this kind of money?" Those are two quite 21 different ways of doing it. In the past, it was done 22 on the basis of fixed percentages of one variety or 23 another, whether it was your original rules or the 24 rules that currently obtain within the organization, 25 within the Fund. StenoTran 2598 1 12261 As I say, the other way conceptually 2 of doing it is to say to yourself, "Can we create a 3 mechanism that will structure a market-clearing price?" 4 If you could do that, I think that would obviously be a 5 better thing to do, but it is very difficult to think 6 your way through the problem. 7 12262 So, one of the things that we have 8 been struggling with as a board is precisely how do we 9 make those trade-offs in a way where you maximize, as 10 Garry was saying, not only the level of Canadian 11 programming that you produce, but the flexibility of 12 the system to be able to respond as changes take place. 13 12263 I hope that's not too abstruse a 14 point. 15 12264 COMMISSIONER WILSON: I guess what I 16 am struggling with is the notion that far and away the 17 largest amount of money that goes into making most 18 Canadian programming is public money. 19 12265 MR. STURSBERG: Correct. Yes, that 20 has always been true. 21 12266 COMMISSIONER WILSON: I understand 22 that has always been true and I understand that there 23 are cultural objectives that we are trying to meet and, 24 as Laurier LaPierre said, he doesn't care how much it 25 costs. StenoTran 2599 1 12267 MR. STURSBERG: Well, others may, 2 though. 3 12268 COMMISSIONER WILSON: Others may have 4 a different opinion, but I am just wondering about 5 whether or not the broadcasters are putting in enough. 6 Are the other people who are putting in chunks of those 7 pies to finance these programs putting in enough? 8 12269 MR. STURSBERG: As I say, this issue 9 of what is the appropriate licence fee and how do we 10 structure our decision-making process with respect to 11 it is a very fundamental kind of question for us and we 12 have been struggling with it, like you. 13 12270 COMMISSIONER WILSON: And you will 14 want to talk to us about it later. 15 12271 MR. STURSBERG: Yes, I do very much 16 want to talk to you about it later. 17 12272 COMMISSIONER WILSON: I took the 18 words right out of your mouth. 19 12273 MR. STURSBERG: But I can't talk to 20 you about it. I would like to. 21 12274 COMMISSIONER WILSON: But you don't 22 have an answer. 23 12275 MR. STURSBERG: I think it would be 24 inappropriate. No, it's because the board hasn't 25 concluded and I am just here as their representative. StenoTran 2600 1 12276 COMMISSIONER WILSON: Well, at least 2 you will know what's on our mind when you do come to 3 talk to us, whenever that may be, and when you go back 4 to talk some more with your board. 5 12277 MR. STURSBERG: You may find it 6 reassuring that many of the questions you are asking 7 yourselves are questions that we have had to ask 8 ourselves. So, that's why I think that it will be -- I 9 am looking forward to a discussion because I think it 10 will be a very interesting discussion and I hope you 11 can benefit from some of our work on this as well. 12 12278 COMMISSIONER WILSON: And we hope you 13 can benefit from some of ours. 14 12279 MR. STURSBERG: We all hope we can 15 benefit from each other. 16 12280 COMMISSIONER WILSON: Just one big 17 happy family. 18 12281 Thank you, Madam Chair. 19 12282 THE CHAIRPERSON: One way that we 20 wouldn't have to see each other as much, of course, 21 would be to say, "We will require certain categories of 22 programming at certain hours of the day and a certain 23 number of hours and you, broadcaster, figure out how 24 you can spend enough and pressure the funds 25 sufficiently or do whatever you can to air programming StenoTran 2601 1 at that time that will keep your audiences." 2 12283 That would be another method where we 3 wouldn't have to cooperate or see each other as much, 4 wouldn't it, if the Commission were to not look at 5 spending and simply say we will demand a certain amount 6 of programming in certain categories in hours where you 7 can't afford not to put quality on? 8 12284 MR. STURSBERG: I hope you are not 9 asking me to comment on that. 10 12285 THE CHAIRPERSON: I am only asking 11 you to comment on whether that would mean you wouldn't 12 have to come and see us as often or us to invite you. 13 The problem is -- 14 12286 MR. STURSBERG: But we like to come 15 and see you. We would miss you. 16 12287 THE CHAIRPERSON: The problem is 17 spending requirements and then the attempt to get 18 access to money and how easy it is to coordinate these 19 two to achieve the respective goals. 20 12288 Counsel? And don't hesitate to take 21 me to task. 22 12289 MR. BLAIS: I wouldn't dare to break 23 what appeared to be a consensus between yourself and 24 Mr. Stursberg. 25 12290 THE CHAIRPERSON: You are much more StenoTran 2602 1 polite than me. 2 12291 MR. BLAIS: You mentioned November as 3 the date when -- the time frame within which you think 4 the board's final conclusions. Do you have a more 5 precise date? 6 12292 MR. STURSBERG: I can tell you where 7 we are in the process. I don't think anybody will 8 mind. We are having board meetings on the 19th of 9 October, at which time I hope that we will basically 10 conclude all these matters. In terms of finalizing the 11 framework -- because the changes we are making are 12 really fairly substantial and I hope we conclude those 13 on the 19th. 14 12293 Then what will happen is the process 15 of turning those into detailed guidelines. That, 16 obviously, is a much more -- you know, you have to 17 actually take the general agreements of the board and 18 translate them into text that people can use for the 19 purpose of making applications. That will take 20 probably another month or so and then we would hope to 21 have them out in November, the guidelines. 22 12294 Now, all that being said, if the 23 board can conclude on the 19th, I think I can say from 24 the board's point of view, we would be delighted to 25 come down and meet you and talk to you about what we StenoTran 2603 1 are doing. I think, in fairness, however, it would be 2 better if we could do that confidentially with the 3 Commission because we don't want to put the guidelines 4 out sort of half-baked, if you know what I mean. We 5 would like to have them out where everybody has a 6 chance to see them all at the same time. 7 12295 But if the Commission would like, we 8 would be happy to come down just as soon as we have 9 concluded the meetings on the 19th, if we can get 10 through it all. 11 12296 MR. BLAIS: The Commission is well 12 aware of decisional processes and itself likes to keep 13 its processes confidential when they are being made. 14 So, I wasn't pushing you to tell us what the decisions 15 were before they became public, I was just asking when 16 in November they would become public. 17 12297 MR. STURSBERG: But, as I say, we 18 would be happy, I think, to come down and talk to the 19 Commission about it and to take you through our 20 reasoning. We don't have any problem with that. We 21 would like to be as helpful as possible. 22 12298 MR. BLAIS: Thank you for the offer, 23 but I would be more interested in knowing when in 24 November -- 25 12299 MR. STURSBERG: We don't know. StenoTran 2604 1 Sometime in November, probably towards mid to late 2 November. 3 12300 MR. BLAIS: Thank you. 4 12301 Once that becomes public, I take it 5 that you would have no problem as to the exchanges 6 between yourselves and the Commission -- I don't know 7 what form it would take -- that it be given some sort 8 of transparency for other interested parties that might 9 be interested in what the exchanges might be between 10 the Commission and yourself, whether it's a procès- 11 verbal or a transcript or something. 12 12302 MR. STURSBERG: Yes, transcripts of 13 the discussion. I don't see any problem. 14 12303 MR. BLAIS: There is no reason that 15 at that point the discussions couldn't be transparent? 16 12304 MR. STURSBERG: No, that's fine, if 17 you would like to do it that way. We are at your 18 disposal to do it whatever way you would like. 19 12305 MR. BLAIS: Thank you. 20 12306 Those are my questions. 