TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
CBC LICENCE RENEWALS /
RENOUVELLEMENTS DE LICENCES DE LA SRC
HELD AT: TENUE À:
Place du Portage Place du Portage
Conference Centre Centre de conférence
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
May 31, 1999 Le 31 mai 1999
In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.
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.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Public Hearing / Audience publique
CBC LICENCE RENEWALS /
RENOUVELLEMENTS DE LICENCES DE LA SRC
BEFORE / DEVANT:
Françoise Bertrand Chairperson of the
Commission, Chairperson /
Présidente du Conseil,
Andrée Wylie Commissioner / Conseillère
David Colville Commissioner / Conseiller
Barbara Cram Commissioner / Conseillère
James Langford Commissioner / Conseiller
Cindy Grauer Commissioner / Conseillère
Joan Pennefather Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Nick Ketchum Hearing Manager /
Gérant de l'audience
Carolyn Pinsky Legal Counsel /
Alastair Stewart Conseillers juridiques
Diane Santerre Secretary / Secrétaire
HELD AT: TENUE À:
Place du Portage Place du Portage
Conference Centre Centre de conférence
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
May 31, 1999 Le 31 mai 1999
- ii -
TABLE OF CONTENTS / TABLE DES MATIÈRES
Presentation by / Présentation par:
English TV network 1986
Hull (Québec) / Hull, Quebec
--- L'audience reprend le lundi 31 mai 1999
à 0908/ Upon resuming on Monday,
May 31, 1999 at 0908
8811 LA PRÉSIDENTE: Alors, bonjour à vous tous. Je n'ose pas dire que j'espère que vous avez passé un bon dimanche! J'imagine que vous avez continué à travailler!
8812 Alors, je demanderais à madame Santerre de nous parler des étapes que nous entamons ce matin, s'il vous plaît.
8813 MADAME SANTERRE: Merci, madame la présidente.
8814 Alors, ce matin, nous débuterons la journée avec Radio-Canada, qui vous présentera la réplique aux interventions francophones que nous avons entendues la semaine dernière, évidemment, et pour poursuivre plus tard avec la présentation de la demande du réseau de Newsworld.
8815 Alors, monsieur, la parole est à vous.
8816 LA PRÉSIDENTE: Avant de commencer, je m'excuse, le conseiller légal avait un document à déposer que vous nous avez apporté ce matin pour mettre au dossier public concernant les projets de...
8817 Me. STEWART: Merci, madame la présidente.
8818 Oui, simplement pour vous informer que Radio-Canada a déposé auprès du Conseil une liste des projets de rayonnement de la Radio française de Radio-Canada et ce, conformément à son engagement à l'intérieur de cette instance, et ce document sera versé au dossier public très bientôt.
8819 Merci, madame la présidente.
8820 LA PRÉSIDENTE: Merci. La parole est à vous. Bonjour.
8821 M. BEATTY: Bonjour, et merci, madame la présidente et mesdames et messieurs les commissaires.
8822 J'aimerais tout d'abord vous répéter à quel point que nous sommes fiers de notre bilan au cours des dernières années, bilan réalisé dans un contexte de coupures budgétaires sévères.
8823 Je suis particulièrement heureux du soutien et de la confiance renouvelée du public à l'endroit de la Société Radio-Canada, comme le démontre un sondage du printemps dernier dans lequel les Canadiens nous accordent un taux d'appréciation de près de 90 pour cent pour les réalisations de son mandat.
8824 Tout le long de la semaine dernière, nous avons entendu les questions et les interrogations du CRTC quant à la mission du service public qu'est la nôtre.
8825 Nous voulons ici réitérer notre détermination à remplir cette mission envers la population canadienne en continuant de faire appel à l'audace, la créativité et l'innovation, tout cela sous le sceau de la qualité, du professionnalisme et de la crédibilité qui ont toujours fait notre marque.
8826 Nous profiterons maintenant de l'occasion qui nous est offerte de reprendre certaines propositions ou interrogations qui ont été présentées par divers intervenants au cours des derniers jours.
8827 Juste avant de céder la parole à nos vice-présidents des services français, j'aimerais offrir quelques commentaires concernant la publicité.
8828 I want to deal, Madam Chair, with an issue that was raised by a number of people, some of whom represented organizations with a direct commercial interest in the issue of advertizing on CBC.
8829 I want to be very clear about the issue because it is an issue of considerable importance for the Corporation, as it is to all Canadians and certainly to you.
8830 In the past four years, CBC has had to overcome a 414 million dollar a year financial challenge, and we've done so with great success, canadianizing our schedules, increasing our services, not closing stations but actually increasing our services and adding new services, and winning record numbers of awards for quality in our programming.
8831 The Corporation today is more efficient than ever before in its history. That success at dealing with that massive 414 million dollar challenge, Madam Chair, should not mask the fact that the reductions were real and that we're today extracting maximum value from every single penny that we receive.
8832 Now, there should be no confusion about it. Any reduction in our advertizing revenues that's not offset by a commensurate increase in the parliamentary appropriation would be a further cut to the CBC and would affect our ability to deliver services mandated by Parliament through the Broadcasting Act.
8833 I'd note that over my tenure as President, over the course of the past four years, our advertising revenues have provided the single most stable source of funding. It's important to point out that during that period, we have had to deal with hundreds of millions of dollars of reduction in the parliamentary appropriation.
8834 This past year, we found that the rules of access to the Canadian Television Fund were changed. It may have a significant impact upon our ability to access the Fund, to use it to procure programming for the CBC for both of our English and French services.
8835 The single most stable source of funding that we've had over the past four and a half years has in fact been the revenues which we've generated from advertizing.
8836 Earlier, on the first day under questioning, I indicated that -- and our vice presidents underscored the point, and I would repeat it again -- that we take our decisions based on mandate, based on what we feel is appropriate. We took a decision which I believe was courageous, to Canadianize English television, despite the fact that we recognized that could have a serious impact potentially upon our advertizing revenues.
8837 We did it because it was right, because we felt that now was the time to do it, even faced with all of those financial challenges. And that will continue to be the case. We will do what we believe is appropriate under our mandate to enable us to discharge our obligations to Canadians without being driven by considerations of how do we maximize commercial revenues?
8838 What I want to stress to you as well is one of the reasons why we've had as much flexibility as we have in being able to take decisions that have allowed us to not only meet in most cases the undertakings that we've made to the Commission, but to exceed them in many cases, has in fact been the stability that we've been able to find in advertizing revenues, and that's been something which has been very important to us.
8839 Any traumatic reduction in our advertizing revenues would have a traumatic effect upon our ability to deliver our mandated services and programs.
8840 Finally, the question was often raised about how the Canadian public views the issue of advertizing on the CBC. Do they feel that it's incompatible with the role of a public broadcaster to have advertizing on the airwaves? Do they believe it contaminates our programming in some way or that our news programs are in some way beholden to commercial interests as a result of it?
8841 I would simply draw the Commission's attention to the survey which was presented to the Commission by the Friends of Canadian Broadcasting which asked COMPAS to conduct a survey of public opinion in Canada, and in an open-ended question where Canadians were asked how should the CBC's role in the presentation of Canadian programming be different than that of other broadcasters?
8842 Respondents were able to respond in any way that they chose, to list their priorities and what they felt was important and delineating the difference between CBC programming and that of other broadcasters.
8843 What came out repeatedly, most strongly were issues related to our Canadian nature: more Canadian content, 18 per cent; programs reflecting Canadian culture, 12 per cent; more regional local focus, 12 per cent; and so on.
8844 The issue of fewer commercials was indeed mentioned. It was issue number 16. Three per cent of respondents cited less commercials as something which they felt was the key defining factor differentiating programming on CBC from other broadcasters.
8845 So I think it's important to keep in mind the views of Canadian on the subject as well, but I think, Madam Chair, that if Canadians were asked the question "Do you believe that it is appropriate to seek for the CBC, which has commercial value in its programming, to seek to diversify its sources of funding as opposed to relying solely upon contributions from the taxpayer?", we would probably find a very interesting result from Canadians as well.
8846 So it's an issue that we will want certainly to discuss with you more fully. I give you the assurance that our goal is to achieve our mandate in the most efficient and effective way and that commercials will not drive our schedules. But I want to be very clear in terms of the importance of the revenue that we've generated, some 300 million dollars a year which are being generated from commercial revenue.
8847 Madame la présidente, je cède la parole à madame Michèle Fortin, notre vice-présidente de la Télévision française.
8848 MADAME FORTIN: Merci.
8849 Avant de débuter, j'aimerais remercier les gens qui sont venus nous témoigner leur appui, tout particulièrement les artisans et artisanes de la télévision, les artistes, les auteurs, les producteurs et bien sûr, nos employés!
8850 Nous avons pris bonne note des interventions de l'APFTQ, de la SARDEQ, de l'Union des artistes, de CINAR, Avanti, madaame Lorraine Pintal et tous les autres qui ont à coeur le rôle de Radio-Canada comme télédiffuseur public.
8851 Ce que nous avons entendu, c'est un soutien à nos quatre axes forts que sont l'information, les dramatiques, la jeunesse et la culture. C'est un désir que Radio-Canada peut jouer un rôle de leader, tant par l'ampleur de l'ordre de programme que par la qualité. C'est un soutien à une télévision généraliste, forte, pertinente et populaire.
8852 Certaines interventions ont aussi montré l'inquiétude que plusieurs ressentent face à l'avenir de la Société en raison de ce qui est perçu comme une remise en question de son rôle et des limites qu'on semble vouloir lui imposer.
8853 Vous me permettrez d'ailleurs de répondre aux interventions du secteur privé qui ont été les plus radicales à ce sujet.
8854 Nous ne sommes pas dupes, pas plus que le CRTC, d'ailleurs, nous en sommes convaincus, des motivations de la télévision privée quand ils réclament que le CRTC impose à Radio-Canada des conditions extrêmement contraignantes tout en se défendant de ne pas vouloir la marginaliser ou la restreindre.
8855 À la lumière de leur mémoire, on a l'impression que la télévision privée aurait besoin d'être protégée de la télévision publique et que la présence de Radio-Canada les empêche de croître ou de faire des profits.
8856 Inutile de dire que dans le cas de TVA, cette profitabilité a été spectaculaire, que la valeur de son titre en bourse a crû de 550 pour cent au cours des dernières années.
8857 Quant à TQS, elle atteint maintenant un niveau de rentabilité dans une niche de marché auprès d'un auditoire qu'elle dispute non pas à Radio-Canada mais à TVA.
8858 Un télédiffuseur voudrait que vous adoptiez son cahier de charge pour dicter nos choix de contenu. L'autre voudrait que vous vous retiriez du marché publicitaire pour lui laisser toute la place. On peut d'ailleurs s'étonner de votre le Conseil du patronat et l'Association des manufacturiers prendre la même position sur la question des revenus publicitaires alors que plusieurs de leurs membres annonceurs bénéficient certainement d'avoir plus qu'un télédiffuseur fort pour le marché.
8859 On peut aussi se demander quelle peut être la motivation de ces associations lorsqu'elles appuient les propositions les plus radicales des télévisions privées si ce n'est de s'en prendre une fois de plus au secteur public.
8860 Nous tenons à le rappeler que ces mêmes télévisions privées bénéficient largement de fonds publics pour produire leurs émissions.
8861 Enfin, on peut leur poser la même question que leur adresser un chroniqueur ce weekend. En échange de la disparition de la publicité à Radio-Canada, êtes-vous prêt à renoncer à toute injection de fonds publics dans le privé?
8862 La notion de complémentarité citée à plusieurs reprises dans leur mémoire suggère en fait d'asservir la mission de Radio-Canada aux priorités du secteur privé. L'Association des manufacturiers va même jusqu'à parler d'un rôle subsidiaire, à savoir un concept selon lequel Radio-Canada ne ferait que ce que le secteur privé refuse de faire.
8863 Ces propositions, loin d'être rassurantes pour l'intérêt public, mettent en lumière l'importance au nom même de cet intérêt de préserver la force d'un réseau qui sert de lien social et qui contribue par sa production et ses investissements à l'essor de la culture francophone au Canada.
8864 Je vous rappelle le rôle clé que joue Radio-Canada à l'égard de l'innovation, du risque et de l'émergence de nouveaux talents ont souligné plusieurs intervenants.
8865 C'est en maintenant la force de l'antenne (nous le répétons) et en préservant une télévision généraliste de qualité qu'on peut s'assurer que Radio-Canada pourra continuer à jouer ce rôle essentiel.
8866 Nous voulons vous réitérer notre conviction que ce n'est pas à la télévision privée de fixer les conditions de licence de Radio-Canada mais bien plutôt au CRTC.
8867 D'ailleurs, nous n'avons pas l'intention de répondre à tous les arguments invoqués par les télévisions privées pour limiter ou remettre en question le rôle de Radio-Canada. Certains arguments contenus dans les études soumises à l'appui de leurs mémoires sont parfois si exagérés ou farfelus qu'ils ne méritent pas qu'on s'y attarde.
8868 Je vous en cite un seul exemple et c'est la proposition tirée de l'étude jointe au mémoire de TVA suggérant que Radio-Canada ne puisse produire ou diffuser d'émissions qu'après s'être assurée qu'au moins deux diffuseurs privés n'y soient intéressés. Les choix de programmation de Radio-Canada seraient donc décidés et sa grille établie par ses concurrents. Quelle bonne façon de maintenir une télévision de qualité!
8869 En fait, les conditions arbitraires suggérées dans ces études sont telles qu'aucun gestionnaire ne pourrait les rencontrer dans les conditions actuelles du marché des droits de diffusion ou du marché publicitaire.
8870 Sur la question de la concurrence déloyale, je tiens à répéter qu'en tant qu'organisation publique, nous sommes soumis à des critères stricts de gestion et d'éthique commerciale. De même, nous souscrivons aux plus hauts standards de qualité quant à notre programmation, ceci s'appliquant à nos acquisitions de films ou d'émissions étrangères.
8871 Sur la question plus spécifique des tarifs publicitaires, soyons clairs. Nous ne contribuons pas à une baisse des tarifs dans le marché francophone. Au contraire, et d'ailleurs, nous avons déposé une étude sur notre tarification qui le démontre.
8872 Ayant fait ces remarques vis-à-vis des propositions exprimées par nos concurrents, nous voulons répondre aux questions et préoccupations légitimes des autres intervenants qui nous ont exprimé cette semaine.
8873 Nous avons également entendu les demandes du CRTC et de sa présidente afin de définir des indicateurs de rendement. Ainsi, nous vous proposons ce qui suit:
8874 En matière de contenu canadien, pour toute la durée de la licence, nous maintiendrons un niveau de 75 pour cent sur l'ensemble de la journée et conserverons une moyenne de 80 pour cent d'émissions canadiennes entre 19h00 et 23h00. Cela constituera notre engagement de base, notre plancher, mais nous visons un objectif plus ambitieux à long terme qui pourrait être équivalent ou supérieur à nos meilleures performances durant la précédente période de licence.
8875 Dans le cas des émissions jeunesse, nous avons voulu amorcer une discussion sur la diversité et la pertinence de certains types d'émissions à notre antenne. Le message que nous avons reçu a été clair. Nous nous engageons à maintenir notre niveau d'émissions pour la jeunesse à 20 heures par semaine et à ce que 60 pour cent de ces émissions soient canadiennes.
8876 Radio-Canada s'engage de plus à rechercher la qualité et la pertinence de son offre jeunesse.
8877 Dans le cas des dramatiques canadiennes, nous nous engageons à diffuser sept heures de dramatique par semaine en moyenne, dont cinq heures trente en moyenne par semaine sur une base annuelle dans la période de 19h00 à 23h00.
8878 Nous croyons toutefois que le niveau de 10 heures par semaine de dramatique qui était notre objectif à long terme ne traduit pas la diversité que nous désirons avoir dans notre grille. En effet, si nous excluons le "Téléjournal" et "Le Point", il ne nous reste que 22 heures de pointe par semaine. C'est donc près de la moitié de notre grille qui y serait consacré. C'est pourquoi nous croyons qu'un niveau de huit heures par semaine comme objectif à atteindre à long terme serait raisonnable.
8879 Lors de la dernière licence, nous avions comme unique indicateur de rendement en terme de mission culturelle une attente par rapport aux arts d'interprétation. Mais nous le savons tous, les arts d'interprétation, tels que décrits dans nos engagements, ne sont qu'une partie de l'expression culturelle. En ce sens, nous rejoignons l'intervention de l'ADISQ vis-à-vis les grandes émissions de variété que nous envisageons de produire dès l'an prochain.
8880 Nous nous engageons à:
8881 - présenter en heures de grande écoute, entre 19h00 et 23h00, au moins 18 prestations intégrales ou presque intégrales par année d'un spectacle d'une source d'arts d'interprétation canadienne ou d'artistes canadiens populaires ou classiques;
8882 - investir 20 millions de dollars sur une période de cinq ans dans le cinéma canadien, dont 15 millions en investissement, développement et diffusion et l'équivalent de cinq millions de dollars en promotion du cinéma canadien;
8883 - diffuser des émissions de magazine d'information et de promotion de la culture canadienne;
8884 - déployer des efforts particuliers pour trouver de nouveaux artistes, leur accorder du temps d'antenne et contribuer à promouvoir leur carrière;
8885 - continuer de présenter des documentaires spécialisés sur les arts, les artistes ou la culture en général, comme Riopel, Le phénomène hip-hop, Osias Leduc, Comme l'espace et le temps, Joyeux anniversaire, Sol, et cetera.
8886 Nous nous sommes également engagés à réduire de moitié la présentation de films américains d'ici la fin de la prochaine période de licence.
8887 L'APFTQ fait le souhait que Radio-Canada diffuse davantage de documentaires provenant du secteur de la production indépendante. À cet égard, nous nous engageons à présenter 18 documentaires canadiens. Tous seront diffusés en heures de grandes écoute et proviendront du secteur de la production indépendante.
8888 Pour ce qui est du sous-titrage, soyez assurés que nous viserons à nous améliorer tant au plan de la quantité que de la qualité et à maintenir des relations de collaboration avec les usagers représentés par le Regroupement québécois pour le sous-titrage.