21 12307 THE CHAIRPERSON: Thank you, Mr. 22 Stursberg, Mr. Macerola, Mr. Toth, and all your 23 colleagues for beginning the weekend with us. 24 12308 We will now take a 10-minute break 25 and resume at 20 to 6:00. StenoTran 2605 1 --- Short recess at / Courte suspension à 1730 2 --- Upon resuming at / Reprise à 1745 3 12309 THE CHAIRPERSON: Madam Secretary, 4 please. 5 12310 MS BÉNARD: Thank you, Madam Chair. 6 12311 The next presentation will be by the 7 Writers' Union of Canada. I would invite Mr. Russell 8 Smith to make the presentation. 9 PRESENTATION / PRÉSENTATION 10 12312 MR. SMITH: Thank you. Let me thank 11 the Commission for giving me this opportunity to read 12 the text of a brief prepared by Jackie Manthorne, the 13 First Vice-Chair, who is unable to be with us today 14 because of a family emergency. 15 12313 The Writers' Union of Canada is a 16 registered national arts organization of nearly 1300 -- 17 we are growing -- professional book writers, united to 18 advance their common and collective interests and to 19 safeguard the freedom to write and publish. 20 12314 We strongly believe tha a broad and 21 fundamental review of the CRTC's policies relating to 22 television cannot take place without the input of one 23 of television's major players -- Canadian writers. 24 12315 Canadian writers are the often 25 invisible underpinnings of Canadian television. They StenoTran 2606 1 create the text and screenplays on which television 2 programming is based, from news to drama, from 3 educational and public affairs shows. They provide 4 cultural content and context through author interviews, 5 readings and debates about art, politics and 6 literature. They present Canada to Canadians from 7 diverse points of view. They explain us to ourselves 8 and interpret regional, cultural, racial and gender 9 differences, among others. 10 12316 Their works of fiction are 11 transformed into movies or weekly series. Their non- 12 fiction writing forms the basis of documentaries and 13 public interest programming. Without writers, 14 television would be mute. 15 12317 The Friends of Canadian Broadcasting 16 has pointed out that the average 12-year old Canadian 17 child has spent twice as much time in front of the 18 television as she has spent in school; has watched more 19 than 9,000 hours of American fiction programs -- much 20 of it violent in nature; that local television 21 programming is being abandoned and viewers left with 22 increasingly stale presentations, often produced with a 23 central Canadian perspective; and that private 24 broadcasters' investment in Canadian entertainment 25 programs has increased by only 1 percent during the StenoTran 2607 1 past five years. 2 12318 Profits during the same period are up 3 by more than 50 percent. 4 12319 In addition, the CBC's ability to 5 provide news, information and public affairs 6 programming from the regions has been substantially 7 reduced due to budget cuts. These cuts have also 8 decreased the CBC's capacity to produce high-quality 9 cutting edge drama, music and dance and variety 10 programs that reflect the geographic, cultural, racial, 11 ethnic and linguistic diversity of Canada. 12 12320 When considered in this light, the 13 Commission has set forth an extremely ambitious vision. 14 12321 The Writers' Union of Canada 15 recognizes that rapid restructuring is taking place in 16 the broadcasting environment, not only in Canada but 17 globally. This restructuring includes the licensing of 18 new Canadian pay and specialty services, ownership 19 consolidation, the growth of large, multi-station 20 conglomerates, and increased domestic and international 21 competition. 22 12322 As creators, we encourage the free 23 passage of literature and culture across borders, while 24 recognizing that our identity as Canadians is dependent 25 on maintaining a strong and vibrant Canadian dependence StenoTran 2608 1 in the arts, including television. 2 12323 The success of the industry in 3 strengthening this presence will depend on regulations 4 being maintained and strengthened and on a concerned 5 and determined effort by all players: the Commission, 6 networks, government, funders, independent producers 7 and creators. 8 12324 This can only happen if all players 9 agree that the development of Canadian culture is 10 essential. 11 12325 Canada was the first western nation 12 to formally recognize the vital position of the creator 13 in society. In 1992, our Parliament passed the Status 14 of the Artist Act, which affirms the primary role of 15 the artist in developing Canada's culture and 16 sustaining our nation's quality of life. 17 12326 It also recognized -- and I quote: 18 "...that artistic creativity is 19 the engine for the growth and 20 prosperity of dynamic cultural 21 industries in Canada." 22 12327 This is as true of television as it 23 is of dance, music, literature, the visual arts and 24 design. 25 12328 With respect to Canadian content StenoTran 2609 1 regulations, since the Commission's definition of a 2 Canadian program forms the basis of its policy and 3 regulatory framework for television, the Union believes 4 that it is essential that Canadian content regulations 5 be reinforced to stimulate the production of quality 6 Canadian programming. 7 12329 Some of the key objectives of the 8 Broadcasting Act call on the broadcasting system to 9 contribute in an appropriate manner to the creation and 10 presentation of Canadian programming and to make 11 maximum use and in no case less than predominant use of 12 Canadian creative and other resources in the creation 13 and presentation of programming. 14 12330 Without going into great detail, the 15 Commission assesses productions, excluding news and 16 public affairs programs produced by licensees, for 17 accreditation by using, among other criteria, a point 18 system based on the citizenship of individuals filling 19 key creative positions. 20 12331 The producers and all those 21 fulfilling producer related functions and major and 22 minor performers must be Canadian. The amounts paid to 23 Canadians for services provided to make the program on 24 post-production and on lab processing in Canada are 25 also taken into consideration. StenoTran 2610 1 12332 However, there are no definitions for 2 some key creative personnel, including directors, 3 writers, choreographers, and on-line and off-line 4 editors. Because of the importance of all creative 5 personnel in the production of Canadian culture, as 6 portrayed on television, and especially writers, the 7 Union believes it is essential that definitions be 8 developed for all creative personnel to avoid confusion 9 and misunderstandings. 10 12333 The Union also suggests that the 11 definition of a Canadian program includes the 12 stipulation that production companies be wholly or 13 majority owned and controlled by Canadians; and in case 14 of co-ventures, that the equity stake or profit sharing 15 arrangement remain at 50-50. 16 12334 In the case of series, the Union does 17 not recommend recognition for episodes which do not 18 meet Canadian content requirements. 19 12335 As well, the Union suggests that the 20 requirement that 75 percent of remuneration be paid to 21 Canadians in live action productions be applied to 22 animated productions, currently at 65 percent. 23 12336 What is prime time? As set out in 24 the regulations, licensees must achieve a yearly 25 Canadian content level of 60 percent overall and 50 StenoTran 2611 1 percent between 6 p.m. and midnight. The CBC must 2 ensure that 60 percent of its entire schedule consists 3 of Canadian programs. 4 12337 However, real prime time -- that is, 5 peak viewing hours -- is from 7 p.m. to 11 p.m. Anyone 6 who watches television soon realizes that, with the 7 exception of the CBC and certain specialty channels, 8 the time period between 7 p.m. and 11 p.m. is mainly 9 filled with American-produced dramas and situation 10 comedies. 