8889 Madame la présidente, comme vous pouvez le constater, Radio-Canada désire renforcer les secteurs clé de son mandat tout en demeurant une télévision généraliste forte, pertinente et populaire.
8890 Je demanderai maintenant à Micheline Vaillancourt de faire ses commentaires à l'égard des interventions portant sur les stations régionales.
8891 MADAME VAILLANCOURT: Permettez-moi tout d'abord de remercier toutes les personnes et organismes qui, d'un bout à l'autre du pays, ont écrit au Conseil et exprimé leur attachement à la télévision régionale de Radio-Canada.
8892 Je ne peux pas les nommer tous. J'aimerais simplement vous citer quelques noms qui illustrent bien la diversité et la richesse de nos appuis et témoignent d'une présence francophone dynamique au Canada: le Collège universitaire de Saint-Boniface; Le Cercle Molière de Winnipeg; l'Association canadienne-française de l'Alberta; le Festival de musique baroque de La Mecque; les Éditions d'Acadie; Franco-jeunes de Terre-Neuve et du Labrador; le Centre culturel français de l'Okanagan; le Conseil économique du Nouveau-Brunswick; la Société des jeux de l'Acadie; la Galerie du Nouvel Ontario.
8893 Je remercie également les représentants de la Fédération des communautés francophones et acadiennes du Canada; de la Société nationale de l'Acadie; de la Fédération culturelle canadienne-française; de la Nouvelle alliance des producteurs francophones du Canada; et de l'Association canadienne-française de l'Ontario qui ont participé à cette audience.
8894 Je tiens à souligner, madame la présidente, que nous allons revenir devant le Conseil à la fin de l'audience pour présenter un plan qui définira clairement comment, pendant la prochaine licence, nous entendons répondre à ces demandes.
8895 Ce plan devra bien sûr tenir compte d'un équilibre entre la production de nouvelles locales, les émissions de proximité et la production destinée au réseau.
8896 En attendant de revenir devant le Conseil pour présenter ce plan, voici un sommaire des engagements déjà pris:
8897 Le message général que nous avons reçu, c'est que les stratégies mises en place ces dernières années afin de préserver et d'améliorer le service régional ont été couronnées de succès. À part quelques lacunes concernant la couverture de certaines régions, les gens des communautés nous ont dit qu'ils étaient satisfaits du service offert par l'antenne régionale de Radio-Canada.
8898 Chacune de nos stations relève quotidiennement le défi de rendre compte de l'actualité de vastes territoires aux environnements souvent très différents. Chacune de nos stations produit un bulletin quotidien de nouvelles, bulletin d'une demi-heure dans chacune des quatre stations de l'Ouest, et d'une heure dans les autres stations au cours de la saison régulière et d'une demi-heure pendant l'été. Nous nous engageons à maintenir ce service prioritaire.
8899 De plus, tous les "Ce soir" seront sous-titrés, codés à compter de l'an 2000.
8900 On nous a dit que la couverture de la Nouvelle-Écosse et les ressources journalistiques pour l'accomplir sont insuffisantes.
8901 La Société nationale des Acadiens a également déposé dans son mémoire une nouvelle demande: la production d'un bulletin détaché de dix minutes pour cette province.
8902 Dans le cas de la région de l'Est du Québec et de la demande de réouverture d'une station, nous l'avons dit la semaine dernière. La stratégie de la Société n'est plus d'investir dans des infrastructures.
8903 Nous examinerons néanmoins ce qu'il est possible de faire pour améliorer le service et nous prendrons position sur ces deux questions dans notre réplique finale.
8904 Dans chaque station, nous avons également produit en partenariat avec les organismes communautaires, le milieu des affaires et les producteurs indépendants régionaux une programmation de proximité taillée sur mesure pour les besoins des communautés régionales.
8905 Chacune de nos stations a établi des liens étroits avec les communautés et les producteurs indépendants. Nous prenons ici l'engagement de miser sur la force de ces liens pour continuer à offrir une programmation régionale qui s'ajuste rapidement aux besoins, préoccupations et intérêts des communautés tant en terme de contenu que de quantité. Nous produirons un niveau plancher de 260 heures d'émissions de proximité et nous examinons s'il est possible d'atteindre un objectif plus élevé dans le plan à vous soumettre.
8906 En ce qui concerne le reflet des régions au réseau, le message est très clair. Il nous faut accroître la présence et la visibilité des régions au réseau.
8907 Nous avons pris bonne note des recommandations et des demandes formulées la semaine dernière et également au cours des récentes consultations:
8908 - une présence accrue dans tous les genres d'émissions, en particulier à l'information et dans les productions culturelles, et ce, dans toute la grille du réseau, une présence accrue d'artistes, d'invités et d'experts en provenance de toutes les régions dans les émissions du réseau;
8909 - un mécanisme de consultation formel et d'imputabilité qui réunirait des représentants des communautés avec les décideurs de Radio-Canada;
8910 - une enveloppe réservée au développement et à la production indépendante en région.
8911 Déjà, nous avons fait part de notre nouvel engagement d'accroître les contributions régionales au réseau de cinq à sept heures par semaine d'ici la fin du terme de la licence et de consacrer sept millions sur sept ans à la production indépendante régionale.
8912 Tous ces éléments feront partie du plan qui sera soumis au Conseil à la fin de la présente audience.
8913 Je passerai maintenant la parole à Renaud Gilbert, qui réplique aux interventions concernant le Réseau de l'information.
8914 M. GILBERT: Madame la présidente, mesdames et messieurs les conseillères et les conseillers.
8915 Dans le cours de ce processus du renouvellement de la licence du Réseau de l'information, je voudrais à mon tour remercier d'abord tous ceux et celles qui nous ont fait parvenir leurs commentaires, par courrier électronique, par lettre, par mémoire ou en intervention comparaissante. Dans leur ensemble, ces commentaires nous disent comment RDI tient à coeur à tous ceux qui y ont accès.
8916 Je peux vous dire que tous les points de vue exprimés sont pris au sérieux et seront étudiés plus à fond afin d'entreprendre les actions conséquentes. Nous sommes au service de notre public.
8917 L'accès au RDI. Prenons comme exemple la question de l'accès au RDI. Avec sept millions d'abonnés, RDI est la chaîne spécialisée de langue française la plus distribuée au pays. Nous sommes maintenant distribués à près de 100 pour cent des foyers abonnés au câble au Québec et à environ 70 pour cent de ceux dans le reste du pays. Malgré cela, plusieurs associations provinciales de francophones se plaignent de l'accès au RDI en milieu minoritaire.
8918 Pour nous, le message se résume ainsi. Nous devons continuer à travailler très fort pour convaincre de nouveaux câblodistributeurs à nous distribuer. Nous allons aussi apporter notre contribution à la revue des règles relatives à l'accès des services dans les marchés bilingues, comme nous y invite l'Avis du Conseil émis le 5 mai dernier.
8919 Mais dans les faits, nous ne prévoyons pas de croissance significative du nombre d'abonnés dans les prochaines années à moins, à moins que la distribution du RDI, comme le demande la Fédération des communautés francophones et acadiennes, la FCFA, ne devienne obligatoire.
8920 Un service accru en région. RDI s'est donné comme mission de refléter l'actualité la plus significative rapidement, de manière complète, qu'elle soit régionale, nationale ou internationale.
8921 Au RDI, nous mettons l'accent sur une couverture extensive de l'actualité de toute et chacune des régions du pays.
8922 Ajouter un camion satellite à Jonquière pour couvrir le Saguenay et la Côte-Nord au Québec, ajouter un camion satellite dans l'Ouest du pays, ajouter un camion satellite dans le sud de l'Ontario, c'est nous donner des outils pour offrir une programmation qui soit plus pan-canadienne.
8923 L'Association des câblodistributeurs du Québec, l'ACQ, appuyée par l'Association canadienne de télévision par câble, l'ACTC, s'oppose à une hausse du tarif d'abonnement au RDI dans le marché francophone sous divers prétextes.
8924 Voici comment nous avons prévu la croissance des revenus de RDI tel qu'indiqué dans la Partie I de notre demande.
8925 Les revenus de RDI comprennent cinq volets:
8926 D'abord, les revenus provenant des francophones et anglophones abonnés au câble qui demeurent stables.
8927 Ensuite, une croissance des revenus provenant des SRD et SDM qui est prévue en fonction des prévisions de ces services déposés au plan d'affaires ici, au CRTC et des résultats présentement disponibles.
8928 Une croissance de la publicité nationale d'environ deux pour cent par année.
8929 Enfin, une croissance des recettes provenant des ventes d'émissions d'environ 2,5 pour cent par année.
8930 Dans les faits, la distribution totale du RDI plafonne et n'a pas progressé durant la dernière année. La croissance du nombre d'abonnés, incluant les abonnés au SRD et SDM, n'a été que de 2/10 de 1 pour cent cette année et tout indique plutôt que la croissance du nombre total d'abonnés sera inférieur aux prévisions incluses dans notre plan.
8931 Quant à la publicité nationale, LCN continue à grandir. Le Canal D vient d'accroître considérablement son offre de minutes publicitaires à 12 minutes l'heure et en janvier prochain, il y aura quatre nouveaux canaux de langue française, sans compter les nouveaux canaux de langue anglaise.
8932 Dans un marché déjà fragile, ce n'est donc pas réaliste d'estimer que les ventes publicitaires vont s'accroître sensiblement et c'est ce que confirme l'étude MBS déposée au Conseil le 21 mai dernier.
8933 Nous réitérons donc notre demande d'augmentation du tarif pour réaliser les initiatives de programmation inscrites à notre plan: plus de couverture de l'actualité en région, plus de documentaires canadiens, plus d'émissions pour les plus jeunes.
8934 Contrairement aux affirmations de TVA sur la diffusion des émissions de la chaîne principale au Réseau de l'information, RDI se conforme entièrement à la onzième condition de licence qui porte sur ce sujet.
8935 Enfin, quant au service aux malentendants, nous n'avons pas ménagé les efforts pendant la durée de notre première licence pour offrir un service aux malentendants. En fait, nous avons consenti à des investissements de 40 pour cent supérieurs à ce qui était prévu. En conséquence, nous atteignons plus de 75 pour cent de sous-titrage en heures de grande écoute et nous en sommes à environ 30 pour cent sur toute la journée.
8936 Nous réitérons ici l'engagement que nous avons pris dans notre demande de renouvellement, soit de dépasser le 50 pour cent sur toute la journée d'ici l'an 2002.
8937 Compte tenu des questions soulevées par le Regroupement québécois pour le sous-titrage, et après discussion avec le Regroupement, j'ai pris l'engagement de mettre sur pied un groupe d'études dont le mandat sera d'examiner les problèmes liés au sous-titrage en direct et de formuler des recommandations. Ce groupe commencera ses travaux en septembre prochain et nous souhaitons qu'il dépose son rapport en décembre.
8938 Nous sommes disposés à tenir informé le Conseil du résultat de cette étude et des suites que nous entendons lui donner.
8939 Merci de votre attention.
8940 Je laisse maintenant la parole à Sylvain Lafrance au sujet de la radio.
8941 M. LAFRANCE: Merci, Renaud, et bonjour.
8942 C'est maintenant mon tour de remercier tous ceux qui sont venus cette semaine apporter leur appui ou faire leurs commentaires sur la radio de service public. Je le fais avec autant plus de plaisir que la grande majorité d'entre eux sont venus dire tout leur attachement à la radio de service public.
8943 Nous les avons bien entendus. Nous avons pris bonne note de leurs commentaires, de leurs craintes parfois aussi, et je peux les assurer que nous ferons tout en notre pouvoir pour continuer longtemps encore de mériter cet attachement.
8944 Dans l'ensemble, les intervenants donc ont appuyé les demandes de renouvellement parfois avec certaines réserves quant aux modifications demandées. Permettez-moi donc de m'arrêter surtout aux demandes de modification qui ont fait l'objet de débats.
8945 D'abord, les craintes quant aux conditions de licence sur le contenu canadien. Nous sommes tout à fait disposés à maintenir les conditions de licence actuelles mais surtout, j'espère que nous avons convaincu tous les intervenants de notre détermination à s'assurer du plein respect de cette condition.
8946 Nous avons déposé, tel que convenu, une proposition quant au suivi trimestriel de ces chiffres pour la première année de la période licence. Nous suggérons que ce calcul se fasse sur une base mensuelle pour respecter la nature, la diffusion musicale de nos chaînes radiophoniques.
8947 Je tiens d'ailleurs à rassurer certains intervenants. L'objectif de la base mensuelle n'est pas de réduire les coûts de la bureaucratie mais bien de respecter la nature de notre programmation.
8948 LA PRÉSIDENTE: Monsieur Lafrance, s'il vous plaît, est-ce que...
8949 M. LAFRANCE: Lentemen!.
8950 LA PRÉSIDENTE: Même si vous avez la traduction anglaise, c'est difficile!
8951 M. LAFRANCE: Merci beaucoup. Je vais le faire.
8952 Mais bien de respecter, donc, la nature de notre programmation où la musique est le résultat d'un choix esthétique ou éditorial d'une multitude de créateurs.
8953 Nous avons également parlé de chanson française. Ici aussi, à votre invitation, nous avons déposé un engagement modifié qui prévoit le maintien en un maximum de cinq pour cent de la musique vocale anglophone et un minimum de 85 pour cent de musique vocale francophone.
8954 Ça démontre bien que notre intention n'est pas de diminuer notre présence francophone mais bien d'accueillir maintenant la création musicale d'autres cultures qui façonnent dans bien des cas la réalité canadienne d'aujourd'hui.
8955 Que ce soit pour la chanson canadienne ou la chanson française, la radio publique continuera avec fierté d'être la plus dédiée de toutes les radios à ses créateurs et aux sonorités d'ici.
8956 Plusieurs intervenants ont également soulevé des craintes quant à une ouverture au partenariat corporatif sur nos ondes. Permettez-moi ici aussi de me faire rassurant. Nous sommes une radio non commerciale. Il y aura 25 ans en mars prochain que la radio publique s'est retirée de toute diffusion de messages publicitaires. C'est une force. C'est un élément clé du caractère distinctif de nos antennes. Nous ne souhaitons pour rien au monde y changer quoi que ce soit. Je crois que les nouvelles conditions déposées cette semaine ont rassuré la plupart des intervenants.
8957 En ce qui concerne le rayonnement et la distribution de nos signaux, nous avons déposé au Conseil un schéma précis de nos objectifs pour les prochaines années. Nous sommes déterminés à poursuivre le développement de la diffusion de la chaîne culturelle et à corriger les lacunes dans la diffusion de la première chaîne.
8958 Je tiens aussi à remercier la Fédération des communautés francophones et acadiennes et la Société nationale de l'Acadie qui ont rappelé l'importance de la radio publique, l'importance d'un ancrage régional fort et qui ont salué la pertinence de la radio publique pour les communautés francophones. Je suis heureux qu'ils reconnaissent nos efforts en ce sens.
8959 Au cours de la période de licence qui prend fin, la dominante en terme de changement de programmation a sans doute été cet effort soutenu pour mieux répondre aux besoins des régions. Les communautés ont apprécié, et je peux vous affirmer d'ailleurs que cette orientation se poursuivra. La préoccupation du reflet régional et du reflet des communautés francophones est pour nous une priorité de tous les jours.
8960 Nous avons par ailleurs mis en place il y a deux ans pour la radio française une forme dynamique de consultation que nous appelons les rendez-vous des huit. Cette formule nous amène à rencontrer dans chacune des régions sur une base annuelle des décideurs et des représentants de l'auditoire. Nous souhaitons maintenir cette formule éprouvée qui tiendrait lieu pour nous de comité aviseur et qui semble satisfaire tous les intervenants. C'est cette formule de consultation qui a donné naissance au projet Micro Radio. C'est elle aussi qui a entraîné le retour à l'antenne des bulletins de nouvelles de fin de semaine dans les différentes régions.
8961 Je m'en voudrais aussi de ne pas mentionner ceux et celles qui sont venus s'exprimer en leur propre nom pour dire leur attachement à cette radio. Je pense entre autres à Jacques Languirand, Sylvain Lelièvre, Lorraine Pintal, ou encore en ouverture à Gérald Larose, Marie-Jo Thériault, Françoise Faucher et tous les autres. Ces acteurs sociaux, ces créateurs, ces passionnés façonnent le pays et lui donnent un sens et la quête du sens, c'est peut-être le rôle le plus important des médias de service public en ce tournant de millénaire.
8962 Nous sommes fiers de compter ces noms parmi les amis du service public et nous travaillerons avec acharnement pour continuer de mériter cette confiance.
8963 Merci aussi aux représentants du CRTC. Les discussions de cette semaine ont permis un dialogue productif et nous auront même permis d'enrichir sur certains aspects nos demandes de renouvellement.
8964 Il me reste simplement à remercier l'auditoire de nos radios, près d'un million de Canadiens francophones vivant dans tout le pays et à travers le monde qui considèrent que cette radio est essentielle, essentielle à la démocratie, à la culture, à l'échange entre les régions.
8965 Pour eux, cette radio, c'est une place publique, un perron d'église, un bureau de poste, un village où il est question du pays, un lieu qui a pour principale ambition de donner un sens aux réalités d'aujourd'hui, et je tiens à les remercier avec passion.
8966 Je vous remercie beaucoup.
8967 Monsieur Beatty.
8968 M. BEATTY: Merci, Sylvain.
8969 Madame la présidente, avant de conclure, permettez-moi à nouveau de souligner le travail incroyable des équipes qui ont permis à Radio-Canada de respecter, et dans bien des cas, de dépasser ses engagements durant une période particulièrement turbulente et difficile pour tous nos employés.
8970 Nous avons fait largement notre part pour contribuer à la réduction du déficit fédéral sans pour autant sacrifier la base même de ce qui a fait la réputation de Radio-Canada et son succès: la qualité et l'innovation.
8971 Nous vous avons soumis, aujourd'hui, des objectifs et des projets qui démontrent notre volonté d'aller encore plus loin pour réaliser notre mandat de diffuseur public. Nous ne pourrons toutefois progresser que si nous avons l'assurance d'un financement adéquat, d'une stabilité pour continuer à jouer notre rôle sur le plan de l'identité et de la culture nationale.
8972 Il faut aussi situer les choses dans une dimension plus large. Un producteur privé l'a souligné avec pertinence la semaine dernière. Le monde des communications se situe aujourd'hui dans une perspective globale mondiale où se retrouvent la télévision et la radio canadiennes.
8973 Sur ce plan, nous croyons que le renforcement du système de radiodiffusion francophone est essentiel, non pas dans une optique de fausse complémentarité privée/publique mais dans une optique d'une dynamique d'évolution et d'émulation mutuelles qui contribueront à hausser la qualité de nos productions sur la scène internationale.
8974 Jusqu'à maintenant, au cours de ces audiences, nous avons constaté tout comme vous que plusieurs intervenants souhaitaient travailler à faire de Radio-Canada un radiodiffuseur public fort, pertinent qui continuera d'être un moteur de la culture francophone tant au pays qu'à l'étranger.
8975 Nous acceptons ce défi, madame la présidente.
8976 Je vous remercie.
8977 LA PRÉSIDENTE: Monsieur Beatty, merci infiniment, madame, messieurs, Madame Vaillancourt.
8978 Comme il avait été entendu, ce matin, la réplique particulièrement, le but était la réplique aux intervenants.
8979 Je vois que vous êtes allés un peu plus loin. Il y a un peu une réponse aussi à des éléments qui ont fait l'objet de nos discussions la semaine passée.
8980 Sur certaines autres dimensions, vous souhaitez revenir avec des plans plus précis, surtout au chapitre des dimensions régionales.
8981 Alors, si vous l'acceptez bien, ce que nous ferons, c'est que nous attendrons à la toute fin de l'audience, après avoir entendu le renouvellement des licences anglophones aussi, pour revenir non seulement au niveau des plans stratégiques mais aussi au niveau de chacune des licences dans un esprit, comme on l'a souhaité d'ailleurs dans cet exercice, de s'assurer de bien, en respectant les distinctions et les différences, avoir quand même une certaine cohérence d'approche.
8982 Alors, si vous l'acceptez, nous reviendrons le 8 ou le 9 juin, dépendant des travaux que nous mènerons d'ici à ce moment-là, mais si vous l'acceptez de revenir avec vos équipes à ce moment-là, on pourra entamer le dialogue, en fait poursuivre le dialogue et le conclure pour l'audience que nous tenons.
8983 M. BEATTY: Nous sommes d'accord, madame la présidente.
8984 LA PRÉSIDENTE: D'accord.
8985 Alors, je vous remercie infiniment. Je vous souhaite une bonne semaine et nous nous retrouverons la semaine prochaine.
8986 Est-ce qu'il y avait autre chose, Madame Santerre?
8987 Nous allons prendre une pause parce que nous avons un changement de panel. Aussi, je me permettrai de relire les notes d'ouverture puisque nous aurons certainement un nouvel auditoire pour suivre cette partie de l'audience.
8988 Merci à tous.
--- Courte suspension à / Short recess at 0951
--- Reprise à / Upon resuming at 1005
8989 THE CHAIR: If you'll allow me, I thought I would read again the notes I read at the opening last Monday because there is definitely this morning new people coming to the hearing and I thought that to remind everyone of the objectives we're pursuing is important.
8990 I'm Françoise Bertrand. I am the Chairperson of the CRTC and we will examine during this hearing the licence renewal applications filed by the Canadian Broadcasting Corporation for its English, French and television network and specialty services, RDI and Newsworld, and the television stations that it owns and operates in Canada.
8991 Before we begin, I would like to introduce my colleagues on the panel:
8992 Andrée Wylie, Vice Chair, Broadcasting; David Colville, Vice Chair, Telecom; as well as Commissioners Joan Pennefather, Barbara Cram, Cindy Grauer; and Stewart Langford.
8993 L'audience qui a débuté mardi dernier se poursuivra vraisemblablement jusqu'au 9 juin prochain et s'inscrit dans la foulée des consultations publiques que le Conseil a tenus entre le 9 et 18 mars derniers dans 11 villes canadiennes. Lors de ces consultations, quelque 800 personnes sont venues nous dire ce qu'elles pensaient de la radio et de la télévision de Radio-Canada et ce qu'ils attendaient du radiodiffuseur public national à l'aube du troisième millénaire.
8994 Nous avons entendu de la plupart des citoyens à travers le pays à quel point ils sont rattachés au rôle unique qu'ils jouent depuis des années, la SRC et la CBC dans leur vie et dans leur communauté.
8995 Mais en même temps, ils se disent inquiets de l'avenir, considérant les impacts des coupures budgétaires. Ils se demandent comment la Société d'état va poursuivre sa mission, compte tenu de ses propres choix de programmation et du fait qu'elle évolue dans un univers de plus en plus concurrentiel et dans un environnement social et politique où on la conteste parfois.
8996 À l'heure où les changements rapides bouleversent la vie des citoyens et des entreprises de radiodiffusion, Radio-Canada et CBC n'échappent pas à la nécessité de redéfinir leur façon d'envisager l'avenir quant à leur mission fondamentale.
8997 It's within this context that the CRTC considers it essential to talk to the CBC about the renewal of all its licences in order to have a coherent overview of the national public broadcaster's role in the years to come.
8998 While radio and television are two very distinct media, for us it is very important to look at the overall role of the public broadcaster in view of the constantly changing and expanding communications environment.
8999 We would like to know what the Canadian Broadcasting Corporation's intentions are, and while we recognize the CBC's unique and essential contribution to the Canadian broadcasting system, we also want to know how it intends to pursue its goals. We also recognize the importance of the CBC's role as a general public broadcaster from coast to coast.
9000 During this hearing with its assistance and that of the other parties concerned, we would like to explore together the avenues that would allow the CBC to go forward. In other words, it is important for us to know what the CBC's priorities will be in order for it to better meet Canadians' expectations and above all, how these priorities will be reflected on the airwaves.
9001 For similar reasons, the CRTC recently reviewed its own radio and television policies so that, among other things, they are better adapted to the new communications environment and they allow citizens to have access to the widest possible range of high-quality choices that reflect our society and our cultural identity.
9002 In this regard, I am pleased to announce that we will release our new policy on Canadian television on June 11.
9003 I'd like to return now to the task at hand. During this public hearing, we shall examine a number of questions including what overall strategy do the CBC and Radio-Canada propose in order to fulfil their mandate in the years ahead, through their general radio and television services as well as through their specialty services.
9004 How will the constellation concept, which integrates the use of the Internet as well as a variety of new programming services, fit the CBC's role as the national broadcaster?
9005 Comment la SRC et la CBC entendent-elles jouer leur rôle unique, spécifique et complémentaire par rapport aux radiodiffuseurs privés?
9006 En quoi les émissions radio et télé qu'elles proposent diffèrent-elles de la programmation des autres radiodiffuseurs?
9007 Quels sont les plans particuliers rattachés à chaque licence qui aideront la Société d'état à mieux servir le public tant à l'échelle régionale que nationale?
9008 La liste des questions est encore longue. Nous prévoyons siéger de 9h00 à 18h00 au moins et permettez-moi maintenant de vous présenter le personnel du CRTC qui nous seconde au cours des semaines qui ont précédé l'audience et qui suivront l'audience.
9009 Nick Ketchum, Manager of the hearing; Carolyne Pinsky and Alistair Stewart, conseillers juridiques, et Diane Santerre, qui agira à titre de secrétaire.
9010 N'hésitez pas à vous adresser à ces personnes si vous avez toute question concernant les procédures ou toute autre question, d'ailleurs.
9011 Maintenant, je demanderais à madame Santerre de bien nous présenter l'étape où nous sommes rendus et les conditions qui prévalent pour encadrer cette étape.
9012 MADAME SANTERRE: Merci, Madame la Présidente.
9013 Nous entendrons maintenant la demande par Canadian Broadcasting Corporation Newsworld, to renew the specialty programming undertaking licence to provide a national English language news and information service expiring 31 August 2000.
9014 Mr. Redekopp.
PRESENTATION / PRÉSENTATION
9015 MR. REDEKOPP: Good morning, Madam Chair, Commissioners. My name is Harold Redekopp. I'm the Vice President of CBC English Television and I'd like to introduce my Newsworld team here, at the table.
9016 To my right is Bob Culbert, who is the Executive Director of News and Current Affairs at Newsworld.
9017 To my left is Tony Burman, who is going to lead the presentation.
9018 To his left is Joy Sellers, and she's the Deputy head of Newsworld.
9019 To Joy's left is Allison Smith, who is the Senior Correspondent and anchor.
9020 I'll go to the table behind me. Starting from my left is Maria Mironowicz, who is the Program Director; Mark Bulgutch, Senior Executive Producer of live specials and news; Geoff Trasher, Newsworld's Director of Sales; Ian MacIntosh, Newsworld's Affiliate Director; and John McQuaker, Director of Operations.
9021 To my right, we have additional colleagues who are sitting at the resource table, who can answer additional questions if necessary.
9022 It's appropriate that the Commission's consideration of CBC English Television begin with Newsworld. As much as anything else, CBC Television stands for the highest standards of news and information programming and there is no more vital role for the national public broadcaster than to inform Canadians about the events and issues that shape their communities, their country and their world. It's a contribution to informed citizenship.
9023 Our domestic coverage is deeply rooted in all parts of the country and our international coverage provides a uniquely Canadian perspective. CBC News sets the standards for journalistic excellence, for immediacy and accuracy, depth, balance, originality and independence.
9024 Newsworld has developed a strategy for its own second decade and the new millennium which builds on these historic strengths in new ways. It includes a renewed emphasis on live news coverage and a broader journalistic and production presence in more parts of the country. It's a sound business plan, consistent with the principles of public broadcasting.
9025 Bob Culbert will tell you a bit about how Newsworld fits into CBC's overall journalistic mission.
9026 MR. CULBERT: Thank you, Harold.
9027 I'd like to take a few minutes to talk to you about the crucial role that Newsworld plays in the ongoing success story of CBC journalism and how important it is for our future.
9028 Put quite simply, Newsworld allows us to be on the leading edge of journalism in this country, and that's where we intend to stay. It's not so many years ago that a Canadian might read one newspaper a day, might catch a radio newscast or two during the course of the day, might catch a television newscast in the early evening or maybe late night before bed. Newsworld changed all that.
9029 As we made news and information more readily available, Canadians wanted more. They wanted it faster and they expected to see the leading figures in the stories speak to them live and unedited. It's really no exaggeration to say that because of Newsworld, journalism in Canada has been changed forever.
9030 Newsworld has become a primary source of information for this country. On breaking stories, we are quoted by wire services. Our feeds are often picked up by private radio stations, and during the last federal election, Newsworld became the centre of a genuine innovation in the Canadian political process. Every weekday morning, the major parties were invited to hold news conferences live on Newsworld from a CBC location of their choice. The issues raised at those conferences often set the agenda for the parties for the rest of the day.
9031 The journalism on Newsworld has become renowned for its speed, its range and its depth and we have an exciting new plan which will allow Newsworld to build on these many achievements.
9032 I will ask Tony Burman, the head of Newsworld, to outline that plan for you.
9033 MR. BURMAN: Thank you and good morning, Commissioners.
9034 Newsworld is less than two months away from its tenth anniversary, so it's very timely for us that we're appearing before you now.
9035 Everyone associated with Newsworld in the past decade is proud of their contribution to the network, both those within the CBC and our many valued partners outside. We all believe in the power of a great idea.
9036 The last time the CBC was in front of the CBC discussing Newsworld was at the 1992 licence renewal. A CBC representative painted a gloomy possibility. She asked commissioners to imagine a major disaster in Canada. Imagine seeing the first television pictures from CNN and not from Canada's news network.
9037 Well, last September, SwissAir Flight 111 crashed off Nova Scotia. The first pictures of this tragedy were beamed all around the world. They were shown on CNN International, on BBC World News, on other European networks and throughout the United States. But these pictures didn't come from CNN. They came from CBC Newsworld. So thanks to your support in 1992, Newsworld was able to fulfil its role.
9038 Since 1989, Newsworld has provided more than 80,000 hours of information programming, more than 90 per cent of it Canadian. Depending on how you measure it, that's more Canadian information programming in the past decade than all national networks combined in the previous half century. Or to put it another way, that's about 500 years of The National strung together.
9039 Since its last licence renewal in 1992, it has contributed more than 17 million dollars to independent Canadian producers. Newsworld is now watched by nearly seven million Canadians a week. It produces more hours of original Canadian programming than any other network. Newsworld has become part of the central fabric of this country.
9040 The 1990s have been very remarkable ten years, truly astonishing in the degree of profound change and dramatic events. Canadians witnessed these events in their homes, live on television, on Newsworld. For the first time, Canadians had an opportunity to be at the centre of the action and watch it unfold.
9041 This didn't happen without considerable budget pressures and my colleague, Joy Sellers, will remind us of that in a few minutes.
9042 But before we talk money, let's look at history. Let's take a brief look back at what money, used wisely, can accomplish, a remarkable decade as it unfolded on Newsworld.
Présentation vidéo / Video Presentation
9043 MS. SELLERS: Imagining the next is exactly what we've done at Newsworld in preparing our application.
9044 We know how hard we have worked to get the network where it is today, providing what no other English language network is doing. We have built an in-depth, high-quality national news and information service. It provides context, background and analysis. It provides far more than simply the top stories or the main headlines.
9045 Newsworld successfully competes with Canadian and international networks such as CNN even though they have much more money and resources. CNN has a budget that is more than ten times ours, but Newsworld is successful because Canadians want us to succeed. They want a news network to call their own.
9046 Newsworld is proud of its records as an efficient, lean operation. But, as Tony will explain, we are not satisfied with that alone.
9047 MR. BURMAN: There is no mistaking our strategy as we head into a new century. First, strengthen Newsworld's competitive position in this very crowded television universe; and second, to adopt the most cost-effective approaches to delivering our service.
9048 We believe the initiatives we've put before you will make the next decade of Newsworld as compelling and as important for Canadians as the last. Our plans for video journalists and more satellite trucks are designed to get Newsworld into more areas of the country and not be trapped in our big cities. More Canadians will then be part of the national dialogue
9049 We want to breathe more life into independent documentary production to promote deeper examinations of the issues of the day.
9050 We intend to cement our closer relationship with Radio-Canada's RDI and build on the success of Culture Shock, our first bilingual and bicultural co-production.
9051 Finally, we are proposing a national internship program to assure the quality of the next generation of journalists, the people who will be reporting to Canadians in the 21st Century.
9052 I think it's worth saying that we did not pull these goals out of thin air. Newsworld's viewers are not shy about telling us what they think we should be doing. By phone, fax, letter and e-mail, they have told us we need more live news coverage from all parts of this country. We need more debate and discussion. We need more reporting of the world through Canadian eyes. We need to see more of this sprawling and diverse Canada and we need to hear more from our fellow Canadians to understand them better, and we need more Canadian documentaries.
9053 We're very enthusiastic about the potential of these initiatives. Some of you attended the Annual Cable Convention in Vancouver a few weeks ago. You saw Newsworld and RDI together, broadcasting programs from a single set.
9054 You may have heard us announce the winners of the new Joan Donaldson-Newsworld Scholarship in honour of Newsworld's founding head. These eight university journalists from across the country won a bursary and a summer job at Newsworld. In fact, two of them, very talented aboriginal students from Saskatchewan, were actually helping produce the programming that week from Vancouver.
9055 Perhaps you met two of our young Culture Shock video journalists from Quebec. They told me how surprised they were at the enthusiasm for their program from cable operators.
9056 And you may have caught our unveiling of a new late night interview program to originate next January from Vancouver. We hope it will eventually turn into a nightly program on Newsworld from the West Coast. It's an example of our determination to widen the regional reflection of Canada on our network.
9057 You'll recall in our earlier video the story of Newsworld's Nancy Durham, as she took her small videocamera to Bosnia and Kosovo. She was honoured last autumn at an international news conference in Spain where she was described as the future of television news. Indeed, we believe all of Newsworld can be a model for the future of television news.
9058 But -- and there is a big but -- it won't be easy. If energy and enthusiasm were the only considerations, the people who work at Newsworld would propel this network into the new millennium with assurance. But they aren't. The world of television in Canada is seriously competitive. Television channels abound. Audiences are fragmenting and so are advertizing revenues as sponsors seek out that precious young demographic, and meanwhile, costs are increasing.
9059 Newsworld obviously is a business and that means we balance the books. Sometimes, that requires very painful decisions such as the recent staff reductions.
9060 If Newsworld is a success story, and we believe it is, we're here as a reminder that all genuine success stories that speak to the heart and soul of this country are fragile. They cannot be taken for granted. Newsworld cannot be taken for granted.
9061 As you know, Newsworld is requesting an increase from 55 cents a month to 63 cents a month. We propose to deliver a better Newsworld service for an amount which is no more than the inflation adjusted rate of 1992. We do not ask for an increase lightly. We understand that the burden is on us to justify our proposals and we welcome the opportunity during our session here to do so.
9062 But we know the consequences of no increase. Apart from being unable to achieve our new initiatives, it would result in a gradual but very real erosion of service and Newsworld's service is programming produced by people, in Halifax, in Calgary, in Ottawa, in Toronto, in our Canadian and foreign bureaus and among our partners in Canada's independent production community.
9063 It would erode programming about Canada and the world, programming that reflects Canada's regions and programming from this country's independent documentary makers. This is Newsworld's service to Canadians and it's a unique service among specialty channels. We don't believe that Canadians want it undermined. Instead, we believe Canadians want to protect the core of Newsworld and push it to do even more.
9064 The next decade will not be easy. My colleagues at Newsworld, including those who are here today, know that Newsworld's promise will be realized only if we do more than simply rest on our laurels and celebrate the last ten years. We want to build on the past decade and learn from it. In partnership with Canadians everywhere, we want to make Newsworld even better.