11 12338 It is clear that many television 12 stations and networks are fulfilling their 50 percent 13 prime time Canadian content requirement by showing news 14 programming from 6 p.m. to 7 p.m. and from 11 p.m. 15 until midnight. That leaves one additional hour of 16 Canadian programming to be aired during peak viewing 17 hours. 18 12339 If the CRTC is serious about 19 encouraging Canadian expression and in ensuring that 20 Canadian television viewers have the opportunity to see 21 Canadian programs, then the Union believes that the 22 definition of "prime time" must be changed from 6 p.m. 23 to midnight to 7 p.m. to 11 p.m. 24 12340 The Commission recognizes that 25 Canadian drama, variety, children's and documentary StenoTran 2612 1 programs are under-represented on television. The 2 Union encourages independent producers and broadcasters 3 to consider making use of the plethora of books and 4 plays written by Canadian writers and playwrights by 5 adapting them to produce television dramas, children's 6 and documentary programs. 7 12341 The Union also recommends that 8 funding be made available for the adaptation and to 9 production of such programming. Here I recognize that 10 we are underlining a recommendation of the Canadian 11 Writers' Guild, which we welcome very much. 12 12342 On the subject of diversity, the 13 Broadcast Act calls for the television sector to 14 provide a wide range of programming that reflects the 15 linguistic duality and multicultural and multi-racial 16 nature of Canadian society. 17 12343 An important part of ensuring 18 diversity is by requiring all local television stations 19 and large multi-station ownership groups and networks 20 to broadcast local and regional programming and news, 21 as well as national programming and news. 22 12344 Budget cuts to the CBC and other 23 national networks have resulted in less local news, 24 information and programming; and the Union believes 25 this must be stopped. StenoTran 2613 1 12345 Despite the introduction of a large 2 number of pay and specialty stations, the Union 3 recommends that local stations and networks not be 4 relieved of their obligation to provide programming 5 that meets the needs of cultural, linguistic and racial 6 minorities and aboriginal peoples, and to reflect 7 Canada's cultural diversity. 8 12346 While there are many more stations 9 with diverse programming than when the Act was written, 10 it should be remembered that not everyone has access to 11 pay television or to the specialty channels not carried 12 on basic cable television. Indeed, there are those who 13 cannot afford basic cable, and there are local and 14 regional differences in what stations are available. 15 12347 In conclusion and in summary, the 16 Writers' Union of Canada calls upon the CRTC to 17 recognize the importance of writers in the production 18 of television programming; to maintain and strengthen 19 Canadian content regulations; to modify prime time 20 directives so that Canadian programs form the basis of 21 all prime time programming; and to encourage 22 development in the under-represented sectors of drama, 23 variety, children's and documentary programs; and 24 finally, to ensure that all local stations and networks 25 carry Canadian programming that reflects the StenoTran 2614 1 geographic, cultural, racial, ethnic and linguistic 2 diversity of Canada. 3 12348 Thank you. That is the end of the 4 submission. 5 12349 I would try to answer your questions, 6 although I remind you that I am a local member of the 7 Union, living here in Ottawa, and a book writer, but 8 not a member of the directors of The Writers' Union of 9 Canada. 10 12350 So anything I might say would be a 11 personal opinion and not an official policy of The 12 Writers' Union. 13 12351 THE CHAIRPERSON: Thank you, Mr. 14 Manthorne. 15 12352 MR. SMITH: Mr. Smith. 16 12353 THE CHAIRPERSON: You are not Mr. 17 Manthorne. I apologize. 18 12354 MR. SMITH: Jackie Manthorne wrote 19 the submission. 20 12355 THE CHAIRPERSON: And she is a lady, 21 apparently. 22 12356 MR. SMITH: She is a lady. 23 12357 THE CHAIRPERSON: So this would be 24 more confusing than confusing you between your local 25 representation and your ability to speak for the entire StenoTran 2615 1 organization. I think I have gone beyond that. 2 12358 MR. SMITH: I'm not confused anyway. 3 12359 THE CHAIRPERSON: I apologize. You 4 probably corrected it at the beginning and I didn't 5 catch it. 6 12360 MR. SMITH: That is all right. 7 12361 THE CHAIRPERSON: Commissioner 8 McKendry, please. 9 12362 COMMISSIONER McKENDRY: Good 10 afternoon, Mr. Smith -- it is almost good evening. 11 12363 Thank you for appearing before us and 12 sharing your submission with us. 13 12364 I have a few questions, and I will 14 try to keep them of a general nature because, as you 15 have explained, you were not the author of this 16 particular submission. 17 12365 Perhaps you could explain a little 18 bit about your organization. What I understand is that 19 your organization is made up of book writers. 20 12366 Is it book writers, or would it 21 include people who write for periodicals as well? I 22 assume it does not include screen writers. 23 12367 MR. SMITH: There may be screen 24 writers and periodical writers as well, but one of the 25 requirements of membership is to have published a book. StenoTran 2616 1 12368 So yes, they are all book writers. 2 12369 COMMISSIONER McKENDRY: And as you 3 said, all published book writers. 4 12370 MR. SMITH: That is correct, yes. 5 12371 COMMISSIONER McKENDRY: The Writers 6 Guild of Canada appeared before us a little earlier. I 7 think you were here and listened to them. 8 12372 MR. SMITH: Yes. 9 12373 COMMISSIONER McKENDRY: One of the 10 areas that expressed to us was the issue of having more 11 Canadian books appear in film and on television, and so 12 on. 13 12374 I take it that is a matter that, as I 14 think you indicated in your oral comments to us, your 15 members would support. 16 12375 Are you aware of any particular steps 17 that you would like to see us take in order to help 18 bring that about, from your point of view? 19 12376 MR. SMITH: The only step that I know 20 we have taken is this step right here this evening. I 21 can refer your question to them and ask for further 22 information on that, if you want that to be sent. 23 12377 COMMISSIONER McKENDRY: There is an 24 opportunity in the proceeding to provide us with final 25 written comments. That might be something that your StenoTran 2617 1 members might want to deal with, if they do provide us 2 with final written comments. 3 12378 The other thing that the Writers 4 Guild talked about is that for each television station 5 broadcaster that we licensed, they would like to see us 6 put in place expectations with respect to the 7 development of Canadian programs so as to encourage the 8 broadcasters that we licensed to contribute in a 9 financial way to the development of Canadian programs. 10 12379 Is that something that would be of 11 interest to your membership as well? 12 12380 MR. SMITH: Yes, of course, 13 especially in as much as all across Canada we tend to 14 work -- we are in all of the regions, in terms of our 15 own opportunities, we would see this as a valuable step 16 to be taken. 17 12381 That sounds very selfish. But apart 18 from the -- our general belief in the interests of the 19 unity of Canada to -- 20 12382 I'm sorry, I am going to another 21 question now. 22 12383 If we are talking about local 23 programming, yes, we want to see it there because there 24 is work there for us. 25 12384 COMMISSIONER McKENDRY: I suppose to StenoTran 2618 1 the extent that we are interested in seeing more 2 Canadian literature ending up on our television sets, 3 it would be helpful for us to have some insight into 4 the state of health of book publishing in Canada today, 5 from the point of view of the people who write books. 6 12385 From your own perspective, what is 7 your assessment of that environment today? 8 12386 MR. SMITH: There is a great deal of 9 material being written, a great deal of very good 10 material, and it is being published. Canadians are 11 great readers, so the books are also being sold. 12 12387 I have just been involved with Word 13 on the Street here in Ottawa, which was a book and 14 magazine fair that took place in the Byward Market on 15 Sunday. And even I, being in the industry myself, was 16 impressed by the enthusiasm that is shown by the 17 public. 18 12388 Of course, this was going on at the 19 same time in Vancouver, in Toronto, in Halifax and in 20 Calgary. As far as I understand, they were all very 21 successful. That is only one indication. 22 12389 The book sellers could tell you, and 23 the publishers could tell you, that there is 24 enthusiasm. 25 1805 StenoTran 2619 1 12390 There's a lot of writing going on. 2 Not every aspiring writer gets published right away, 3 but certainly there's a great deal being published and 4 there's an awful lot of material out there. 5 12391 I'm thinking of the novels I have 6 read recently in the last year myself that would make 7 great television material. 8 12392 COMMISSIONER McKENDRY: One of the 9 issues that we deal with is shelf space for Canadian 10 programs on broadcasters and on cable systems and so 11 on. 12 12393 How is it today for Canadian authors 13 such as yourself in terms of getting shelf space for 14 Canadian books in bookstores? Is that something that's 15 an issue or a concern for you? 16 12394 MR. SMITH: Well, it is a concern for 17 me because I am not a well known author. I tend to 18 write regional books and my books go on the shelves up 19 and down the Ottawa Valley. If I were Pierre Berton or 20 Margaret Atwood, I would have no trouble getting my 21 books on the shelf. 22 12395 Writers do have problems with 23 persuading their publishers to get out and promote as 24 much as they would like them to do, and a lot of 25 writers find themselves doing the promotion themselves StenoTran 2620 1 getting on to bookshelves. 2 12396 Once the sellers of books are 3 approached, I don't think that is so much of a problem. 4 We have got some big booksellers like Chapters coming 5 in now. They seem to be bending over backwards to make 6 Canadian writers welcome. As a result, the independent 7 booksellers also are kind of getting together to match 8 the big houses. 9 12397 I can understand it. There's a 10 limited amount of television screen space. 11 12398 COMMISSIONER McKENDRY: Those were 12 the questions I had for you. I very much appreciate 13 you taking the time to come and meet with us. 14 12399 I understand your colleague has had a 15 death in her family and I would like you to extend our 16 sympathies to her. 17 12400 MR. SMITH: It is a crisis, a heart 18 attack in the family. That's the last I heard. I hope 19 it's not death. 20 12401 COMMISSIONER McKENDRY: If it isn't a 21 death, we are very pleased to hear that. We hope that 22 her family member recovers. 23 12402 MR. SMITH: Thank you. I will pass 24 that on to her. 25 12403 THE CHAIRPERSON: Commissioner StenoTran 2621 1 Cardozo. 2 12404 COMMISSIONER CARDOZO: Thank you, 3 Madam Chair. 4 12405 Mr. Smith, I just wanted to ask what 5 your area of writing is. 6 12406 MR. SMITH: I have one book of short 7 stories, one novel and one book of poetry which just 8 came out last month. 9 12407 COMMISSIONER CARDOZO: Is there any 10 genre that you focus on? 11 12408 MR. SMITH: My short stories are all 12 about -- the subtitle of the book, it's called 13 "Tripper's Tales" and the subtitle is "Myths and 14 Legends of the Ottawa Valley". I understand that it 15 has been catalogued under "myths and legends" although 16 I wrote them all myself. 17 12409 COMMISSIONER CARDOZO: Did you make 18 these up or were they there before you wrote them? 19 12410 MR. SMITH: No. I made them up. I 20 don't know if anybody is interested, they began on 21 canoe trips and ski trips into the Ottawa Valley where 22 I was travelling with young people. We would see 23 things and I would tell them cock and bull stories 24 about what they were seeing. 25 12411 COMMISSIONER CARDOZO: Do you think StenoTran 2622 1 there's a lot of -- if that's in the area of your 2 interest -- stories about the Ottawa Valley and stuff 3 in Eastern Ontario? Is there enough of that kind of 4 local story telling on television? 5 12412 MR. SMITH: Yes. 6 12413 COMMISSIONER CARDOZO: I think of 7 Wayne Rostad's show on CBC "On the Road Again". 8 12414 MR. SMITH: Yes, indeed. There is a 9 great deal, some of it even true. 10 12415 COMMISSIONER CARDOZO: I mean is it 11 on television? 12 12416 MR. SMITH: I think of Wayne Rostad 13 as well. 14 12417 COMMISSIONER CARDOZO: In the media 15 there used to be a woman who was a story teller. I 16 forget her name. 17 12418 MR. SMITH: Mary Cook. 18 12419 COMMISSIONER CARDOZO: Mary Cook, 19 right. But they canned her too. 20 12420 MR. SMITH: She's retired now. 21 12421 COMMISSIONER CARDOZO: Her interviews 22 anyhow, weekly interviews. 23 12422 MR. SMITH: Yes. There's room for 24 more of this kind of thing, I'm sure. They haven't 25 canned her mentor's show. I just want that on the StenoTran 2623 1 record. 2 12423 COMMISSIONER CARDOZO: What I just 3 want to ask you a little bit about. We haven't had 4 many people come and talk to us personally. They talk 5 more on behalf of associations. I just wonder if you 6 could also tell us any of your own personal reflections 7 on television as somebody who does writing and I 8 suppose does some thinking in these areas. 9 12424 Are there any particular channels 10 that reflect the kinds of things you like to see? 11 12425 MR. SMITH: I am partial to drama 12 myself. I find myself looking at a lot of English 13 drama. I look at TVO. 14 12426 COMMISSIONER CARDOZO: Yes. 15 12427 MR. SMITH: I probably shouldn't 16 mention it, but I also look at PBS sometimes if they 17 are running. 18 12428 COMMISSIONER CARDOZO: That's fine. 19 We always have to rise to the competition. If the 20 competition is better than us -- 21 12429 MR. SMITH: As a matter of fact, I 22 wrote to Bill Safe one time and said I'm not going to 23 send you any money because I now subscribe to TVO. He 24 wrote back a very nasty letter saying that TVO learned 25 half of what they know from PBS. I don't know how true StenoTran 2624 1 that is. 2 12430 I watch drama myself, wherever I can 3 find it. 4 12431 COMMISSIONER CARDOZO: Do you 5 subscribe to the specialty channels? 6 12432 MR. SMITH: I have the basic plus -- 7 I do have Arts and Entertainment. 8 12433 COMMISSIONER CARDOZO: Okay. 9 12434 MR. SMITH: The local channels here I 10 don't. 11 12435 COMMISSIONER CARDOZO: There's a bit 12 more focus on things like drama, history and that sort 13 of stuff. 14 12436 MR. SMITH: I don't have the History 15 channel. I didn't go for it. I don't have enough time 16 to watch television to make it worthwhile. 17 12437 COMMISSIONER CARDOZO: Okay. Well, 18 thanks very much. 19 12438 Thank you, Madam Chair. 20 12439 THE CHAIRPERSON: Mr. Smith, thank 21 you for visiting us. Can I ask you to make me a 22 promise? You won't write a short story about how an 23 Ottawa Valley girl mistook you for Ms Manthorne. 24 12440 MR. SMITH: No promises. Anybody 25 that talks to me is taking a chance. StenoTran 2625 1 12441 THE CHAIRPERSON: We thank you for 2 your participation. 3 12442 Please give Ms Manthorne our best. 4 12443 MR. SMITH: I will do that. 5 12444 Thank you. 6 12445 THE CHAIRPERSON: Thank you. 7 12446 Madam Secretary. 8 1815 9 12447 Mme BÉNARD: Merci, Madame la 10 Présidente. 11 12448 La prochaine présentation sera celle 12 de la Société des Auteurs, Recherchistes, 13 Documentalistes et Compositeurs, et je les inviterais à 14 s'avancer à la table. 15 12449 LA PRÉSIDENTE: Bonjour, messieurs... 16 ou bonsoir, messieurs. Allez-y quand vous êtes prêts. 17 PRÉSENTATION / PRESENTATION 18 12450 M. LÉGARÉ: Madame la Présidente, 19 Membres du Conseil, bonsoir. 20 12451 Il nous fait plaisir de comparaître 21 pour vous présenter le point de vue de la SARDeC sur 22 les questions soulevées dans l'Avis public 1998-44. 23 12452 Je suis Yves Légaré, directeur 24 général de la SARDeC. Je suis accompagné de Bernard 25 Montas, qui est auteur, membre du conseil comme StenoTran 2626 1 secrétaire du conseil et membre de l'exécutif de la 2 SARDeC. 