9065 Thank you for your attention. We welcome your questions and your comments.
9066 THE CHAIR: Merci. Thank you very much.
9067 I would now ask Commissioner Langford to be addressing the questions of the Commission.
9068 COMMISSIONER LANGFORD: Good morning.
9069 First of all, I want to welcome you as you have welcomed us and indicate, having seen your opening video, that your editors have not lost their touch and I wonder if Bobby Jamieson is there somewhere in the background, in spirit at least. It's a first-class piece of work.
9070 I want to congratulate you as well on your last seven years, or your last ten years, but your last seven since we go by licence times here.
9071 You've survived. You've prospered. You've met all your conditions of licence and I guess if it weren't for one small request, it would be a slam-dunk. We could all go to lunch. But you've asked for more money, haven't you, and so we're going to have to question you a little bit and try to figure out why.
9072 I think one of the things that I want to stress here -- and I think I speak for all my fellow Commissioners in doing this -- is that we're not here this morning to decide anything. We're here to probe a little bit to get some more information. If it weren't for one small request, it would be a slam dunk. We could all go to lunch.
9073 But you have asked for more money, haven't you? So we are going to have to question you a little bit and try to figure out why.
9074 I think one of the things that I want to stress here, and I think I speak for all fellow commissioners in doing this, is that we are not here this morning to decide anything.
9075 We are here to probe a little bit, to get some more information, to get some clarity, to put the sun gun on some of the pages of your application and bring them to life, bring the kind of life to them that we saw in your opening video, get a sense for some of the elements of what you do that desk-bound folks like ourselves are perhaps not as familiar with, can't life off the page. But we are not going to make any rulings here today.
9076 So I guess we better start. I might say this. I hope to keep the questioning friendly and in a spirit of a kind of gentle inquiry, but if I say anything that pains you today, there may be some satisfaction in you knowing that I have a sore throat and it will pain me as well. So you will be giving as good as you get without doing anything. I seem to be fighting the bug that is going around Ottawa.
9077 I think where I would like to start, if I may, and I leave these questions open to whomever wants to take them, you are a big team here and you know your specialties. I would start with something that Mr. Burman said just a couple of minutes ago. Newsworld obviously is a business and that means we balance the books.
9078 I think in a general sense, without looking first at the books, but just in the general sense: What is Newsworld in your mind? I think people out there are going to be covering this for the media. They haven't read the application. There will be some coverage on your own show, I'm sure, and people will be writing it up in newspapers.
9079 So for the benefit of those people, what do you consider Newsworld? Do you consider it a kind of public function much like the main service which is, in a way, sponsored by the taxpayers? Whether it is through taxes or subscription fees, there is only one set of pockets out there.
9080 Or do you consider it a business, a commercial operation that really should make a go of it the way any business would be, make revenues, sell its products, attract consumers? Could somebody speak to that?
9081 MR. BURMAN: Sure. I will start and I will invite others to chime in. I think we clearly see it as a business, as a commercial operation that must operate under the same rigorous criteria that all businesses do in the sense that we have -- I think we do have and I think it is always important for CBC people to speak in terms that don't sound self-righteous but I think that the programmers and the business people and the support staff that are drawn to Newsworld clearly have a sense of mission in the sense of we don't produce soap, we produce programs, we produce an information service that we feel and we would like to feel enriches Canada in some way, in some important way.
9082 But at the end of the day, and at the end of the month, and at the end of the year, we realize that we have an incredibly obligation to our subscribers and we must keep faith with them. So in that sense, I think the practice of Newsworld from day one, and certainly the attitude right now, is to operate it in as rigorous and as tough-minded a way as any business would operate.
9083 COMMISSIONER LANGFORD: Anybody else? Anyone else on that one?
9084 MR. BULGUTCH: Well, I can tell you that, speaking as a person who bumps commercials more than anybody is that the live producer, I think we all think of ourselves as part of the public broadcaster and that though we know how important commercial revenue is to our business, we do bump commercials regularly. That's life where we live.
9085 Some of our highest rated programs, in fact, of course, are our live specials and that is where our commercials get bumped from because we aren't going to pull away from live coverage for our business concerns. So we live with one foot, I suppose, in each world, but as Tony says, at the end of the day, we run our commercials somewhere.
9086 COMMISSIONER LANGFORD: Well, that is an interesting question, isn't it, because you have a foot in both worlds? But as Mr. Burman said, you are a business. You have to balance the books. Obviously, you are going to cover the funeral of Princess Di no matter what that does to the books because probably the viewers would storm Front Street or whatever if you didn't, but where do you draw the line? You can't break away all the time.
9087 When do your accountants finally come running upstairs and say: Oh, for God's sake, stop. We're bleeding to death. Where is the line on the commercial versus public broadcaster front?
9088 MR. CULBERT: Can I speak to that, Commissioner? I think Newsworld is at the very heart of the journalism. The CBC does this for us as a service to citizens, and first and foremost, it meets its mandate in that regard. It does operate as a business. It has to, and as Tony said, sometimes, that means strict and difficult decisions.
9089 But first and foremost, we see the journalism on Newsworld exactly the way we see the journalism on the main service and the service it is to the citizens of Canada. In fact, I think on Newsworld because of the amount of time available and the flexibility of its schedule, it is able to, on an ongoing basis, meet that mandate with more freedom, less restrictions on a main channel service that has other programming mandates to fulfil as well.
9090 MR. BURMAN: If I can just add one thing, I think that it does. As you can imagine, in an operation like Newsworld, it operates within the CBC and it has both in a sense the business ethos as well as the public broadcasting journalistic ethos. There are a lot of tensions and there are a lot of conflicts and there are a lot of debates.
9091 Whether it is our coverage of the Clinton story or our coverage of Kosovo or our coverage of how we reconcile our coverage of the world versus our coverage of Canada, how we reconcile our treatment of programming as compared to advertising, all of these things, because I think that people come to the table feeling very passionately about what Newsworld represents, both not only in their mind but in the minds of our viewers.
9092 But I think it is a balancing act that over 10 years, and I speak as someone who has not been associated directly with Newsworld for 10 years, so in that sense, I can speak congratulating them as opposed to congratulating myself. I think that they have dealt with the balancing act in a very kind of careful way. But it is one that we learn.
9093 Every experience, and as I have cited some recent ones, are experiences that we assess and we say: Hey, we didn't get it right really. Let's not get carried away here. We didn't get it right and let's get it right next time, in that kind of balance. I think, in that sense, we are sharper for it.
9094 COMMISSIONER LANGFORD: I assume when you say you didn't get it right, you are talking about coverage of a story?
9095 MR. BURMAN: Well, also quantity. I think again the strength of Newsworld and the benefit of Newsworld is that we can deal with stories in a very extended way and I think that often we feel in hindsight, either we went too long on a story or on our inquiry or on a breaking story or conversely, we perhaps cut back when we shouldn't have. That is the kind of back and forth that goes on.
9096 COMMISSIONER LANGFORD: But you have no Oncle Antoine to take care of you should you -- there is no one there to cut a cheque for you should you not balance your books, to use your term.
9097 When Newsworld was first licensed, the Commission went to great lengths to ensure that there was a clear corporate wall, a corporate veil, a Chinese wall, whatever term you like, between the main service and Newsworld.
9098 So if you are a commercial operation, if you are a business, if the main service isn't there to bail you out, if dad isn't there to write a cheque, where is the line drawn? You have these ambitions to cover the news, to do a wonderful job, to do the sorts of stories around the world that you showed us in your opening video, but when do the bean counters come in and say: I'm sorry, we are at month four here and you are spending like it is month six. We are in deep trouble.
9099 MS SELLERS: Can I just speak to that? We have to remember that this is an ongoing process. We set budgets at the beginning of every year for the program schedule that we believe we can afford based on the revenue targets and subscription revenues and what we think the money will be at the beginning of the year for the next fiscal year.
9100 But I have to say that everybody who works at Newsworld, from top to bottom, is cost-conscious. Everybody knows that they have to get everything in for the cheapest amount possible at the most efficient way.
9101 So in point of fact, when you say: Where do the bean counters comes, they are there on the shoulders, in the minds, in the eyes, in the thinking of everybody on the network because every time we do something it is with how much money? How much do we have left? How much can we afford to do? If I do this, I have to juggle this.
9102 Alison can speak to it in some ways in terms of her shows and what she has to do on a day-to-day basis just in terms of what her budget is and what her thinking has to be editorially.
9103 Mark can speak to the same thing. Maria can speak to it because it is imbued in the process, I guess.
9104 Do you want to add to that, Alison?
9105 MS SMITH: I guess I can talk about what it means for a program and the costing between what we do on Newsworld and what happens on the main channel is separate, totally separate. But for example, during the recent Israeli election, I do a nightly program for an hour every night, Monday to Friday, and the Israeli election results happened, I guess, about an hour, an hour and a half before we were going to go on the air.
9106 For us to have done a live television interview out of Jerusalem that night, to comment on that election and on the results would have cost us $2,500. That is more than half, in fact, of our weekly budget for those kinds of feeds and guest fees for a week. So that is not something we could do.
9107 What we ended up doing, in fact, was using Anna-Maria Tremonti(ph), who was our former correspondent, and Norman Spector, who is a former Canadian Ambassador to Israel who is based in Victoria, because that is what we could afford to do. We could perhaps put somebody on the telephone, which was, in fact, what they did during the live coverage. But we operate so close to the bone now that those are the kinds of choices that we have to make.
9108 We want to cover the story and we want to cover it in the smartest, most comprehensive way we can, but we have to do it within the confines of our budget.
9109 One other example, I guess, over the course of a week recently, and this has to do with the nature of the stories we have been covering during the war, for example. We had to pay for three different satellite feeds: one from Washington, New York, and one from Victoria. The bill for that for that week was $1,400. That was three feeds. That's only three interviews out of five hours of live programming.
9110 We of course often do four or five interviews per program and are trying to find ways to do that as cheaply and as efficiently as we can. But that gives you an idea of, I suppose, how close to the bone we operate already.
9111 MR. BULGUTCH: I could say Joy is right when she says it's in our genes virtually the way we work there. You mentioned Diana. As big a story as that was, we had conversations before we went to London about who would go, how many people we would send. The Newsworld contingent was two people: Alison and I went. It's not like we go with a flotilla. The cavalry isn't there anymore. The main network sent its small contingent and we all work as one team.
9112 I was saying to Alison, as we thought about it the other day, the only perhaps extra expense we had that we shouldn't have spent was on the hotel because we were hardly there.
9113 COMMISSIONER LANGFORD: I want you to know that I am not on a fat-finding mission here. I think those days pretty well everyone accepts are long gone. But I am on a fact-finding mission. I am just trying to get a sense, and Alison, you gave me a good sense of just where the business comes in and where the desire to be a public service newscaster comes in, and I know there is a wall between yourselves and the main service.
9114 But still it is difficult to see on a day-to-day basis and I appreciate your example of the election in Israel because that is a real example, something that gives me a sense that there is a story you had to cull. You didn't have the money. So somewhere there is a bean counter whispering somewhere.
9115 On the sense of the resources and the wall between yourselves and the main service, I gather that obviously the wall is a financial wall but that there is a great deal of cooperation between you. I don't have a sense though from your application -- and this is not critical; you can't put everything in there. It would be like the Encyclopedia Britannica.
9116 We have almost deforested the country with this application as it is. But I don't have a sense of priorities. You need the SNG truck for story "X" and the national main service -- national needs it for story "Y". You need an edit booth. They need the edit booth. Someone needs a camera. Someone else needs a camera.
9117 I don't have a sense of how you work together. I don't know if it's possible. Who gets the priority? Who has the hammer? How does all of that work in 400,000 words or less?
9118 MR. BURMAN: Well, it certainly works much differently now than it used to and I think that is something that we say with some pride in that we have an integrated national assignment desk in Toronto that is the liaison with our bureaus in the field and also with our programs, both programs that are on Newsworld as well as programs on the main channel, specifically "The National" or our regional supper hours.
9119 I think that it is that core of people -- and we are all part of that operation -- that determine priorities. I think it is a balancing act. I think there is a clear recognition now, in 1999, perhaps not in 1989, but in 1999, there is a clear recognition that Newsworld is an incredibly important part of the CBC News Service and, as such, the stories or reports aren't held back for "The National" as compared to Newsworld.
9120 I think it is a give-and-take back and forth and I think that, as recently as the Julie Payette event the other day, both Newsworld and the main channel News Service combines together on virtually every story that requires any money.
9121 We go a step further now, which I think we alluded to in our opening presentation, is that our collaboration now with RDI is incredibly intimate. Four or five news specials a day are co-produced by both sides.
9122 So I think that there really is -- again, without exaggerating the fact that there are tensions always in any kind of operation that is under so much pressure. So I am not suggesting that we have reached a paradise, but there really is a kind of a recognition in every part of CBC News and CBC Newsworld that working together, working in an integrated way on stories like that is really essential. I think in that sense the priorities are fairly easy to determine on a day-to-day basis.
9123 COMMISSIONER LANGFORD: There is a partial quotation that I have taken off of paragraph 45 of your application. We can get it out and look at it if you want, but it says that you found it more difficult than expected to have guaranteed access to SNG facilities.
9124 What does that mean? Does that mean that "The National" has taken them away and you can't get them? Again, I am just trying to get a sense of what that sentence means.
9125 MR. McQUAKER: Commissioner Langford, we had some major plans in our previous licence renewal to acquire or lease SNG facilities and it doesn't have to do with the CBC. The CBC -- English television network actually has very few SNG, satellite news-gathering facilities.
9126 As it turned out, it was a little bit more difficult than expected because the potential partners that we say in the private sector, we were unable to make business arrangements until just recently, and recently we have done that. We now have access to four different SNG vehicles placed strategically across the country.
9127 But there were two things there. One was the possible or potential arrangements that became difficult. The other was essentially what happened after about a year or two into our licence renewal, the CBC got hit with tremendous cuts in the government appropriation which then cause the whole News Service and Newsworld to take a look at how it was organized and structured and we had to take a look at how things were done and rebuild to change how things were done.
9128 MR. BURMAN: But just to reinforce, his answer to your specific question is that the relations between Newsworld and the main channel about things such as access to satellite news gathering is a very close relationship because we combine so often on stories that require these kinds of facilities.
9129 COMMISSIONER LANGFORD: So it's not the old days of "The Journal" where -- in Ottawa, "The Journal" was on the 9th floor; "The National" was on the 8th floor and they just shot at each other up and down the staircase and things like that. It's together now, is it?
9130 MR. BURMAN: Yes.
9131 COMMISSIONER LANGFORD: Again, on the subject of the relationship between the main service and Newsworld, in your annual financial returns, and I don't want to get into them in great detail, there seems to be some inconsistency about the way your debt to the main service gets repaid. It seemed high the last year and fluctuates in different years. How does that work? It is not clear to me, reading the application, whether you are in a sort of long-term mortgage. It doesn't appear to be because you are not paying the same amount every year.
9132 Do they just sort of say: well, if you had a good year, we will take some money? It seems very unsure to me. I can't figure it out.
9133 MR. BURMAN: Right. I will ask my colleague, Iain McIntosh, to explain that.
9134 MR. McINTOSH: Well, we did have a loan from the CBC at the beginning of our licence in 1989, but that was repaid, I think, a couple of years ago. So there is no more debt to the CBC.
9135 COMMISSIONER LANGFORD: You made a debt repayment this year, did you not?
9136 MR. McINTOSH: Could you show me which page you are looking at?
9137 COMMISSIONER LANGFORD: I will eventually but I won't do it now because it is back behind me. But are you saying that debt is completely retired now?
9138 MR. McINTOSH: Yes.
9139 COMMISSIONER LANGFORD: Okay. Well, if you don't mind bearing with me, I will get back to that when we get into the nickels and dimes. But that wasn't my impression and I will stick with my notes here and more general subjects.
9140 MR. McINTOSH: Somebody is just pointing out a page to me here. Are you referring to the repayment to the CBC main service for capital expenditures?
9141 COMMISSIONER LANGFORD: Yes.
9142 MR. McINTOSH: Okay. That is the capital expenditure that Newsworld bought in that year. The capital is owned by CBC. So this is not a debt repayment. This is simply paying CBC for the capital.
9143 COMMISSIONER LANGFORD: Why does that vary?
9144 MR. McQUAKER: Actually, that is pretty simple. The amount of capital equipment that we buy in any given year varies depending on our plan and our programming for that year. So in some years, it is significantly higher if we have to replace a very expensive piece of equipment and in other years, if we feel we can make that equipment last a little bit longer, the capital payment is lower. It really just depends on how much we have to buy in any given year to continue to provide the service and to improve the service.
9145 COMMISSIONER LANGFORD: Thanks very much. I obviously misunderstood that. I thought it was part of the ongoing loan but thanks for clearing that up.
9146 With regard to that sort of capital equipment purchase then, do you break that down into sort of what share is owned by the main service and what share is owned by Newsworld, assuming as Mr. Burman said, that you are sharing facilities. How do you work that out?
9147 MR. McQUAKER: Well, we have the incremental cost rule. So if there is any piece of equipment that needs to be bought for Newsworld purposes, then Newsworld buys it out of Newsworld's revenues. If there is a piece of equipment that is available as part of CBC's infrastructure and it is not being used at a particular time when Newsworld needs to use it, then we can use it. There is no rental fee. There is no cost to us for using it.
9148 But anything that is incremental to what already exists, and if Newsworld needs it for our programming, such as a remote control camera at the Halifax harbour or something or an extra camera for a field shooter because one of our programs needs more field shooting capability, then we buy that equipment, although because Newsworld is not a separate legal entity, it is still owned by the CBC.
9149 COMMISSIONER LANGFORD: And you don't break up the cost of that between the two, the main service and Newsworld itself, even though you might share it?
9150 MR. McQUAKER: No. If it is bought for us we pay for it, because generally, Commissioner Langford, we don't buy something unless there is an absolute dire necessity for it. If that is the case, the odds that somebody else is going to share it are pretty low.
9151 COMMISSIONER LANGFORD: I'm looking at some of the things that you do buy -- somebody may have answered this already. I'm not sure. Now, I'm beginning to lose track of who said what. But you are all together in this so you are all stuck with each other's answers as I am stuck with my questions.
9152 In the 1992 renewal there was a request made for an increase at that time and although you didn't get everything you wanted you were granted a 23 cent increase. Much of that, according to our records, was earmarked for the purchase of equipment and for additional staff. I just wonder whether you have any sense of how that went. Did you in fact spend that as you planned?
9153 I will give you one example; for example: expansion of the service by opening three new foreign mini-bureaus; hiring staff to provide coverage of events in Europe, the Pacific Rim and Central and South America; expand the London bureau by adding eight staff; acquiring a full-time transponder and uplink for Atlantic feeds and part-time facilities for Pacific feeds.
9154 Did that happen?
9155 MS SELLERS: Well, part of it happened certainly and part of it did not happen exactly as we had anticipated.
9156 We certainly, over the course of the last seven years, have opened and changed bureaus. Because of the recent changes, you know -- we started out going down the road, we had Mexico, we had Capetown, we had Paris, we added staff in London, although I think over the course of the last seven years it is not now eight because we have reduced in the last couple of years and we have made some changes in the last couple of years.
9157 Some of those things did not happen because of the main channel budget cuts where we had to re-evaluate and retrench and rethink how we were going to do business and the cost of the foreign thing had to take a second seat or a back seat to some of our domestic changes that had to happen.
9158 But certainly we opened Mexico. We put a correspondent in Paris. We had one in South Africa. We added in London. For a while we shared in Delhi, I think, I have forgotten exactly, but that has now changed so that is no longer on the list.
9159 We did not put the transponder across the Pacific, but we certainly made a major contribution to the transponder across the Atlantic which had a big impact on how we could do foreign coverage.
9160 Is that the end of the question? Was there more?
9161 COMMISSIONER LANGFORD: Well, the question could go on.
9162 I don't want to beat it to death with a stick, but you did say at one point that because of some of the changes -- I can't quote you exactly -- to the main channel we had to re-assess and re-evaluate our plans.
9163 I guess that brings me back again to my question because I'm still not clear why that would be.
9164 If this is run as a separate business with a wall between the two, why would it matter what was going on at the main channel? Why would it matter that the government has cut back on their budgets? Why wouldn't you just say, "Well, we have our plan. We have our extra 23 cents. We are going to put our correspondents in here", and there are a number of other things that we could read: extra equipment, extra studio space, infrastructure to respond to breaking news.
9165 If that didn't happen how could it matter that what happens at the main channel -- why would that be relevant?
9166 MS SELLERS: Because Newsworld, in 1989 and continuing on to 1992, was built on, if you will, the excess capacity of the CBC at the time. In 1992 it still had a fair amount of what we will call margin or excess capacity. So there were a number of things that Newsworld could do in 1989 and 1992 in terms of getting access to crews, access to equipment, access to cameras, access to studios, and those kinds of things that it simply didn't have to pay for because it was there. You know, we could pull away an hour a day some place to do an interview. We could get access to a transponder or a satellite because it wasn't in use for half an hour, 10 minutes, 15 minutes, those kinds of things. It allowed us to put the news service to the air or Newsworld to the air but not actually put an outlay of cash to it. We put the outlay of cash where it was something that we absolutely had to have but we needed it for a time period and it wasn't available to us for those time periods so we would pay for that.
9167 With the overall cuts to the corporation that margin disappeared so things that used to be available to Newsworld at no cost where we could, you know, shift in and fill in the holes simply were non-existent any longer. We then had to put our assets or our resources into things that we needed to keep Newsworld as a news service or as a functioning channel because all of a sudden the stuff that we had been building on disappeared.
9168 So those costs were now Newsworld's costs because they were no longer a margin that CBC could provide to us. That is why we then had to rethink how we were doing our business when the cuts happened to the over-the-air network.
9169 Now, I have to say in all honesty that I do believe that we have done most of everything that we have promised to do in 1992. I mean despite all that we still increased our foreign coverage. You know, we have done it differently, but we have done those things. We increased or foreign coverage. We have done other ways of getting our coverage into house. We have increased domestic live. We have done a whole bunch of things like that, but just not in the way that we had planned in 1992 or anticipated in 1992 because we had assumed stable programming.
9170 COMMISSIONER LANGFORD: But might it happen that you would be planning -- and I really have to get into the realm of speculation, but you might be planning to make some major improvement in a regional bureau and because the CBC's main service is pulling away you are losing something somewhere else so you can't do that regional improvement and have to do something in Toronto instead? In other words, have your priorities shifted that way?
9171 I see Mr. Burman nodding, but I don't know what that means.
9172 MR. CULBERT: Could I speak to this, Tony, for a second?
9173 MR. BURMAN: Yes.
9174 MR. CULBERT: I think the overriding principle, Commissioner, is it's an integrated news-gathering operation so in all the business we do, in gathering news, domestic, foreign, Newsworld and the main service are partners and together for the efficiencies we had defined to maintain our news service. So there really is not a separate entity of news operations.
9175 There was a time maybe when it may have been like that, but it is now an integrated service so every decision about a bureau, regional or foreign, the people making that decision are the people in the main channel news department and the people at Newsworld and they make it together so that we have the broadest range of a news service at the most efficient cost.
9176 MR. BURMAN: To just really carry on from both Bob and Joy, the experience over the years is that every year the people who manage and run Newsworld, both the executive producers and management, kind of make an assessment of how they can deliver the best possible service to the subscribers who are paying considerable money for it. To the extent that there are changes within the main channel, we do have to recalibrate some of our decisions or perhaps we may have to delay certain things because it is in the main channel's interest to decide X or Y. That really has more of a negative impact on Newsworld than it would have on their operations. We have to respond, like in any business environment, where we have a deal with the environment around us, both outside of the CBC and within the CBC.
9177 COMMISSIONER LANGFORD: The problem that I face is that it is this application for more money which forces us to look at all of this sort of thing because, as I said at the beginning, you are to be congratulated on all other fronts, it's just that once you ask for more money we have to ask why, and so that is what we are doing.
9178 It is not a clean application in a way. I don't mean that it is tainted in some way. It is just difficult. It's difficult to focus on because on one sense you have this Chinese wall financially between you and the main service, but what I'm hearing is that you are working so closely with the main service that it is difficult for us to assess -- in a sense, listening to you I find it difficult to assess whether it is a benefit or a liability having them there.
9179 You know, you have this integrated assignment desk so I assume that is a benefit; you are both working on stories together. At the same time, they make some sort of a decision on resources and it may throw all of yours into a hat because it affects you in a way you hadn't expected.
9180 Could you run this business without the main service on the budget you have now? Could this be a standalone service?
9181 MS SELLERS: On the budget we have now? No.
9182 MR. BURMAN: I think in terms of Newsworld that we know right now we can modify the service to accommodate whatever budget is required. I mean, that doesn't require incredible ingenuity. We can do it. But to the extent that when we look at the legacy of 10 years and what do Canadians identify Newsworld with? They don't identify Newsworld with headline news service. There is a whole range of programming, not only extended live news coverage but analytical and contextual reporting, regional coverage, a range of documentaries, that kind of programming that makes Newsworld a unique channel and a unique service in Canada.
9183 To the extent that we decide, for purposes of the discussion, let's cut the Newsworld budget in half, one can kind of tailor the suit to the cloth, but we kind of know it doesn't take much imagination to know what things will be dropped from the table.
9184 So I think in that sense that the presence of Newsworld within the CBC, for a whole host of reasons, has, over the 10 years, been an incredible benefit, you know, not only in business terms, in terms of where we work, et cetera, but also just because of the synergies back and forth.
9185 Our budget is not a state secret. You know that 98 per cent of it or 97 per cent of it that goes into programming and programming-related expenditures you see on air. To the extent that we would have less money, whether it is through inflation gradually eroding the value of our revenue or whatever, it would show up on air.
9186 MR. BULGUTCH: If you like a concrete example -- the Julie Payette launch for CBC English Television. Newsworld sent two people, a producer and a correspondent, on our budget. We shared a camera and editing withe the main channel camera and editor who would have gone anyway and so that is margin -- that is the margin that we talk of when we talk about the margin on CBC news. Since they were going anyway there is no extra cost for us but clearly we need a camera and an editor there.
9187 So could we exist on our own? Yes, but we would then have to pay for a camera and an editor to go down. So it would have cost more, impacted on the budget, and who knows what you drop at the other end but for us to cover that story was made less painful financially because we are part of the CBC.
9188 MR. CULBERT: I think, Commissioner, again, to clarify, the range and the depth of what Newsworld has been able to do is because of taking advantage of our relationship with the main channel and having learned to manage that relationship with the synergies of all the resources are played in the CBC journalism. The CBC journalism on the main channel is the CBC journalism on Newsworld and the depth and the range of that, both in newscast, but on the programming, the daily topical current affairs program that follows the newscast, that is why Newsworld is so good, it is based on using those synergies.
9189 COMMISSIONER LANGFORD: So in a way you do have an uncle "Antoine". I mean, we don't know how generous this uncle is but there is a sense there that you have support, that -- I don't want to say big brother, good grief! -- but that your older brother in the main service is there to support you, to share facilities to make things like the coverage of the launch more possible.
9190 MR. CULBERT: We don't view it as a big brother. As I said it is basically one integrated operation. People come to the table as partners in a news service trying to provide the best service for both channels.
9191 COMMISSION LANGFORD: I don't want to dwell on the negative, but let me try one more question in the sense of whether there is a downside to this. Recently the Newsworld service cut jobs in Halifax and Calgary, I think it was. That came as a surprise to us but then we don't live in your offices. It may have come as no surprise to you. But was that somehow prompted by the way the main service was going or was that a decision you made within your own -- to use Mr. Burman's words again -- business?
9192 MR. BURMAN: It was the latter, but let me kind of put that in a wider context. About a year ago, as we looked at kind of Newsworld, not only the Newsworld of the current year but also the Newsworld of the next six or seven years as it related to this submission, I mean we felt it was quite important for us to strengthen our competitive position in a way that would better serve Canadians and we felt that there were certain things that we should do. I think the overriding conclusion was that we should renew the news routes of Newsworld and that would take a variety of aspects to it, it would involve increasing news and live coverage. It would involve improving regional reflection of this country on Newsworld and also in extending and widening the journalist presence across the country and those were the principles that led to the current schedule that we have on the air and those are the principles that underlie our proposal to you.
9193 This spring, as we again assessed where we were and where we are not only in terms of our strategic goals but also in terms of our financial situation -- I mean, we have salary increases, there is a real incredible competitive struggle going on in terms of ad revenue and we looked at our operation and we said, "Look, if we are to deliver on these strategic goals, we have to make sure that our operation is operating not only as efficiently as it can, because I think we really do believe that Newsworld embodies efficiency but we also look for areas of duplication and let's eliminate areas of duplication, let's look at our very important operation in Calgary, our very important operation in Halifax, let's look at our very important operation in Toronto which we are currently doing and I think it is in that context that we identified areas where we could deliver the same programming, the same service to our viewers, but for less money in different ways and, unfortunately -- and this is the nature of a business -- that within Calgary it led to certain staff reductions, within Halifax it led to certain staff reductions. When this process is completed in another month or six weeks it will lead to staff reductions in Toronto, but I mean I think the ultimate goal is to strengthen Newsworld and to keep it consistent in terms of what we think are the principles that should take us into the next license period.
9194 COMMISSIONER LANGFORD: But if one of the principles is to quote you "improving regional reflection on Newsworld" how does that gel with things like those sorts of layoffs to say nothing about the sense that I think the average Canadian out there -- boy, it is always dangerous when you speak for the average Canadian, but lets say the average Canadian taxi driver might be surprised to find that a hunk of their national broadcaster was kind of pulling out of regions and centralising in Toronto --
9195 MR. BURMAN: With respect, I think what you are doing is you are looking at one part of the puzzle. In other words, the other part of the puzzle is, in our view, incredibly important and again relates to what drives this which is that Newsworld is probably the most regionally routed network in this country but, over time, we believe that it is important for us to have a real presence beyond certain major centres. As important that they are -- Calgary and Halifax, Ottawa to a certain extent and Toronto -- as important as they are -- and Calgary and Halifax will always remain incredibly important and probably unquestionably the largest regional centres in Newsworld as far as I can imagine ahead, but I think it was our feeling that if we are to deliver on our kind of regional mandate that we have to extend our news gathering more points, we have to create more points, we have to create more points of origin in terms of programs which is why we have announced a new program out of Vancouver, a new program out of Winnipeg, a new program out of Montreal. We have announced that over the next year that we will be creating mini bureaus in some of the smaller cities that are not, in our view, not properly represented so I think that the process at the end of it, you will see, will be an extension, a growth in our regional presence.
9196 If in order to achieve that we have to look at certain ways that we operate, not only in Calgary and Halifax but also in Toronto and if that does mean that, for example, Calgary, where we have four, five incredibly important programs on Newsworld. We have them on air over a 12-hour period which requires two crews, two shifts. We came to the quick conclusion that if we moved the time slot of one of those programs that we could produce the same quantity and quality of programming but within one shift.
9197 Now that -- lamentably because everybody in Newsworld feels incredibly close to others working -- that did mean seven staff reductions but I think the ultimate impact of that is that Calgary is producing the same quality programming and I think we are operating more efficiently.
9198 Halifax is the same kind of process.
9199 So I think as we recalibrate our programming that inevitably there are staff moves that are required but I think that at the end of the day and at the end of the process you will see an extension of Newsworld's regional presence in this country.
9200 MR. REDEKOPP: Commissioner Langford, could I just underline what Tony is saying and also assure you and the Commission that the proportion of programming and contribution from the region will not change. I think the array will change but the proportion between regional and Toronto-produced programs will not change.
9201 COMMISSIONER LANGFORD: Are you saying then that you are not taking money out of the regions in a way but you are reallocating it? Has that money that you are getting from this downsizing already been earmarked, for example, for video journalists to be in smaller communities? Is that what you have done with it?
9202 MR. BURMAN: What we do every spring, like any business and any network, we make an assessment of all of our operations and we are in the process of doing that and any saving that we may garner in any place becomes part of our general revenue so we don't attach -- in other words we don't make a cut in Toronto and then attribute the savings in that cut specifically to an initiative in Northern Alberta but the effect is the same. So in terms of your general question that a year from now, if we are around this table assessing both in terms of numbers of people operating in Newsworld in the regional so-called, the amount of air time that we have on air from the regions outside of Toronto and the amount of people, I think that you will see an increase.
9203 I mean we are looking for savings but we will deliver on our initiatives and our commitment to extend our regional reflection.
9204 COMMISSIONER LANGFORD: But if you made these cuts in the regions -- might as well just keep focusing on these because we are on them now, we could use any cuts, but let's use these -- have you made these cuts because you are in a deficit position, as your books show this year, or have you made the cuts because you are thinking ahead to next year where you want to use that money in the regions but in a different way?
9205 MR. BURMAN: Again more the latter although I really must come back, if you don't mind, on your assertion that we are in a deficit position because that is something that I think we have to deal with. But, again, I think our goal is that if we had a clear sense of the principles that should drive Newsworld into the next three, four, five years that we have to come up with ways of delivering on that. So what we are doing is looking for ways to identifying duplication, make savings, all of that kind of thing that contributes to these initiatives and we are also dealing with -- we are not dealing with a deficit but we are dealing with -- as we look ahead to the next 12 months -- we are looking at a revenue base that is flat, that remains constant, at t he advertising productions that will be down, at salary increases that will be up -- and we all know, again, in a business that means that we have to anticipate that if we want to avoid a deficit nine or ten or twelve months from now, that we have to make moves rights now.
9206 But on the issue of a deficit, can i just make one point because what you say is something that I have heard -- we have heard -- in some of the news reporting that has preceded this hearing and that is essentially that --
9207 It goes like this: In the last year, or on one story it was the last three years, that Newsworld has reported a net loss and that comes from the reading, and I am going to ask Ian McIntosh to explain.
9208 But I don't know how easily accessible. But if the Commissioners can go to page 15 in our brief of the financial operations section -- and maybe what we will do is we will get Brian, through the secretary, to give you a copy of it.
9209 What it illustrates is, the lay persons -- before I hand the microphone over to my accountant colleague behind me, the lay person's analysis is that in reality this current year, last year, the year before and the year before, Newsworld has reported a new surplus and that essentially it has been a misreading of the document.
9210 But why don't I ask Iain to explain it in greater detail.
9211 MR. McINTOSH: Okay.
9212 I think the impression has been created from a reading of the Commission's statistical summary report which it issues each year showing results of each specialty service in which it reports the results in a certain predetermined format, and I don't think that format necessarily reflects the way we manage the Newsworld operation.
9213 If you look at page 15 here, which is the income statement for the last broadcast year, the line that says "Excess costs after repayment to CBC main servers", which shows the $1.1 million excess cost figure, up to that point is the information which is reported in the CRTC's annual report. But the information below that is not reported, and that is actually the way we manage Newsworld.
9214 If you look further down there, you will find that for those three years in which some intervenors have claimed we have made net losses, we in fact carried forward surpluses of a million and forty-seven thousand, one million, four hundred and fifty-seven thousand, and five hundred and twelve thousand.
9215 COMMISSIONER LANGFORD: So you are in good shape.
9216 MR. BURMAN: Yes. I guess our point is -- because unfortunately the intervenors have cited this as an example of kind of the financial credibility of Newsworld. I guess our point is the reverse, as you say, which is that our business plan in 1992 was sound. We have executed the business plan since then in our -- we feel obviously our business plan for the next seven years is sound as well.
9217 COMMISSIONER LANGFORD: So then that money -- I don't want to spend your money for you, but I wouldn't mind spending some of it. That money will be going back to the regions then, or that is the hope that you are going to keep the regions strong and use some of that money in a different way.