3 12453 La SARDeC est l'association 4 représentative des auteurs de l'audiovisuel de langue 5 française. Les scénaristes de télévision et de cinéma, 6 en fiction comme en documentaire, sont à l'origine des 7 oeuvres qui ont fait le succès de la télévision et 8 marqué notre cinématographie. 9 12454 La télévision de langue française a 10 connu un grand succès au Canada à plusieurs égards. À 11 l'origine de ce succès se trouve la forte présence de 12 contenu canadien dans l'ensemble de la programmation et 13 aussi dans les émissions sous-représentées qui sont 14 scénarisées, soit les dramatiques, les émissions pour 15 enfants et les documentaires. 16 12455 Mais il y a encore place à 17 l'amélioration dans notre système de radiodiffusion, et 18 nous avons identifié cinq grandes questions qui 19 méritent d'être revues dans le cadre de votre examen de 20 politiques, soit le financement de la scénarisation la 21 présence des catégories sous-représentées sur nos 22 écrans, la place de la publicité à la télévision, le 23 rôle de Radio-Canada dans le système de radiodiffusion 24 et, enfin, le financement de la production de langue 25 française. StenoTran 2627 1 12456 On dit souvent que la télévision est 2 un médium de scénariste -- television is a writer's 3 medium -- et c'est vrai que l'écriture est au coeur des 4 émissions dans les catégories sous-représentées. 5 12457 L'écriture d'un scénario comprend la 6 conceptualisation d'une idée, l'écriture d'un 7 traitement, la création d'une bible dans le cadre d'un 8 projet de série, la construction d'un scène-à-scène 9 pour chaque épisode et, finalement, la création de 10 dialogues. Tout ceci doit avoir lieu avant le tournage 11 de l'émission. 12 12458 Or, l'auteur est rarement soutenu 13 financièrement lors des premières étapes du 14 développement d'un scénario. Ainsi, le système actuel 15 de financement favorise le développement de projets 16 télévisuels via les producteurs, privilégiant les 17 projets initiés par ces derniers plutôt que ceux des 18 créateurs et nuisant ainsi au foisonnement des idées et 19 aux approches nouvelles. 20 12459 Pour les étapes subséquentes du 21 développement du scénario, la part du scénariste est 22 souvent plafonnée et une bonne proportion de son cachet 23 n,est payable que lors du tournage, s'il y a lieu. 24 12460 Le CRTC peut avoir une incidence sur 25 le financement de la scénarisation. Par exemple, dans StenoTran 2628 1 le formulaire de renouvellement de licence du CRTC, les 2 réseaux et les stations de télévision sont obligés de 3 prendre des engagements financiers précis en matière de 4 développement des émissions dans les catégories sous- 5 représentées. À l'heure actuelle, il n'y a pas 6 suffisamment d'exigences de la part du CRTC à cet 7 égard. 8 12461 Le Conseil devrait s'assurer que les 9 réseaux et les stations de télévision de langue 10 française contribuent leur juste part au développement 11 des projets d'émissions dans les catégories sous- 12 représentées et que les fonds de développement soient 13 disponibles aussi bien aux auteurs qu'aux compagnies de 14 production. 15 12462 Les renouvellements de licence de 16 Radio-Canada, du réseau TVA, de CFTM-TV, Télé- 17 Métropole, prévus pour le printemps 1999 fournissent 18 une excellente occasion au Conseil d'augmenter les 19 engagements à ce chapitre. 20 12463 M. MONTAS: La SARDeC est d'accord 21 avec plusieurs mémoires soumis dans le cadre de cette 22 audience publique à l'effet que le CRTC devrait porter 23 plus d'attention aux émissions dans les catégories 24 sous-représentées aux heures de pointe. Ceci vaut pour 25 les émissions de langue française aussi bien que celles StenoTran 2629 1 de langue anglaise. 2 12464 Comme nous l'avons démontré dans 3 notre mémoire du 30 juin, sur l'ensemble des stations 4 conventionnelles de langue française du secteur privé, 5 la présence des émissions dans les catégories 7, 8 et 9 6 se compare assez bien à la présence de ces catégories 7 sur les stations de langue anglaise. Cependant, dans 8 son ensemble, la performance des dramatiques à la 9 télévision conventionnelle privée de langue française 10 du secteur se porte moins bien que sa contrepartie de 11 langue anglaise. En 1996-97, par exemple, selon les 12 données du CRTC, les stations privées de langue 13 anglaise ont diffusé une moyenne de 3,1 heures de 14 dramatiques originales entre 18 h 00 et minuit alors 15 que les stations privées de langue française n'ont 16 diffusé que 2,4 heures. 17 12465 Cette différence est attribuable au 18 très grand nombre d'émissions de variétés à la 19 télévision de langue française et à l'absence des 20 stations de TQS dans le domaine de la fiction. Nous 21 concluons que la présence de la fiction de langue 22 française pourrait être plus importante. 23 12466 Face à cette situation, nous 24 recommandons trois changements de politique qui ont 25 largement reçu appui dans le milieu de la production: StenoTran 2630 1 12467 Premièrement, toutes les stations 2 conventionnelles de langue française devraient être 3 obligées, par règlement ou par condition de licence, de 4 diffuser au moins 10 heures par semaine dans les 5 catégories 7, 8 et 9, ainsi que les documentaires, 6 entre 19 h 00 et 23 h 00, en première diffusion, avec 7 une attention particulière aux dramatiques. 8 12468 Deuxièmement, le documentaire devrait 9 être reconnu par le CRTC comme faisant partie des 10 catégories d'émissions sous-représentées et défini de 11 façon à permettre sa surveillance par le système 12 d'enregistrement des émissions du CRTC. 13 12469 Troisièmement, toutes les stations 14 conventionnelles de langue française devraient être 15 obligées de diffuser au moins trois heures par semaine 16 d'émissions canadiennes de grande qualité pour enfants, 17 en première diffusion. 18 12470 En somme, nous croyons que le Conseil 19 devrait porter plus d'attention aux émissions dans les 20 catégories sous-représentées aux heures de pointe, sans 21 pour autant changer la réglementation actuelle dans le 22 reste de la journée, à l'exception de celle touchant 23 les émissions pour enfants. 24 12471 Finalement, notons qu'il est 25 difficile de séparer la question des quotas et le StenoTran 2631 1 volume du contenu canadien de la question de la 2 définition même d'une émission canadienne. La SARDeC 3 privilégie un régime de huit points, tel qu'appliqué 4 par le Fonds canadien de télévision, comme définition 5 de base d'une émission canadienne. Nous estimons aussi 6 que la présence d'un scénariste canadien doit faire 7 partie intégrante de toute définition d'une émission 8 canadienne scénarisée qui est accréditée par le CRTC ou 9 par le Bureau de certification des produits 10 audiovisuels canadiens du ministère du Patrimoine, avec 11 une exception pour les coproductions officielles. 12 12472 La place de la publicité à la 13 télévision. 14 12473 La publicité fait vivre la 15 télévision. Elle est essentielle à presque tous les 16 services conventionnels et spécialisés et, plus 17 particulièrement, aux services conventionnels privés. 18 Mais en même temps les pauses publicitaires influencent 19 fortement le format et le contenu des émissions, telle 20 la structure d'une dramatique ou d'un documentaire, par 21 exemple. 22 12474 Pour cette raison, il est très 23 important que le CRTC maintienne des balises en ce qui 24 concerne l'usage de la publicité et l'empêche 25 d'empiéter davantage sur le terrain de l'écriture et de StenoTran 2632 1 la production des émissions. 2 12475 Nous recommandons fortement au CRTC 3 de maintenir le plafond du temps publicitaire à 12 4 minutes et d'appliquer les règlements actuels. Ceci 5 voudrait dire que les messages publicitaires en pleine 6 émission sous forme de textes superposés, tels que ceux 7 de Loto-Québec par exemple, devraient être 8 comptabilisés comme de la publicité et soustraits des 9 12 minutes permises. 10 12476 De plus, comme nous l'avons indiqué 11 dans notre mémoire du 17 août dernier au sujet de 12 l'accréditation des émissions canadiennes, les 13 infopublicités ne font aucune contribution aux 14 objectifs de la Loi sur la radiodiffusion. La SARDeC 15 s'oppose fermement à l'accréditation des infopublicités 16 comme émissions canadiennes. 17 12477 Nous nous préoccupons du financement 18 et du sort du radiodiffuseur public national. Nous 19 croyons que le sous-financement de Radio-Canada 20 l'empêche de rencontrer tous les objectifs de son 21 mandat, l'induit dans des pratiques commerciales 22 inappropriées pour une télévision d'état, et nuit au 23 développement de la dramaturgie canadienne de langue 24 française. 25 12478 La SARDeC est aussi en désaccord avec StenoTran 2633 1 l'Association canadienne des radiodiffuseurs et 2 d'autres intervenants dans ce processus qui visent à 3 confiner Radio-Canada dans un rôle de complémentarité 4 au secteur privé. Nulle part dans la Loi sur la 5 radiodiffusion est-il question que Radio-Canada joue un 6 tel rôle. Au contraire, le rôle de Radio-Canada est 7 clairement défini dans la section 3 de la Loi, que vous 8 connaissez bien. 9 12479 La SARDeC croit que Radio-Canada 10 devrait renforcer son rôle en tant que producteur, 11 aussi bien que diffuseur, de dramatiques, d'émissions 12 pour enfants et de documentaires de qualité. 13 12480 Plus particulièrement, le CRTC 14 devrait trouver les moyens d'encourager la SRC à 15 produire davantage de dramatiques à l'interne. Pour 16 les auteurs, travailler avec un télédiffuseur interne, 17 que cela soit à Radio-Canada ou à TVA, peut permettre 18 une grande liberté créatrice et une pluralité des 19 contenus. Les producteurs/diffuseurs ont fait une 20 contribution importante à notre patrimoine audiovisuel 21 et ont développé une expertise à l'interne que nous ne 22 trouvons pas ailleurs. Il est important de renforcer 23 cette tradition, qui a grandement bénéficié au 24 répertoire dramatique et aux auditoires canadiens. 25 12481 Le financement gouvernemental des StenoTran 2634 1 émissions et du cinéma de langue française est une 2 nécessité au Canada. Comme nous l'avons démontré dans 3 les graphiques 4 et 5 de notre mémoire du 30 juin, les 4 gouvernements canadiens contribuent environ deux-tiers 5 du financement des émissions produites par le secteur 6 indépendant de langue française dans les catégories 7 sous-représentées, et plus de 80 pour cent du 8 financement des oeuvres cinématographiques. Sans cette 9 aide, les émissions de télévision et le cinéma d'ici, 10 de grande qualité, ne pourraient pas exister. 11 12482 Il est important que le CRTC envoie 12 le message aux gouvernements que le financement 13 gouvernemental des émissions et du cinéma de langue 14 française demeure une nécessité pour les années à venir 15 à cause de la petite taille du marché au Québec et au 16 Canada. 17 12483 Au sujet des règles d'accès aux fonds 18 de financement de la production, nous sommes en 19 désaccord avec la SRC quand elle propose le 20 resserrement des règles du Fonds canadien de télévision 21 pour réduire la place des émissions pour enfants et les 22 documentaires auprès du Programme des droits de 23 diffusion. Ces catégories d'émission demeurent sous- 24 représentées sur nos écrans et continuent de mériter 25 une aide financière au même titre que les dramatiques. StenoTran 2635 1 12484 En guise de conclusion, Madame la 2 Présidente et Membres du Conseil, la SARDeC croit qu'un 3 rôle actif de la part du CRTC dans la réglementation du 4 système canadien de radiodiffusion est encore 5 primordial. 6 12485 Ceci termine notre présentation 7 formelle. Nous sommes reconnaissants d'avoir eu 8 l'occasion de nous exprimer au sujet des politiques qui 9 régissent la télévision canadienne et il nous ferait 10 plaisir maintenant de répondre à vos questions. 11 12486 LA PRÉSIDENTE: Merci, Monsieur 12 Légaré et Monsieur Montas. 13 12487 Vos recommandations semblent endosser 14 les recommandations de l'APFTQ qui visaient la 15 télédiffusion de langue anglaise, mais vos 16 recommandations visent le marché francophone. 17 12488 M. MONTAS: Absolument. 18 12489 M. LÉGARÉ: Oui. Vous parlez sans 19 doute du 10 heures que nous suggérons? 20 12490 LA PRÉSIDENTE: Oui, du 10 heures, 21 des catégories sous-représentées, de l'aspect 22 dramatique et de la comparaison que vous faites entre 23 le secteur anglophone et le secteur francophone à cet 24 effet, qui me semblent à prime abord un peu 25 surprenantes. StenoTran 2636 1 12491 Qu'est-ce que vous entendez par 2 "dramatiques" quand vous comparez la performance de la 3 télévision anglophone et de la télévision francophone à 4 cet effet? 5 12492 M. LÉGARÉ: On parle des téléromans, 6 des séries dramatiques, et caetera. Le problème, dans 7 le fond, ce qui fait que les chiffres sont 8 particulièrement défavorables au système de 9 radiodiffusion francophone, c'est entre autres 10 l'absence de TQS dans le champ des dramatiques. Donc, 11 si nous regardons les chiffres, au niveau des variétés, 12 dans les catégories, donc, sous-représentées, variétés, 13 musique et danse, et dramatiques, la performance du 14 système francophone semble intéressante; si on la 15 compare, c'est près de six heures versus un peu moins 16 de quatre heures pour les réseaux anglophones. Si nous 17 allons de façon plus pointue pour les dramatiques, 18 l'absence de TQS en dramatiques fait que nous 19 descendons en bas de ce qui se diffuse dans les 20 stations privées de langue anglaise. 21 12493 De là peut-être notre suggestion pour 22 que nous passions, donc, à un 10 heures. Déjà, dans 23 les catégories sous-représentées, le réseau francophone 24 atteint six heures ou presque. Nous pensons qu'il 25 pourrait assurément aller vers le 10 heures, d'autant StenoTran 2637 1 plus que, si nous regardons les saisons de diffusion 2 qui ont servi à ces chiffres, on s'aperçoit que les 3 saisons de diffusion de diffusions originales sont de 4 plus en plus courtes. Nous avons des saisons de 26 5 semaines; l'été nous avons des reprises, des émissions 6 américaines, et caetera. 7 12494 Si nous regardons la performance des 8 oeuvres canadiennes, à contenu canadien, elles sont 9 excellentes durant l'année, les saisons automme-hiver, 10 alors que dans les 20 premières émissions on retrouve 11 toujours des émissions canadiennes, mais lorsque nous 12 regardons l'été on voit que les émissions américaines 13 reprennent le dessus parce qu'elles sont largement 14 diffusées. 15 12495 Donc c'est pour ça que nous suggérons 16 de passer à 10 heures au niveau des catégories sous- 17 représentées, et cela aurait sans doute une incidence 18 aussi sur les dramatiques, qui augmenteraient. 19 12496 LA PRÉSIDENTE: Comment avez-vous 20 préparé les graphiques que nous avons à la page 8? 21 J'en ai deux, moi; j'en ai un qui a été corrigé et qui 22 démontre la présence des catégories 7, 8 et 9 en 1996- 23 97 et présence des dramatiques en 1996-97. 24 12497 Je ne comprends pas très bien l'effet 25 de TQS. Est-ce que vous avez regardé combien d'heures StenoTran 2638 1 sont accessibles à l'auditoire? Comment avez-vous fait 2 vos calculs, si par exemple vous regardez ce qui est 3 disponible comme contenu canadien et comme contenu 4 dramatique à Montréal pour un auditoire plutôt qu'à 5 Toronto? 6 12498 M. LÉGARÉ: C'est calculé à partir 7 des chiffres du CRTC. 8 12499 LA PRÉSIDENTE: Oui, mais comment 9 avez-vous... ces graphiques-là, vous les avez faits 10 vous-mêmes. 11 12500 M. LÉGARÉ: Oui, effectivement. Les 12 stations privées francophones sont donc le réseau TQS 13 et TVA, et les stations anglophones, c'est CTV, Global, 14 City-tv, CHCH, stations affiliées, c'est à partir, 15 donc, des chiffres du CRTC pour ces stations privées 16 francophones et anglophones que nous en arrivons à ces 17 chiffres... 18 12501 LA PRÉSIDENTE: Et le calcul a été 19 fait comme si vous avez additionné ce qui est 20 accessible en dramatiques chez Global, City dans ces 21 heures-là... 22 12502 M. LÉGARÉ: Et on a fait une moyenne 23 par la suite. 24 12503 LA PRÉSIDENTE: Oui, au lieu de... 25 ah, oui. Parce que si vous aviez calculé TVA, croyez- StenoTran 2639 1 vous qu'il y aurait une ville anglophone où il y 2 aurait... 3 12504 M. LÉGARÉ: TVA fait effectivement 4 beaucoup plus que 2,4 heures... 5 12505 LA PRÉSIDENTE: D'accord. 6 12506 M. LÉGARÉ: ... mais le fait que TQS 7 ne diffuse aucune dramatique fait que... 8 12507 LA PRÉSIDENTE: Oui. C'est parce que 9 vous l'avez incluse, oui. 10 12508 M. LÉGARÉ: ... pour la disponibilité 11 de dramatiques francophones au Québec il y en a moins 12 dans l'ensemble que dans le secteur anglophone. 