9218 MR. BURMAN: Yes. I know I want to invite Alison to intervene as well.
9219 But in terms of your specific question, I mean let me make a commitment right now that a year from now if we can assess how much we are spending on the regions -- and I think you will find that we will be spending more in terms of programming and people and news gathering and all these journalistic functions outside Toronto than we currently spend in spite of the announcements of the last two weeks.
9220 But Alison --
9221 MS. SMITH: I just wanted to give you a couple of examples of, I suppose, what drives us when we think about how we are going to treat a particular story and how important the kind of regional aspect is to all of us.
9222 As somebody from the Okanagan Valley, I --
9223 COMMISSIONER LANGFORD: I'm listening to you. I'm just writing down this commitment.
9224 MS SMITH: As somebody from the Okanagan Valley I, I suppose, appreciate the fact that all parts of the country want to hear their voices heard.
9225 Budgets are one example, I suppose. When we at Newsworld plan our budget coverage we think it is important that it not only come from Ottawa and from Bay Street, we think it is important that we hear reaction and analysis on that budget from across the country. So it has become our practice over the course of the last several years to in fact base our coverage not only out of Ottawa but out of, at various times, Vancouver, Calgary, Halifax, where we develop the reaction and analysis from those centres as well. So our coverage is in fact spread out across the country.
9226 Our recent program on -- and it was an entire day of programming revolving around health care at a time when the debate about health care in this country was preeminent on everyone's minds, not only those of us who have to go to the doctor and go to hospitals but also on the politicians minds as well.
9227 We devoted an entire day of programming to health care and every program in the network from coast-to-coast developed an aspect of that story from that particular region. So we were in hospitals in Halifax, we were in hospitals in Toronto, we were in a clinic on the Prairies, in Saskatchewan, we did elements of it out of Vancouver.
9228 It is what motivates us when we are planning coverage of a major story to hear those voices from all parts of the country. It is what makes Newsworld what it is, that diversity of voices that you hear. I know --
9229 MR. BULGUTCH: But. But the "but" is that there is only so far we can go now. I mean, when Alison talks about a budget coverage, I mean she's right, we do it from Ottawa, we do it from Toronto, we do it from Halifax, we do it from Calgary and Vancouver, and that's it. You know, we can't get out of the big cities yet. What our proposal is, is that we finally get us out of the cities.
9230 Taber is a terrific example of what we might be and where we are handicapped now. Taber we did what we think is good coverage of what happened there, but we only go to these places when there is a disaster, when there is trouble, when there is bad news.
9231 I mean, I kind of imagine that people in small town Canada seeing a CBC truck roll or drive by and they wonder, "Uh-oh, what has happened." You know, we are never bringing good news, and we would like to get out there once in a while with good news. So, I mean, Taber has been on Newsworld in 1999 for the wrong reason.
9232 I checked, and the last time that we were in Taber was for another murder in 1994. So Canadians view of Taber, Alberta is the murder capital of Canada, and I doubt that. You know, it is darn wrong that we do that, and we want to get out there more often.
9233 I look, you know, Shediac. We have been there not once since 1995.
9234 Dryden, Ontario, what does that mean to you? It means a plane crash. You know, that is all it means to most Canadians, because that is the only time we get there is when bad news is going on.
9235 So what we want to do with developing the video journalists, with more access to satellite trucks, is to get out there and let other Canadians who don't live in big cities be part of what we want to put on television.
9236 COMMISSIONER LANGFORD: Well, let's see if you are going to get your trucks. We will follow the first rule here of investigative journalism, we will follow the money, as they say.
9237 I guess the way I would like to get into this, because we have sort of done the generals now, or at least in my mind I have but my fellow Commissioners may have some other questions afterwards. Like you, I come with a gang: You fight me, you fight my gang. So I am not the last voice from this side.
9238 But in looking at the money and at your plans, I'm looking at your programming today and I note in paragraph 40 of your application you say:
"More than 80 per cent of our Monday to Friday schedule between 6:00 a.m. and midnight is live." (As read)
9239 Then you go on and say it is easier to do prepackaged stuff, and it is cheaper -- I think you say "easier and cheaper" is the phrase you used. I guess if money is a problem and you are a business, why don't you do a different split? I mean the example being, I'm sure all car companies would like to put out Mercedes Benz's, quality automobiles, but they know they can't. So they cut back and they cut corners and put out the best Fords and Pontiacs and whatever they can.
9240 You are a business. Your product is news coverage, news stories, information. You have gone to an 80/20 split on live to prepackaged, 6:00 a.m. to midnight. Why? Why go to this incredibly expensive split when you could find your financing in another way it seems to me?
9241 MR. BURMAN: Well, in 1989 the CRTC and the CBC had the vision to create Newsworld, and it created Newsworld for a specific reason, and it created Newsworld to bring to Canadians an in-depth news and information service.
9242 In very real terms I think since 1989 CBC and Newsworld have tried to deliver on that, and I think that the response that we have been getting from Canadians has been really quite positive.
9243 I think that the reality of an information channel is that an information channel can't do what other specialty channels do, I mean without turning its back on its mandate. Our obligation is to cover this incredibly diverse, sprawling, changing country, and we are trying to do it not because we feel that it is something that we just want to do, but we feel that it is intrinsic in why the CRTC put Newsworld on the dial.
9244 So the evolution, really, for Newsworld since 1989 in terms of our live coverage has been that I think we have sensed -- and I don't think it is really any secret that Canadians do have an expectation that their news network deliver on major Canadian and international events as other news channels do, whether it is CNN in the States or whether it is the BBC.
9245 If, for whatever reason, because of a lack of money or a lack of imagination, Newsworld turns its back on that, it can, at the end of the day, as I said earlier, manage within any kind of budget restriction. But I think it would be sheer folly on our part to imagine that what will come out of that process would be anything that will resemble the vision that carried the day in 1989.
9246 But we do -- the one thing I will say, and maybe invite my colleague to chip in as well, that the evolution of Newsworld since 1989 has really been in a culture of cost-cutting and culture of cutting corners and a culture of looking for ways of saving money. So it is not as if we are going after the most expensive way of covering stories.
9247 MR. BULGUTCH: I can tell you, though, the interesting thing is, if you weren't live, you know with live programming, we have interrupted our normal scheduled programming in this calendar year more than 500 times already. This is despite a seven week strike. Five hundred times.
9248 Now, you can imagine if you were watching a tape, a documentary, and then suddenly, boom, up comes live programming. You get angry. So we have a schedule, because it is live, that is easily interruptible, that is flexible, that bends to when news is happening.
9249 On the weekend when we are more tape-driven with documentaries, more sit down and watch a whole program rather than the hustle and bustle of a weekday perhaps, I think twice -- we all think twice before we interrupt a documentary for a news conference. You kind of decide what is the value of this versus -- if you have already allowed your viewers to spend 45 minutes watching a documentary, do you really want to blow away the last 15 minutes?
9250 Yet clearly the single most important thing we do, I believe, is our live news breaking news programming. So you need a schedule during the week, especially when news tends to happen, that is flexible and will allow you to smoothly go into this live coverage without getting your viewers angry.
9251 MS SMITH: Can you imagine our coverage of the Israeli election? I suppose one cheaper way for us to actually get an interview out of Israel would have been to do what we call a double-ender, would be to hook up an interview guest on the other end of a phone line and have a camera person shoot that interview. We could have perhaps found an analyst or a political observer to talk about that election sometime in advance, and then we could have had that video tape shipped from Jerusalem to London, which would be much less expensive, and then there are some ways for us to get that tape out of London. It would have been out-of-date by the time we got it here.
9252 Can you imagine living in Taber, Alberta and knowing that this story is unfolding in your neighbourhood and not having the capacity in fact to go there live. Can you imagine the situation with Swiss Air Flight 111?
9253 That is what we are here for. Canadians want to see themselves and they want to see the news not only happening in their neighbourhood but around the world, and we have to be there when it happens because that is why we are here.
9254 COMMISSIONER LANGFORD: I share your commitment, and I admire it and I understand the emotion behind what you are saying, and yet we have to follow the money. You are here saying pass on to our subscribers an increase, and our job is to look pretty hard at that.
9255 So I don't want you think that I am Johnny One Note, but that is really the only note you have given me to sing. Everything else is congratulations, slam dunk, go on home. Keep busy.
9256 So we have a policy that we try to keep basic cable rates as low as we can. We understand that people are pinching their pennies. It is not only Newsworld that is facing constraints out there.
9257 We have a situation where we had kind of an impassioned plea before you about good news. It almost sounded like Roméo Leblanc's initial speech, do you remember, urging all you folks to do some good news.
9258 You could have the "Good News Hour" with something like Charles Kuralt, I suppose, that would drop into -- I'm programming as I go here, forgive me -- but drop into Taber -- and what were the other, Chiticamp and different places.
9259 The question then is: Is that cheaper and is that easier to produce? Yes, you say it is in theory. Then how often do you break in, and if you break in 500 times you are going to blow your advertising budget on the "Good News Show". If you break in only 400 times maybe you can balance your books.
9260 I am basically back to my Mercedes/ Pontiac problem. Yes, your viewers want a Mercedes and you are trying hard to give them one. But if you can't, is there not some room here to manoeuvre? Does it have to be 500 break-ins? Does it have to be 80 per cent live coverage?
9261 Obviously you have to cover the election. Yes, Taber. But are there other areas where you could cut? Are you as sharp as you could be?
9262 MR. CULBERT: Commissioner, I think the reason we are pushing the live agenda is very simple, it is what the viewers have told us they want, both in their reaction, their communications, and the audiences come to our live programming.
9263 As far as the money goes, it would be money very well spent.
9264 We said earlier that Newsworld has fundamentally changed journalism in this country, not just broadcast journalism, and I believe that Tony's idea, for example, of the video journalists in remote areas of this country -- there are huge stretches in this country that are not served by any journalism, including broadcast journalism, except on the odd occasion.
9265 This is a fundamental change to sort of take cameras and people into places that don't get reported on ever, except where there is disasters, and tell their stories in advance. I think that would be a fundamental change for broadcast journalism in this country and money well spent.
9266 MR. BURMAN: If I can just add to that. If we went to a side room right now and said, "Okay, let's cut $4 million or $5 million out of the Newsworld budget", it's not a question of cutting the number of specials, because we go with the story to a great extent and some of it would be coverage that is available, Kosovo briefings, that kind of thing, but essentially --
9267 I mean, as I said in my opening statement, the Newsworld service is programming. Programming on Newsworld is produced by people. So in that sense the cuts would be fairly easy for us to imagine. They would be the cuts that would affect not only Toronto, they would affect our regional service throughout the country. They would undermine our ability to cover the world through foreign eyes. They would be these things not only that we identify with Newsworld, but I think that if you asked Canadians, "Why is Newsworld a valuable service to have?", these are the intrinsic things that they would think about and that they are drawn to.
9268 We have looked with incredible aggressiveness and tenaciousness at every single possibility, and we will continue to look at every possibility to save money, to avoid duplication, to do the kinds of things that I know you are talking about. I think we all kind of share the spirit behind what you are saying, because increases of any kind passed on to consumers are something that we don't take lightly.
9269 I think that we have to be practical about it, you know, in the sense that we have to think through -- at least we do, in terms of the people who ultimately look at the budget and look at the consequences of what we do, is that there are consequences and these are consequences that speak to our ability not to play to our preferences but to encourage Canadians to turn on a Canadian news channel and not CNN if something happens, you know. That is a real competitive threat for us. It's not only for Newsworld but it's I think CBC in general or Canadian television in general.
9270 MR. McQUAKER: Commissioner Langford, if I could just add, and maybe look at it another way, from an operational point of view because that is my area of specialty.
9271 If we really changed our on-air schedule to a large amount of taped programming and we didn't conversely have the amount of live programming we had, even forgetting Mark's point of view of how you interrupt a documentary and then do you come back to it when the live event is over and how do you do that, to continue to be efficient and effective we would probably then reduce our studio crewing components because they wouldn't be producing the ongoing daily live programming and then when something major did happen we wouldn't have crew available to deal with it because we would have reduced in that area to continue to be efficient.
9272 Just talking about those kinds of things, I mean, the efficiency and effectiveness, that is part of the reason why we have had to make the changes in Calgary and Halifax, part of the reason why there will be further changes.
9273 Some of the other things we have done over the years -- I mean, even when we started Newsworld did not have normal studio crews. We used much smaller studio crews than were industry standard. We used remote control or robotic cameras right from the very beginning in an effort to be as effective and efficient as possible.
9274 As soon as it became possible for us to do it we did compress our satellite signal, and that saves us about $1 million a year. It had an impact on revenue for a while because a lot of direct-to-home consumers who had the old style dishes couldn't receive us until they gradually went over to the new systems.
9275 We do all kinds of cost sharing, and Mark can talk about the hourly phone calls he has with RDI and other news-gathering organizations so that we can share in everything we do. I think we are always in -- getting back to your earlier comment about are there bean counters back there telling us when we run out of money, no, the bean counters are all inside each of our heads. Every one of us is always aware of those kinds of things.
9276 I think we are always trying to be as effective and efficient as possible and I just wanted to emphasize that.
9277 COMMISSIONER LANGFORD: But you are stuck with a conundrum here, aren't you? You have a situation, it seems to me -- and I know you will feel very free to correct me if I have this wrong, but it seems to me that we have this kind of a situation.
9278 If you want to sell ads and make money outside of your subscriber rates, you have to have product that will attract people who are looking to place ads, agencies. You have to have some kind of certainty for them. You have to have some kind of consistency. They have to know that the "Good News Hour" is on from whatever, 3:00 to 4:00 every day. They think people like "Good News" so they are willing to pay top dollar for a minute of advertising on that show.
9279 On the other hand, your whole focus and emphasis -- and journalistically I don't argue with this; we are just talking about the money now -- is on an area that not only doesn't make money because you don't know when it is going to happen and you don't know where it is going to happen and you don't know how long it is going to happen for, i.e. live events, but it actually probably costs you money because try as you might -- even at this point, by your own record here, you are interrupting shows all over the place and that must annoy people who want to place ads because their ads don't get placed and they have to be stuffed somewhere else on the schedule, so that must diminish the value of an ad minute on Newsworld because there is that uncertainty.
9280 It's not like an ad minute on YTV or something like that where you know precisely where it is going to be. You know, anything, any one of your shows, could get blown out of the water by the death of Mother Teresa, the freedom of Nelson Mandela and all the wonderful things you so properly celebrate in your opening video.
9281 It strikes me that somehow you are stuck here. You either have to accept that you are really not a business in a way because you can't operate like a business. You can't put a product out there, attract ad dollars, guarantee you are going to be able to deliver what you say. If that is the case, then you will always be coming back to us because you will never be able to make that money that you need to expand, to grow, to find the dream, the vision.
9282 I just wonder how you respond to that. Surely, there must be a time where you say, "If we are a business" -- to quote Mr. Burman -- "we have to balance the books. As much as we want to do live, live, live, live, we can't."
9283 MR. CULBERT: We don't see it as a conundrum. We see it as a challenge. We didn't start doing live this past six months. The past couple of years were probably the busiest, most dynamic periods in Newsworld history for live coverage. I could happily get a list of our live specials in 1997-98.
9284 I think the very problem you have identified testifies to the ingenuity of the Newsworld people who, while they were doing that and meeting the challenge, number one, the mandate of CBC journalism, and the service they feel they first and foremost have to provide the citizens of Canada, they provided that and they balanced the books -- and they will do that again.
9285 The new money they are asking for is to further expand the range of the coverage. They will continue doing live, but they want to go further into the reaches of this country, into the small towns to broaden the reach of that journalism and that mandate.
9286 They have balanced the books while doing some of the most dynamic, exciting -- I would love to take the time in a second to read you the news specials that have been on Newsworld the past two years. It is a breathtaking range of journalism and I think it is captured partly on the tape we saw earlier today.
9287 That is their job. The fact that they do it and still, through ingenuity of the other parts of the schedule and the other kinds of programming you speak of, balance the books is a testament to I think a great success story for CBC journalism.
9288 COMMISSIONER LANGFORD: But if we give you the rate increase you are going to make it even harder for yourselves, aren't you? I'm not arguing journalistic goals or principles, but you are going to make it harder, aren't you? You are going to have more SNG trucks out there, you are going to be covering more fires, and there just will be more and more chance to interrupt your regular programming.
9289 MR. CULBERT: Well, we don't mind it being harder. We will be doing our job better.
9290 MR. THRASHER: Could I speak to this question, please?
9291 We have less than 1 per cent credits, which in our business is extremely good. The clients that buy Newsworld are very well aware of the type of service we are and, in turn, to have preemptions is expected. To have less than 1 per cent credits against your displaced commercials is better than probably most of the industry.
9292 It is a foregone conclusion when you buy Newsworld that there is a very strong chance that some of the particular shows or features you buy will not run, but, in turn, we have the ability to make them up.
9293 MR. BULGUTCH: I should say, not every live special we do has no commercials. I mean, we don't interrupt a funeral, we don't interrupt a news conference, but we bookend it with commercials, though I suspect the money is in my head too and people do wander into that control room after a while and say, "Hey, what about a commercial here and then?"
9294 When I came to Newsworld, I, like Tony and like many of us, came from the main channel where public broadcasting was the only thing in our heads. When I came to Newsworld I used to run specials with no commercials. It just never entered my mind at the beginning until Ms Sellers said to me, you know, you have a Visa card that you want to put Newsworld on because we needed the revenue. So I became more adept at trying to figure out -- "Okay. They are into a pause here. We will take a chance here, we will take a two-minute break, and we will come back and pick it up. You know, the viewers will have to understand that we are a business and make due."
9295 So it is a matter of picking your spots and you hope you don't miss, you know, that clip that is going to be on "The National" tonight while you are taking your commercial. So we are not a complete loss leader, but clearly there are times when we don't run a commercial.
9296 COMMISSIONER LANGFORD: But you would be making more money if you could have more certainty in your scheduling?
9297 MR. BULGUTCH: Well, I don't know. I mean, I'm not the business person, but, you know --
--- Laughter / Rires
9298 MR. BULGUTCH: -- the live part brings more viewers to Newsworld and so I guess our overall numbers would go up and then --
9299 MR. THRASHER: From a value point, obviously, when we go to live programming, and I think there is some of it in the documentation, our audience quadruples tenfold. Obviously, we use that average audience to sell our inventory, so in turn it has a great deal of value to us in our entire schedule.