13 12509 LA PRÉSIDENTE: Alors, si on 14 obligeait toutes les stations à faire le nombre 15 d'heures que vous exigez, TVA ne serait sans doute pas 16 affectée. Probablement qu'ils seraient... 17 12510 M. MONTAS: Probablement pas. 18 12511 LA PRÉSIDENTE: Non, parce qu'eux 19 auraient plus de 10 heures. C'est que là, on inclurait 20 TQS, on exigerait la même chose de TQS. 21 12512 M. LÉGARÉ: C'est-à-dire, si on parle 22 d'un 10 heures, par la suite la ventilation avec les 23 dramatiques, là je pense que ce serait peut-être dans 24 les conditions de licences particulières ou dans les 25 attentes que ce serait déterminé... StenoTran 2640 1 12513 LA PRÉSIDENTE: Oui, je comprends 2 bien vos recommandations. C'est simplement que je 3 trouvais assez surprenant... normalement on dit au 4 Québec que TVA, par exemple, dans ces catégories-là, 5 dépasse de beaucoup n'importe quelle station anglophone 6 privée. 7 12514 M. MONTAS: C'est vrai qu'on a 8 tendance à croire que, du côté francophone, il se 9 produit beaucoup plus de dramatiques que du côté 10 anglophone et que... 11 12515 LA PRÉSIDENTE: Non, mais c'est parce 12 que vous, vous le faites par ratio. Si on regarde la 13 station TVA, c'est vrai. 14 12516 M. MONTAS: C'est le nombre d'heures. 15 12517 M. LÉGARÉ: Mais même si on regarde 16 TVA, la saison de diffusion à TVA est de plus en plus 17 vers le 26 semaines. Or, les semaines d'été, il n'y a 18 pas une présence des dramatiques aussi forte. TVA 19 diffuse énormément de dramatiques pendant la saison 20 automne-hiver, mais l'été cette présence-là est 21 beaucoup moins forte. 22 12518 LA PRÉSIDENTE: Oui, ce qui est 23 l'inverse souvent des stations anglophones, qui 24 diffuseraient leurs dramatiques l'été, quand personne 25 ne regarde. StenoTran 2641 1 12519 M. LÉGARÉ: Les dramatiques ont un 2 succès incontesté au Québec. 3 12520 LA PRÉSIDENTE: Oui, au Québec. 4 C'est pour ça que vos graphiques, j'étais curieuse de 5 savoir comment vous aviez fait ça, parce que ça va à 6 l'inverse de ce qu'on entend ou croit normalement quand 7 on considère la performance de TVA additionnée à celle 8 de Radio-Canada à Montréal. Mais je comprends 9 maintenant comment vous arrivez à ces chiffres-là. 10 12521 Quel serait l'effet sur TQS de tout à 11 coup exiger 10 heures par semaine dans les catégories 12 sous-représentées avec un accent sur les dramatiques et 13 une exigence aussi, je crois, de trois heures 14 d'émissions canadiennes de grande qualité pour enfants? 15 Est-ce que c'est une recommandation qui serait viable? 16 12522 M. LÉGARÉ: il faudrait regarder pour 17 chacune des demandes de façon plus particulière. Il 18 est sûr que TQS, qui n'a aucune dramatique et qui 19 diffuse moins dans les catégories sous-représentées, la 20 commande serait beaucoup plus grande. Il faudrait, 21 lorsque le renouvellement de licence de TQS arrivera, 22 que nous étudiions de façon plus spécifique ces 23 questions-là. 24 12523 Notre position est une remarque 25 globale sur un nombre d'heures qui est quand même, nous StenoTran 2642 1 croyons, atteignable en général puisqu'ils sont déjà à 2 six heures en moyenne. 3 12524 LA PRÉSIDENTE: Même si on inclut 4 TQS. 5 12525 M. LÉGARÉ: Oui. En catégories sous- 6 représentées, donc les catégories 7, 8 et 9, TQS et T-M 7 ensemble, ça donne une moyenne de 5,8 heures. Donc ils 8 font plus de variétés que de dramatiques, mais TQS 9 n'aurait pas à partir de 0 pour aller à 10; TQS part 10 déjà de 6 en moyenne. 11 12526 LA PRÉSIDENTE: Évidemment, un de vos 12 intérêts principaux... je regarde le paragraphe 24, 13 quand on considère les gens que vous représentez dans 14 l'industrie, vous voudriez qu'on hausse l'aide 15 financière directe aux auteurs et que le CRTC peut 16 jouer un rôle important à travers le renouvellement de 17 licence. 18 12527 Vous avez dans votre soumission 19 écrite, et vous avez relevé la même chose aujourd'hui, 20 que le Conseil demande dans son formulaire de 21 renouvellement ce que les radiodiffuseurs font. Ce que 22 vous voudriez, c'est que le Conseil ait des exigences 23 quand la performance n'est pas adéquate, ce qui est 24 presque tout le temps à votre avis, et que, au lieu de 25 simplement leur demander ce qu'ils font, c'est StenoTran 2643 1 d'exiger. 2 12528 Comment entrevoyez-vous cette 3 exigence? Ce serait un pourcentage d'argent? Quels 4 efforts voudriez-vous que le Conseil exige dans ce 5 domaine-là? 6 12529 M. MONTAS: Là, vous parlez du 7 financement du développement? 8 12530 LA PRÉSIDENTE: À votre paragraphe 24 9 vous dites: 10 "Pour augmenter le nombre et la 11 qualité des scénarios de langue 12 française..., il faut hausser 13 l'aide financière directe aux 14 auteurs... le CRTC peut jouer un 15 rôle important à travers les 16 renouvellements de licence..." 17 12531 Et vous soulevez justement la 18 question 9.5 dans les formulaires de renouvellement. 19 12532 Qu'est-ce que vous entendez par "le 20 Conseil devrait exiger quelque chose à cet effet des 21 télédiffuseurs"? 22 12533 M. LÉGARÉ: À l'heure actuelle, je 23 pense que, hormis TQS, qui devait dépenser 50 000 $ je 24 pense pour les dramatiques, il y a peu d'exigences en 25 matière de développement. Ce que nous disons au StenoTran 2644 1 Conseil à ce stade-ci, c'est qu'il devrait y en avoir. 2 12534 Quelles seraient ces exigences 3 particulières? On se réserve peut-être la possibilité 4 d'intervenir sur les demandes précises des 5 radiodiffuseurs lors de leur renouvellement, parce 6 qu'il faut voir bien sûr, si TQS doit dépenser 50 000 $ 7 en dramatiques, combien devra dépenser TVA. On devra 8 analyser ça par rapport aux revenus d'entreprise, par 9 rapport aux dépenses de l'entreprise, et caetera. 10 12535 Donc on ne peut pas fixer de règle 11 globale précise qui s'appliquerait à tous présentement. 12 On préférerait regarder lors des renouvellements de 13 licence les différentes conditions et vous revenir. 14 12536 Ce qu'on voulait peut-être ici 15 souligner, c'est l'intérêt qu'il y aurait à ce que le 16 Conseil s'occupe de la chose et pose des questions aux 17 radiodiffuseurs lors de cesdits renouvellements. 18 12537 LA PRÉSIDENTE: Pour stimuler les 19 dramatiques, même s'il y a des exigences vis-à-vis 20 toutes les catégories sous-représentées, vous 21 recommandez que le Conseil fasse un effort spécifique 22 vis-à-vis les dramatiques. Est-ce que vous avez pensé 23 à des méthodes, justement, des incitatifs tels que, par 24 exemple, un crédit majoré, dont on parle souvent, où le 25 calcul serait majoré quand c'est une dramatique StenoTran 2645 1 canadienne qui est diffusée aux heures de grande 2 écoute? 3 12538 M. LÉGARÉ: Nous n'avons pas étudié 4 ce genre de disposition. Généralement, les crédits 5 majorés, pour nous, lorsqu'une émission est diffusée, 6 on ne voit pas l'incidence que ça peut avoir jusqu'à 7 présent, le fait que par exemple certaines aient un 8 crédit de 150 pour cent. Au niveau du système de 9 radiodiffusion francophone, il y a un intérêt pour les 10 radiodiffuseurs à diffuser des dramatiques; je pense à 11 TVA, je pense à Radio-Canada. Ils les diffusent aux 12 heures de grande écoute en saison automne-hiver et ils 13 les diffusent encore parce que ça va susciter des cotes 14 d'écoute intéressantes. 15 12539 Je ne sais pas si ce serait alléchant 16 pour TQS, ce genre de mesure-là. On n'a pas étudié 17 cette question-là. On voudrait peut-être davantage 18 revoir le dossier de TQS pour voir qu'est-ce qu'il 19 pourrait faire pour augmenter son rendement en termes 20 de dramatiques. 21 12540 LA PRÉSIDENTE: Je crois que vous 22 endossez l'idée de l'APFTQ que les sous-représentées 23 soient aux heures de grande écoute, particulièrement 24 entre 7 h 00 et 11 h 00... 25 12541 M. LÉGARÉ: Oui. StenoTran 2646 1 12542 LA PRÉSIDENTE: ... ce qui pourrait 2 changer l'allure de la télévision conventionnelle 3 francophone accessible au Québec assez dramatiquement 4 si nous avions 10 heures de certaines catégories à ces 5 heures très précises. 6 12543 M. MONTAS: Ce qui pourrait changer 7 de façon dramatique, vous dites? 8 12544 LA PRÉSIDENTE: Non, ça pourrait 9 changer l'allure de l'accès à la télévision. On aurait 10 TQS qui ferait ça aussi. 