9300 MR. BURMAN: If I can just reinforce that. I think that is a very important point to make here because our credibility and how we respond to breaking news events determines how many Canadians are drawn to us. How many Canadians are drawn to us helps determine not only the scale but the quantity of our advertising revenue.
9301 I can introduce another element to this equation, i.e. our subscriber, the people to whom we provide this service. I think that we have been incredibly sensitive about that.
9302 What we are asking for, as you know, would be an increase of 8 cents a month, which is 96 cents a year. I think our concern was, as we went through it in reality -- and maybe later on when we kind of examine the money even more we can talk about not only the new initiatives but also our attempt with this money to prevent a gradual but real erosion of our service -- we are very conscious about whether our subscribers would tolerate this kind of an increase.
9303 If I can ask Christine Wilson from our audience research department just to summarize a survey that we did, which is in reference -- you will recall in the RDI submission that they also made reference to a survey of Canadians just to get some sense of whether there is an appetite out there for this kind of increase.
9305 MS WILSON: Thanks, Tony.
9306 In February and March there was a study done by Canadian Facts that replicated a study that was done in 1991 also for Newsworld. Basically, what the study was trying to do was find two sets of information.
9307 One was the relative interest in a service like Newsworld and the other one was to see whether or not those people who used Newsworld feel that it is good value for the money that they pay. So they went to 750 Canadians and talked to them about a 55 cent cost, they went to 750 Canadians and talked to them about a 61 cent cost, and they went to 750 and talked to them about a 63 cent cost.
9308 If I can just quote from the report, and I will just look down for a minute, sorry:
"Two-thirds of the current CBC Newsworld subscribers in Canada are personally interested in the channel, a level which is unchanged since 1991." (As read)
9309 And then in terms of the cost differential:
"An 8 cent increase in the monthly cost of CBC Newsworld does not appreciably alter the perceived value of the channel to subscribers. There is no significant difference in the high level of perceived good value CBC Newsworld provides to its current subscribers whether at the monthly cost if 55 cents or 61 cents or 63 cents. Three-quarters of current subscribers attribute positive value to the channel at these prices, a level which is no different than that claimed by subscribers in 1991 at a 59 cent monthly cost." (As read)
9310 MR. BURMAN: I guess at the heart of that, in our view, is a feeling, it is our belief, that our viewers, who truly appreciate the evolution of Newsworld since 1989 and since 1992, would endorse our continuation, you know, along that line, because we can easily turn ourselves into a channel other than the Newsworld that we know today. But that is not something necessarily that has any relationship to why it was created in 1989 or has any benefit really in terms of service to our viewers.
9311 COMMISSIONER LANGFORD: As heartening as those figures must be to you and as interesting as they are to me, there isn't a sense, though, I don't believe, that your viewers will embark on an endless road of this.
9312 This is where, of course, we keep coming back -- and I don't know how long I can beat this to death. You have spoken very well on it and we can move on now -- and certainly I will hear you again, I'm not trying to cut off debate on it, but there isn't a sense, I don't think, that they understand the possibility that the very direction you are taking, the very programming decisions that this increase will allow you to take -- and we will talk about those in a few minutes. We will go over your goals perhaps after lunch. I will be bound by the Chair on that -- there isn't a sense that people understand this could be the first or the second I guess of a kind of endless series of requests, because the fact of the matter is that you are going to have to keep coming back and raising the product cost, if I can put it that way, because it is not going to be offset by advertising.
9313 MR. BURMAN: Really, with respect, Commissioner Langford, I can't understand why you would be so certain in those premises twofold.
9314 Number one is that clearly our expectation in the next seven years would be, not only with the initiatives that we are proposing but also with a kind of a stabilization of our current service, that we would clearly and aggressively look for ways of savings and look for ways of maximizing our advertising revenue, because I think the point has to be repeated that the more viewers that come to Newsworld, whether it is for live specials or whether it is for documentaries, increases the value of our advertising.
9315 So I think, number one, that there is no expectation on our part that we would kind of keep coming back, you know. Our feeling right now is that Newsworld has evolved to a certain point, very much in tandem with what Canadians expect and want of Newsworld. I think that 8 cents a month is real and we don't take lightly, but it is our argument that it really would deliver a scale of service that a lot of Canadians would endorse.
9316 I think also this whole idea that we would be embarking on kind of a pattern of programming that would kind of threaten our financial structure -- I mean, Newsworld since 1989 has been incredibly rigorous and tough-minded in maintaining a kind of a sound business plan and I don't think there is any feeling that we would change.
9317 COMMISSIONER LANGFORD: But your own figures, if you are asking me, with respect, as you say, where I would get this notion, I get it from your figures. Your own figures show declining advertising revenues which only catch up, I think where they are now, to about the sixth year of your licence. They show flat program sales. They show pretty flat subscriber increases, remarkably low. They are past conservative. They are a bit depressing actually. They say to me that the only source of increased income for this service would be in subscriber rates because by your own figures.
9318 We can trot out your charts 4.1 and 4.2 if you like, you are more familiar with them than I am, but there is no other money coming in. That is where I get my certainty as to the fact that you will be back again -- which may not be a bad thing, by the way. I pass no judgment on it. I am just trying to delve into here where we are going in the sense of, as you say, balancing the books, financial fiscal responsibility and where we are going in this rate increase application.
9319 MR. BURMAN: But I think our proposal really is very related to specific initiatives and also related to stabilizing and strengthening the core of our mandate. I think that over the next seven years we are confident -- in spite of the uncertainty of our advertising revenue, we are confident that in the same kind of aggressive and imaginative ways Newsworld has pursued these ventures since 1989 we would pursue initiatives that would likely mean that we would be under sound financial grounding over the next seven years.
9320 It is not our intention at all to think that we would keep coming back in terms of subscriber increases. It is our feeling that with the kind of initiatives that we are proposing in tandem with RDI, because many of them I think would bring strength in terms of live coverage strength to both networks, it is our feeling that it would allow us to get to another stage in terms of our programming.
9321 I don't think we would, in seven years, try to move it up even more. I think that we would be satisfied with where we are.
9322 COMMISSIONER LANGFORD: Well, the road to hell, as my grandmother used to say, is paved with good intentions.
9323 I think maybe we should look at the advertising.
9324 Madam Chair, do we have a little more time or should we break? It is up to you. Should we just rock and roll here, as they used to say? Okay. We might as well go.
9325 THE CHAIRPERSON: We are following you, but not --
9326 COMMISSIONER LANGFORD: Not too long. People's stomachs are growling.
9327 THE CHAIRPERSON: Don't starve us.
9328 COMMISSIONER LANGFORD: We will try to wrap it up. I think we can wrap it up in the next half hour or so. I'm sure. I'm certain of it.
9329 Let's look at advertising. I must say that unless I put my rather dark interpretation on the down side of live broadcasting -- broadcasting by the way which I have no doubt is wonderful to have and that your viewers like -- and I go back to congratulating the sort of effort we saw in your opening video and the tough decisions Alison Smith has talked about, but in terms of money, if we look at advertising, it seems to me we have two possible scenarios for the rather conservative figures you give us -- well, there are three I suppose.
9330 One, they are just wrong, but who can deal with that. Two, they are low because of the very problem I foresee, and that is the more you go to live the more you cut into your certainty of programming and the more you devaluate the programs in terms of ad messages, not in terms of what the viewers are getting but in terms of people wanting that certainty to make sure their message is on on this show, uninterrupted at this time. So in a way you devalue that product that you are selling, the ad time.
9331 The other side of it is the scenario that is painted in your brief and that basically is that despite industry figures which show ad revenues climbing you don't think you are going to do very well because there is going to be lots of competition.
9332 To my mind, my scenario, as depressing as it may be for those of you who like to do live programming, at least has a foundation in something that I can draw causal connections to: too much live, not enough prepackaged impact on sales.
9333 Yours basically says to me, and I know you will correct me if you disagree: We don't think, despite the good figures out there, despite the fact that TV ad revenues are going up all over the place, especially for specialty channels -- we don't think we are going to do very well. I had trouble with that.
9334 MR. TRASHER: As I said earlier about live, live doesn't hurt my revenue. Again, less than 1 per cent of my entire schedule is actually credited, where I am not able to actually make it good with the client. My clients expect us to go live. They expect pre-emptions. They understand it and usually, it runs to their benefit.
9335 We were talking earlier about we might have the break going in, break going out. Well, if I have 10 times the audience for my normal, average minute, that has value.
9336 COMMISSIONER LANGFORD: Would you permit me to interrupt? I try not to do that but wouldn't it have a higher value though if there were no interruptions, if you could say that barring an incredible catastrophe, there won't be interruptions?
9337 MR. TRASHER: Honestly, no. I really don't think so, and the reason being is when you buy Newsworld, there are two components: one, obviously, there is the program element as to which program you are running; the other one is we use a lot of qualitative audience information and that is built on the type of person that uses that type of service. It tends to be more upscale. It tends to be more owner-managed or professional.
9338 So in turn, it is the program itself and most of -- when you are saying, generate more revenues, a lot of that is actually built into our live program and a lot of it is sponsorships of different features. We have a lot of business features that are sponsored and so on and so forth.
9339 We do very well in business-to-business type advertisers and upscale consumer goods. So I honestly don't believe that the live element impacts me because I look at my revenue numbers and I can see exactly what is credited and my credits are very low. So that is the first question I want to address.
9340 The second question was: Boy, your revenue projections look pretty bleak. First, it's adapting over to use the broadcast year. In the last six quarters that we have gone through, my revenue to the identical quarter in the previous year is down. So it is not our imagination. That is a reality.
9341 I guess the question then becomes: Well, how good are you doing? What kind of job are you doing if that is your reality? I have several pieces of information I would like to look at. One is a competitive framework of 1998, and again, because that is the last full year that you can do any comparisons.
9342 There are nine different media companies in Canada that in specialty television. If you take their share of specialty tuning and then their share of specialty revenue, only three of them actually generate more revenue than they do tuning. Number one is NetStar; number two is CBC; and number three is CHUM. So it kind of gives you an idea of how we compare with our competitors.
9343 Another one, just again to try and put it so you can have an idea of the type of job we do, is if you take the advertising revenues that are distributed by the CRTC and you take the adult audience, which we sell -- I mean basically what we work in is one, Newsworld, we're 25-54.
9344 There are two major demos in television: 18-49 and 25-54. I would like to obviously move farther up that scale because I am in a situation where after Vision Television, I have the highest percentage of my audience over the age of 50.
9345 Again, it is because the type of news service we are attracted that type of viewer that is looking for more of that type of information. But if you just take the advertising revenue and divide it by the average audience, out of the 13 stations that basically are in the same genre, adults 25-54, we are number two overall out of the 13. So we are doing a really good job.
9346 What has basically happened in the market -- and again, I believe you have the report that was done by MBS; on page 19, I think it gives you a really strong overview -- is that a lot of the new specialties that have been licensed all fit into this 25-54, and because they are new and in turn don't have a lot of information to rely on, they tend to be very price-sensitive and what is happening is the average cost per 1,000, which is the world we live in, has dropped dramatically over the last 18 months and is going to continue to be that way.
9347 COMMISSIONER LANGFORD: But that same study projects increases of -- I'm going by memory, but is it 4.6 per cent? A growth rate of 4.6 per cent in specialties?
9348 MR. TRASHER: Again, yes, there is a growth rate. If you take a look, for example, again using your 1998 figures, the two lowest growth rates of all specialty channels were: CBC Newsworld and TSN. It depends.
9349 Obviously, if you are a brand new station, you are coming on, you are going from 0 to 2.5 million, your average growth would be, I don't know, 1,000 some-odd per cent. But if you are growing at a marginal rate because you are a mature broadcaster in a particular area, 2 or 3 per cent growth, as a matter of fact, if you take a look, in 1999, we will actually be in a decline. Again, it is due to fragmentation of a particular demographic.
9350 COMMISSIONER LANGFORD: Your last projections, as I recall, from your 1992 application has very conservative numbers as well. It turned out that the numbers were better. Is it possible that you have underestimated, that here is your own study saying, okay, there is going to be some growth anywhere between 3 per cent for all media to 4.6 for television? I am looking at page 25 and 26 of the report you referred to. So that is not 20 per cent but it is positive. It is growth.
9351 Your own figures are actually on the decline until about the 6th year of the licence. Yet, the last time we went through this exercise, you had a similar projection, very conservative, pessimistic even, and that hasn't turned out to be correct at all. It is possible that your fortune tellers are perhaps not as optimistic as they should be or even realistic?
9352 MR. TRASHER: I think, one, to try and address back to 1992, because obviously I wasn't here at the time, but I think there was a lot of things that happened. Obviously, I think the acceptance of specialty TV as an advertising vehicle was probably much better than they originally anticipated.
9353 But all I can do is I can look at, for example, the last two years. In 1999, which ends in September, I will have a revenue decline of 14 per cent. This is not imaginary anything else; this is just the hard reality.
9354 I have competitors where 18 months ago, adults 25-54, $12.00/1,000, and again, if there are any questions about -- because that is the world I live in; $12.00/1,000 was really not a problem at all. I have competitors that I can show you the rate card that they price that at $5.00.
9355 Basically, what has happened is the niche that Newsworld was in and that we were able to maximize the revenue for is being attacked by a lot of new broadcasters that obviously, one, need the advertising revenue; two, don't have the established criteria Newsworld does, so they have to rely on pricing and its price insensitivity.
9356 Basically, what is happening is the specialty market is becoming commoditized and the advertising agencies -- because as I said, I can name off 13 stations that fit adults 25-54 -- can just play you off in the respect that while so and so will do this at 35 per cent cheaper, they will do this at 40 per cent cheaper. What are you going to do?
9357 COMMISSIONER LANGFORD: Have you always been sort of appealing to the Birkenstock crowd here or is this a change? Has your audience always been 39-54 and above or is this a change in the last couple of years?
9358 MR. TRASHER: That has been where our audience is. The composition of our audience really hasn't changed since Newsworld went on the air and the type of advertiser that wants to use Newsworld really hasn't changes. The problem we have is that now that we have this particular competition that is ready to sell it much more aggressively, that is where the change comes into play.
9359 COMMISSIONER LANGFORD: But in 1997, you came to us looking for a 50 per cent increase in advertising time, in commercial time. You wanted to go from 8 minutes per hour to 12 minutes per hour. I think you said at the time that you were selling out your inventory, that you were sold out months in advance. Has that changed?
9360 MR. TRASHER: There are certain periods that you do use 100 per cent of your inventory. But we are having to be much more aggressive about the way we use our inventory because again, not only do we have more stations and obviously there is a price competition, but there is an audience competition as well. What you find is your numbers are a little more erratic.
9361 So what you have a tendency to do is you sell a schedule and then you do what we call "pre comp", which is you are actually compensating while the schedule runs because you are checking your dailies to make sure at the end of the buy, you actually achieved what you had told the client you would achieve.
9362 So yes, you are using the inventory more. But it's logical that if the value of the audience is affected by being more services and if I drop 10 per cent of my audience, I have to use 10 per cent more inventory just to stay still. Then when you add into the fact that -- are you following me on that one?
9363 COMMISSIONER LANGFORD: I'm not sure where we lost 10 per cent of our audience though all of a sudden, I'm sorry.
9364 MR. TRASHER: I am just saying there are two things you can look at. One is obviously there is audience fragmentation. So if you lose part of your audience, which you do, I mean, all stations, be it CTV or Global or Newsworld, because of the competition, there is fragmentation.
9365 If you have lost 10 per cent of your audience, you need 10 per cent more inventory just to try to make up that loss. Then when you compound that with the aggressive rate tactics of a lot of the newer stations, and if they drive down the cost per 1,000 by 20 per cent, just to stay even, you need to use 20 per cent more inventory.
9366 So really, are we using the inventory? It is more seasonal. Newsworld is in a better situation than a lot of stations because winter, which usually is a softer period, is a good period for us and a lot of that is because of RSP type of clients. Summer is a softer period.
9367 COMMISSIONER LANGFORD: Well, there is no use me beating this to death but I must say that there seems to be a sense of pessimism here that I don't quite understand. I see the kind of glowing application. We are reaching millions and millions of viewers every week and people are turning to Newsworld. People trust Newsworld according to your statistics.
9368 You have had a 10-year jump on the opposition, CTV, which is putting out more or less a different product anyway, although sometimes one wonders. Yes, there is CNN, but there is still a sense of nationalism in this country that seems to draw viewers to you by the score.
9369 I don't share your sense of pessimism about losing to the competition and about declining numbers in that way. I hope you are not right. I see a sort of pretty energetic group here and a pretty terrific product and I am quite astounded quite frankly -- that is about all I can say about it -- to see such a straight line down.
9370 I see the same thing if we can move on to subscribers. I find -- I'm sorry, you have something.
9371 MR. TRASHER: Yes. I just want to make one more point. We have Wanda Muszynski, who was the creator of the report from MBS, and I just wonder -- because again, I would like to try to get a perspective that is backed away from obviously maybe Newsworld and maybe Wanda, if you could...
9372 MS MUSZYNSKI: I just wanted to clarify one thing and that is that there is seemingly a dichotomy between what Newsworld is projecting for itself and what is going on in the specialty arena altogether. It's true that in the specialty segment, advertising revenues have been very buoyant and the expectation is that they will continue to be buoyant by virtue of the new players that are coming on to the scene. That number of channels, those numbers of stations is very much proliferating.
9373 But if you take the specialty segment on its own and start dividing things up into different clusters, you have stations who are established, who have a whole lot of competition, where really from an advertiser's perspective, the audiences are virtually interchangeable.
9374 When I am buying air time on behalf of a client, I don't attach a whole lot of value to news in particular. I am chasing after an adult 25-54 and if Bravo! can give me that and History can give me that and Showcase can give me that, I put that in the same pot with Newsworld.
9375 Then, there are those stations who do something quite different, like a TSN, who are also very established, but because they are still relatively unique in their niche, their advertising revenues will continue to grow.
9376 Then, there are the newcomers who are starting from a very small base and their revenues are going to go from 0 to some number, all of which is to say, it is possible to say that the specialty segment is buoyant and will continue to grow but that some significant players are going to have a very hard time leaping ahead.
9377 COMMISSIONER LANGFORD: But why does it have to be you? You are on Basic. You have the edge over a lot of the newcomers. You have the audience. You are in people's homes.
9378 MS MUSZYNSKI: Yes, but if you think about what has been going on with respect to generalist television and specialty television, generalist television has been losing audience to specialty but they haven't been decreasing their rates. So from an advertiser's perspective, they don't move their rates but I am already paying a premium because they have lost audience.
9379 In order to compensate for that, I am going to go shopping some place where I can get a far more cost-efficient audience and the newcomers are providing me with that. So there is a gravity pulling downwards, if you will, in terms of CPM on specialties such as Newsworld.
9380 COMMISSIONER LANGFORD: And you people feel you can't counteract that with programming decisions and the other tools in your arsenal?
9381 MR. BURMAN: Well, I think we have. I think we have with great vigour over the years and I think that the very real and very close connection that Newsworld has with its viewers, I think, is evidence of that.
9382 But again, I come back to our earlier point. We can change Newsworld into a chicken farm but it is not going to be Newsworld. It will be a chicken farm. In reality, there are certain principles why Newsworld was created. There are certain reasons why viewers come to it. These are principles that within the framework of a rigorous business, these are principles that we feel we can't lose sight of without all of us -- and it's not just us -- but all of us sharing in Newsworld's demise.
9383 I think one element I can introduce as well is that with us it's not a question of optimism or pessimism, with us, it's a question of trying to make a realistic assessment and clearly in the realm of advertising projections, we have been dealing with a reality in the past six quarters that helps explain why we had to do what we did at Calgary and Halifax.
9384 So it is something that we are very practical about and very pragmatic about. I guess it is our feeling that we are not being pessimistic, that we are being very coldly realistic.
9385 MR. CULBERT: I just want to emphasize that point, that we are rigorous about responsible forecasting and because we have been like that and are very conscious of it, that is why we have been able to balance the books in the past. We insist on responsible forecasting so that we know what we are dealing with as we plan ahead in new programming initiatives, et cetera.
9386 COMMISSIONER LANGFORD: And subscribers, if we can turn to that, not very rosy on that front either. I find those numbers pretty flat. They are not deal flat but they are not jumping up at the speed someone would expect them to. Quite frankly, I simply don't understand those.
9387 MR. McINTOSH: Okay. Let me have a go at that. When we prepared our projections, we looked at our experience over the last three or four years in cable subscriber revenue. The growth there was less than 1 per cent. We know that basic cable growth is also slowing down. In the last two years to 1998, it has also been less 1 per cent. These are industry figures rather than our own and that is even really before the impacts of competition among distributors has taken place, which has really just been in the last year.
9388 So we know the past is only one guide to the future, but the competitive realities, I think, are also going to have an impact. We have noticed pressure on our fees and I think you heard my colleague from RDI saying the same thing is happening in the French market.
9389 So what we concluded was that cable was reaching a plateau of revenue growth for us. We didn't expect a drop in cable revenue, which you might do when there is competition introduced, but we did project net DTH growth in non-cabled homes. So even if we were wrong on the mix, depending on how much DTH took away from cable, we were just looking at the marginal impact.
9390 There is one thing I do want to update though on the projections. These were prepared in the fall of 1998, using information that we had at that time. We are now at least six months later. We have had the benefit of seeing how that has changed and in our fairly fast-moving business and we can now see that the DTH companies have done better than we had expected they would. They have had a very good Christmas obviously.
9391 We are also noticing though that perhaps it is slightly at cable's expense. We had assumed that cable would be able to fend them off but there is a suggestion that might not be happening now. There was a recent NSO quarterly report which showed a year-on-year subscriber drop, which I think is the first time I have seen that happen.
9392 So we do accept that there will be additional revenue to come from DTH subscribers over the course of the next seven years. But it is in the nature of projections that they are proved wrong over time and this one has been in that case. But there is a more than compensating offsetting impact from salary costs, which we have discovered in the last six months. So we are still confident that the business plan that we have filed stands.
9393 COMMISSIONER LANGFORD: What about just straight demographics. Are you looking at Statistics Canada, reports on new households set up? People's children grow up. They move out. They buy a television. They get cable. We are getting 200,000 and some immigrants to this country every year. Granted, they are lined up at the graveyards to die as well in the very demographics you are looking at, but still how does that balance out? Have you got the Statistics Canada figures on new households setting up as opposed to those shutting down?
9394 MR. McINTOSH: Well, I have seen them quoted. But again, I go back to what we have experienced in actual revenue, which to us is what matters. It's not so much the number of subscribers because that doesn't always translate directly into real revenue growth. I mentioned earlier the pressure on fees. That, I think, is going to intensify. We have seen evidence of that too.
9395 COMMISSIONER LANGFORD: What about American sales? Are you selling your service in the United States?
9396 MR. McINTOSH: Are you referring to Newsworld International?
9397 COMMISSIONER LANGFORD: Yes.
9398 MR. McINTOSH: That is a separate organization from Newsworld. Maybe I should pass this over to Harold.
9399 MR. REDEKOPP: Northbridge, as you know, is a consortium between CBC and Power Corp. So Newsworld is a net supplier and I think that the only business relationship it has with Northbridge is to supply programming. I think that the arrangement we would have to look at separately.
9400 COMMISSIONER LANGFORD: So any revenues from the United States would be reflected in programming?
9401 MR. REDEKOPP: In program sales, yes.
9402 COMMISSIONER LANGFORD: Then, why are they so flat -- I mean, not so flat, they are dead?
9403 MR. McINTOSH: Not in Newsworld's program sales. In CBC's.
9404 COMMISSIONER LANGFORD: So it doesn't come back to you at all?
9405 MR. REDEKOPP: Newsworld is a program supplier. So the cost that Newsworld -- any out-of-pocket costs that Newsworld incurs comes back to Newsworld. But beyond that, the business arrangement we have with Power is a separate entity and therefore is dealt with separately from Newsworld.
9406 COMMISSIONER LANGFORD: There is no source of revenues whatsoever there.
9407 MR. REDEKOPP: Perhaps I could ask our Legal Counsel to speak a little to that.
9408 MS CODY-RICE: Well, it's not really a source of revenue for Newsworld, except in the program sales and there is a certain formula for that. The consortium or the joint venture is between CBC and Power and the revenue from the sales in the States would come back to that joint venture.
9409 COMMISSIONER LANGFORD: I am looking at a magazine here called "Multi-Channel News" out of New York where there is quite a glamorous full-page ad for your service. Nothing comes back to you on that basically?
9410 MS CODY-RICE: No. CBC as part of a joint venture would benefit possibly from any net income to the joint venture, but Newsworld would sell on a formula which does not give it a -- it doesn't participate in profits of the joint venture as Newsworld.
9411 COMMISSIONER LANGFORD: I think we should break here. I thought I could finish it in half an hour but I do want to look at your five goals. I think it is fair to have a look at those. This might be a good stopping point. We have finished with revenues and then we could perhaps wrap it up fairly quickly after lunch with a look at the five projected goals.
9412 Thanks very much.
9413 THE CHAIRPERSON: We will be back at 2:00 p.m..
--- Recess at / Suspension à 1215
--- Upon resuming at / Reprise à 1400
9414 THE CHAIRPERSON: I apologize, I am the last one.
9415 Madame Santerre, we will continue.
9416 MS SANTERRE: Yes, we will continue part of this afternoon with a question addressed to CBC Newsworld.
9417 Mr. Langford.
9418 COMMISSIONER LANGFORD: Good afternoon. I hope everyone had a good lunch. I hope you weren't as foolish as I was and tried to walk out in this weather. It was dreadful.
9419 We finished, I think, with advertising revenues, as far as I want to go with it unless there is something other people have to say here. On the revenue side I think we have finished.
9420 I would like to finish up this part of the questioning by looking basically at your goals, your five goals should you be successful in obtaining a rate increase, what you are going to do with the money, and what you might do, according to your own charts here, if you don't get the money. I think that will conclude what I have to say, barring some kind of last minute inspiration.
9421 So I guess the first question I would ask you about the five goals is: Are they priorized -- one of those dreadful words -- properly? Have you numbered them in the order of most importance to you or are they all equally important?
9422 MR. BURMAN: No, they are numbered in priority, although I can't stress enough -- and I suspect I will have the opportunity to elaborate, or we will have the opportunity to elaborate -- that we feel very strongly about them all. In other words, even the whole idea of internships link so much to video journalists, et cetera, et cetera, but they are in order.
9423 COMMISSIONER LANGFORD: So again, not to assume -- not to lead you to think we are going in any one direction or another, but if you were -- for example, you have put a cost of 2.4 cents on the expansion of your capacity to report news through these SNG vehicles, et cetera. If you were to get a rate increase of 2.4 cents, would you in fact go out and buy the SNG trucks and just not do the rest, or is that just too simplistic?
9424 MR. BURMAN: I think it is too premature for us to be certain. We would certainly consider that our expansion of the live capability would be a priority, and the priority certainly in terms of how we spent that money.
9425 But we also feel quite strongly in terms of regional reflection that perhaps a part of it would also be directed in that way. But that is an assessment that we would make once the decision was made and we looked at our overall plan.
9426 COMMISSIONER LANGFORD: Now, did you buy one truck after the 1992 renewal when you were given a rate increase? I think one of the things you were going to buy was one of these vans or trucks. Did you in fact do that?
9427 MR. BURMAN: Yes. Let me invite John McQuaker to be quite meticulous in terms of what we did since then.
9428 MR. McQUAKER: What we did, Commissioner Langford, was we installed a flyaway SNG unit, something that comes -- flyaway. It's sort of a misnomer, it comes in about 20 suitcases and weighs about 1,000 pounds.
9429 But we installed a flyaway into a truck and based it in southern Ontario so that we could get much more use out of it than had previously been the case. Then we made arrangements to access three other SNG vehicles through a private supplier, and those are based across the country so that we have one based in southern Alberta, we have one based in the National Capital region and we have one based in Nova Scotia, so that we have a little bit of a geographic coverage. So that is really the answer to that question.
9430 COMMISSIONER LANGFORD: What is the range of one of these? Just out of curiosity, to try to get a sense of how many of them -- obviously in a place like Canada I guess you could use as many as you could get your hands on, but what do you feel is the range of one of these vehicles?
9431 MR. McQUAKER: What we try to base it on is in a normal day if you were going to do a story for a particular program -- not an emergency story where you would place the truck in the location for two or three days for ongoing coverage, but in a normal day, if it was leaving from the base in the morning, if you were trying to do something without getting into overtime costs or anything, that would be incremental costs on the day or to the show, we assume about roughly a three hour driving radius from the base.
9432 So that would allow you to drive somewhere for three hours, set up, do the interview, provide the live satellite pictures and then, within about an hour or two from that, to tear down and drive back to base.
9433 So as you can see, if you draw -- you can imagine if you draw a three hour circle around Calgary you have a lot of Alberta and B.C. and Saskatchewan that clearly if you are going to get, for live coverage or a live interview or a live element, to a given program, you are already into at least a longer day with overtime or an overnight with costs such as lodging and per diem and extra travel costs.
9434 So really four trucks on a map with three hour radius of those locations leaves about probably 95 per cent of the map not covered.
9435 COMMISSIONER LANGFORD: Probably a lot more.
9436 Are these basically a story a day operation? I suppose if you had local stories you could do more, but what do you try to count on in terms of the usage of these vehicles?
9437 MR. McQUAKER: It really does vary because of the nature of the story. I think Mark can probably expand on this.
9438 But if there is a major ongoing event a truck may be parked in one location and it may be on the air for several hours. It could do as many as 10 or 15 or 20, either hits or stories or interviews, or however you want to call it, or if it is for a particular program for a particular interview that you need for that program, then it could be -- yes, then it could be one a day.
9439 COMMISSIONER LANGFORD: We were talking earlier about kind of balancing programs. Perhaps that is not a fair word, but weighting programming -- I'm not quite sure how to deal with it.
9440 But obviously you favour live. Live is where you want to be. Live is your raison d'être and you want to bring the news as it happens and the information as it happens. I took you through some questions as to whether you had considered going the other route to save some money, and you have obviously, as I understand it, considered it, but your preference is to go live.
9441 On the other hand, I wonder, these trucks, vans, SNG units, do they end up driving the news rather than the other way around? Because you have the technology you want to get out and use it so you are covering more. You are covering more fires, if I can use that generic word, rather than sitting down doing more thoughtful pieces, deeper pieces, pieces that may take some research? I know television is pictures, but is the temptation overwhelming to get out and use the truck because you have it?
9442 MR. BURMAN: I know Alison wants to jump in, but let me just say one thing as a preamble. You have used the term "fires" twice now. I mean, Newsworld doesn't cover fires, and I think that we are incredibly judicious and incredibly careful about how we use our live capabilities.
9443 I think if anything many people focus on the contrast between our approach to live reporting and live event coverage compared, for example, to CNN. So I think that we are incredibly cautious about it, and I think that if we were in a situation of having an incredibly small country with many, many satellite facilities I think that we conceivably would have that problem, but in a country this big I don't think the existence of four or five or six trucks will drive our coverage.
9444 I know Alison wanted to add something.
9445 MS SMITH: I wanted to, I guess, draw some distinctions when you talk about live programming. We do certainly cover live events, which may be the NATO briefings or the arrival of the refugees at Trenton Air Force Base, those kinds of things that you watch as they happen.
9446 But I also do a live program every night where I am based in a studio and do live interviews. Sometimes they are interviews that I might have taped at 3:30 in the afternoon, if that was the only time the guest was available.
9447 But I don't want you think that when we talk about live programming it is only live events. When we had some news break, for example, about the troops that were in Edmonton preparing to go over to Kosovo, we wanted to be able to interview some of those soldiers about their training and what they were expecting when they were going to be in Macedonia and those kinds of things. So we tried to -- we arranged to have the truck go to where those soldiers were training to do some interviews with them. That is how we would use the truck.
9448 Now, that is live programming, in a sense, because it is a live interview that is happening while we are on the air, but it doesn't fit into that sort of classic definition that you might be thinking of where we watched Julie Payette take off into space.
9449 I do a live program, but it is a planned program in a sense where we want to use those kinds of live elements.
9450 MR BULGUTCH: But you are right where you say drive the coverage. The answer is, in part, yes, and that is a good thing, not a bad thing.
9451 Right now our coverage is driven exactly by the same thing, the resources we have. So we have the resources. We have a truck in Calgary so we can go, let's say, three hours one side or the other of Calgary, but if we want to go into the interior of British Columbia, how do we get there. How do we get there? The answer is, you can't unless you have a truck. So it is a case of build it and we will go, because an assignment editor says "There is a good story in Mission, B.C., too bad I can't get it to today." So if we have a truck, suddenly you can get to it.
9452 So yes, you are driven by it, but not necessarily to a fire, to a meaningless story, as you may be implying. You go there because there is a good story and, yes, finally we can get there. That is the difference.
9453 COMMISSIONER LANGFORD: I certainly didn't mean "fire" in a derogatory way, and if it came out in any way in that way I want to apologize. I meant it kind of in the sense of an event, a sudden cataclysmic event call it.
9454 I'm looking for something, though, short of the Swiss Air disaster, because obviously you would walk, crawl, run, however, to get there, rent taxis. You would make it. Somehow you would make it. If you were fortunate enough to have that truck there and you made it in style as it were -- but I assume that your news agency would make it to that story one way or the other.
9455 But I am thinking about whether it lowers the bar. That is really what I'm driving at, whether it lowers the standard, whether because you have the technology you have to use it, you have to justify it. You have the truck so you are driving to an event that you wouldn't have covered without the truck and probably, on a scale of 1 to 10, may not have needed to be covered.
9456 MS SMITH: I can't, from my studio, interview someone in Kelowna even though they may be the person who is an expert on educational reform that may be an item in the news. I can't interview the person who may be in Biggar, Saskatchewan who knows something about farm policy that has become an issue in Ottawa because we can't get to those people unless they are prepared to get in a car and drive to Winnipeg or prepared to get in a car and get to Vancouver.
9457 It is access to those kinds of things. The story is what always drives us, and it is our opportunity to get to those kinds of voices and those kinds of stories that we think this capability will give us. It gives us an opportunity to actually get to those places where we know the stories are and where we know those voices are and those opinions are that are a part of the national debate that we think we are there to help encourage, and we can't get to them.
9458 MR. McQUAKER: If I could just widen that, Commissioner Langford.
9459 I don't think the technology drives the story, but the stories do drive with the technology. Television certainly has changed in the last several years. Fifteen years ago essentially there weren't really live SNG capabilities and as technology changes you have to take advantage of it. You can't just stay behind and let everyone else move forward with technology.
9460 So I think in terms of satellite news gathering facilities, clearly if the news network is going to be a live news network it has to have a certain capability and it has to do that as best it can.
9461 One of the things that has happened in the last 15 years is these kinds of vehicles have become available and they are cheaper than they were before and you can use them. But it is just the way -- I mean, if technology hadn't changed we could still be significantly on film, which every news organization was up until the mid-1970s to the early 1980s, and if that is the case the only way you could go live was if something was planned weeks ahead where you could rent the facilities and put a big production vehicle in place and if anything else happened, if you were on film, the quickest you could get it on the air maybe might be an hour after it happened, but normally you are looking at several hours.
9462 I think you have to try to stay up with technology and try to be in the forefront if at all possible, especially if it allows you to do something more cheaply and more effectively than you might have been able to do it before. But you can't ignore the technology as it changes.
9463 COMMISSIONER LANGFORD: But you are confident, as Alison Smith is, that it is not going to reduce the intellectual rigour, shall I say, with which you are pursuing stories. You are not going to substitute that