11 12545 M. MONTAS: Ça donnerait une offre 12 peut-être plus importantes dans les catégories sous- 13 représentées de contenu canadien. 14 12546 LA PRÉSIDENTE: Et l'allure de la 15 télévision à ces heures-là pourrait changer assez 16 dramatiquement. 17 12547 M. MONTAS: Je pense que ça la 18 bonifierait, parce qu'il y a quand même des émissions d 19 catégories sous-représentées, mais on aurait une offre 20 plus importante. Ça bonifierait la télévision 21 actuelle. 22 12548 LA PRÉSIDENTE: Maintenant, quand 23 vous parlez du besoin des réseaux et des stations de 24 télévision de langue française de contribuer leur juste 25 part au développement des catégories sous-représentées, StenoTran 2647 1 c'est dans l'optique de, par exemple, obliger TQS à en 2 faire, et caetera. 3 12549 Vous parlez de juste part en exigeant 4 que chaque station ait 10 heures de catégories... 5 12550 M. LÉGARÉ: Non. C'était davantage 6 mettre des fonds à la disposition des auteurs et des 7 maisons de production pour développer des projets. 8 12551 LA PRÉSIDENTE: Et vous ne pensez pas 9 que ça viendrait naturellement de l'exigence d'en 10 diffuser davantage? Vous voudriez des exigences 11 spécifiques vis-à-vis les auteurs... 12 12552 M. LÉGARÉ: Pour qu'il y ait des 13 fonds de développement et que ces fonds-là soient 14 accessibles aux auteurs, ce qu'ils ne sont pas 15 présentement. 16 12553 LA PRÉSIDENTE: En revenant à la 17 fameuse question 9.5, vous voudriez que ça aille plus 18 loin puis qu'il y ait des exigences particulières à cet 19 effet... 20 12554 M. LÉGARÉ: Oui. 21 12555 LA PRÉSIDENTE: ... plutôt que 22 simplement une question... ou que les exigences soient 23 majorées ou plus hautes que celles que le Conseil 24 aurait pu établir jusqu'à maintenant. Par exemple, 25 vous avez mentionné le 50 000 de TQS, qui n'est pas une StenoTran 2648 1 juste part à votre avis. 2 12556 M. LÉGARÉ: Qu'il faudrait étudier; 3 c'est-à-dire que d'autres n'ont pas ces exigences-là. 4 TQS avait cette exigence-là. On ne sait pas quel est 5 le rendement que ça a pu donner, mais d'autres n'ont 6 même pas ces exigences-là. 7 12557 Nous, on vous dit que dans chaque cas 8 il faudrait voir quels sont les fonds de développement 9 que le réseau devrait rendre accessibles. Ça peut être 10 50 000, ça peut être davantage; ça peut varier selon la 11 situation du réseau. 12 12558 LA PRÉSIDENTE: Est-ce que vous 13 trouvez qu'il y a trop d'émissions de variétés en ce 14 moment? 15 12559 M. MONTAS: La question n'est pas de 16 savoir s'il y en a trop... 17 12560 LA PRÉSIDENTE: Mais c'est qu'il n'y 18 a pas assez de dramatiques. 19 12561 M. MONTAS: Voilà. Je pense qu'il 20 n'y aura jamais trop d'émissions à contenu canadien... 21 12562 LA PRÉSIDENTE: Oui, je comprends. 22 Ma question ne vous aidait peut-être pas beaucoup, mais 23 il reste quand même qu'il y a tant d'heures entre 24 7 h 00 et 11 h 00, et il y a d'autres parties qui 25 disent justement qu'il n'y a pas assez d'émissions de StenoTran 2649 1 variétés, et vous, ce sont les dramatiques qui vous 2 intéressent. Mais il y a quand même un nombre d'heures 3 assez défini. Malheureusement, le Conseil n'a pas le 4 pouvoir d'allonger la soirée. 5 12563 Alors c'est un équilibre que vous 6 voudriez plus poussé vers les dramatiques. 7 12564 M. LÉGARÉ: Oui, mais c'est aussi 8 pour contrer une tendance. Vous dites qu'il y a tant 9 d'heures effectivement dans une soirée, mais il y a 52 10 semaines dans l'année. Auparavant, les contrats pour 11 une dramatique étaient de 39 semaines; l'été était donc 12 limité à 13 semaines. Maintenant, l'été, c'est 26 13 semaines. Pourtant, la température ne nous donne 14 pas... 15 12565 LA PRÉSIDENTE: C'est el ni¤o, ça. 16 12566 M. LÉGARÉ: C'est ça, probablement. 17 12567 Donc cet impact-là est important. On 18 dirait que les saisons de diffusion de productions 19 originales se rétrécissent, et peut-être qu'il y a 20 d'autres moyens de faire en sorte qu'en bout de piste, 21 en moyenne, il y ait plus d'heures de dramatiques qui 22 soient diffusées. 23 12568 LA PRÉSIDENTE: Vous parlez de la 24 nécessité d'avoir de la programmation pour enfants de 25 haute qualité. Pouvez-vous m'indiquer quels sont les StenoTran 2650 1 critères pour vous qui mesurent la qualité de la 2 programmation des enfants? Généralement, est-ce que 3 vous êtes d,avis qu'en ce moment la programmation pour 4 enfants qui est diffusée en général n'est pas de haute 5 qualité? 6 12569 M. LÉGARÉ: Non, il y a des 7 productions de qualité mais il y a aussi beaucoup 8 d'émissions à petit budget où tant les auteurs que les 9 comédiens que les producteurs doivent se débrouiller 10 avec des moyens très réduits. Il y a beaucoup de 11 rediffusions aussi. 12 12570 Nous, ce que nous souhaitons, c'est 13 qu'il y ait trois heures en première diffusion dans les 14 réseaux conventionnels parce que souvent, dans les 15 canaux spécialisés, qui ne sont pas nécessairement 16 regardés par tous... il y a quand même 30 pour cent de 17 personnes au Québec qui n'ont pas le câble; donc il y a 18 des enfants qui n'ont pas accès à ces émissions, et en 19 plus ces émissions sont rediffusées constamment. 20 12571 Donc on pense que les stations 21 conventionnelles doivent diffuser des émissions et 22 doivent mettre des moyens, c'est-à-dire des budgets de 23 production adéquats pour avoir des émissions d'une 24 certaine qualité, autre chose qu'un seul comédien 25 devant un décor; donc un peu plus de moyens que ce StenoTran 2651 1 qu'on a présentement. 2 12572 LA PRÉSIDENTE: En première 3 diffusion, pour vous, c'est...? 4 12573 M. LÉGARÉ: C'est la politique 5 actuelle du CRTC. 6 12574 LA PRÉSIDENTE: Alors vous ne seriez 7 pas d'accord avec l'idée qu'un programme pourrait être 8 diffusé, par exemple, sur un service spécialisé et que 9 ce soit quand même première diffusion à la 10 conventionnelle? 11 12575 M. LÉGARÉ: Non. Pour nous, c'est... 12 12576 LA PRÉSIDENTE: Même quand il s'agit 13 de la programmation pour enfants, qui, censément, 14 regardent la télévision... peuvent voir les mêmes 15 programmes plus souvent que... 16 12577 M. LÉGARÉ: Mais on parle de trois 17 heures, donc, en première diffusion, et par la suite, 18 s'ils vont au-delà de trois heures, je pense, aux 19 canaux spécialisés pour enfants, ils vont sûrement en 20 diffuser davantage. Mais on pense que trois heures en 21 première diffusion serait tout à fait acceptable. 22 12578 LA PRÉSIDENTE: C'est raisonnable. 23 12579 M. LÉGARÉ: C'est d'ailleurs une 24 exigence, je pense, qui aux États-Unis a été... 25 12580 LA PRÉSIDENTE: Oui. StenoTran 2652 1 12581 M. LÉGARÉ: ... mise sur pied pour 2 des émissions éducatives en plus. 3 12582 Donc là, on ne parle pas d'émissions 4 éducatives, on parle d'émissions pour enfants qui 5 peuvent être éducatives ou ne pas l'être; ça, là- 6 dessus, on a... 7 12583 LA PRÉSIDENTE: Ce qui semble avoir 8 aidé les producteurs canadiens à vendre leurs produits 9 aux États-Unis. 10 --- Courte pause / Short pause 11 12584 LA PRÉSIDENTE: Voilà. Nous vous 12 remercions, Messieurs Montas et Légaré, d'avoir débuté 13 votre fin de semaine avec nous, comme les gens qui vous 14 ont précédés. Nous regrettons qu'il soit si tard et 15 nous vous remercions de votre patience, d'avoir 16 attendu. 17 12585 Est-ce que vous rentrez à Montréal ce 18 soir? 19 12586 M. MONTAS: Oui, bien sûr. 20 12587 M. LÉGARÉ: Oui, on va rentrer ce 21 soir. 22 12588 LA PRÉSIDENTE: Bon voyage. 23 12589 M. MONTAS: Nous vous remercions 24 aussi de nous avoir écoutés. 25 12590 M. LÉGARÉ: Merci bien. StenoTran 2653 1 12591 LA PRÉSIDENTE: Nous sommes surtout 2 reconnaissants que vous ayez si patiemment attendu. 3 12592 M. LÉGARÉ: Bonne fin de semaine. 4 12593 LA PRÉSIDENTE: Merci beaucoup. 5 12594 Voilà pour aujourd'hui. Nous 6 reprendrons demain matin à 9 h 00 avec M. Baines. We 7 will start at nine o'clock tomorrow morning with 8 Mr. Baines. 9 12595 We will see you in the morning. 10 --- Whereupon the hearing adjourned at 1847, 11 to resume on Saturday, October 3, 1998 12 at 0900 / L'audience est ajournée à 1847, 13 pour reprendre le samedi 3 octobre 1998, 14 à 0900 15 16 17 18 19 20 21 22 23 24 25 StenoTran
- Date modified: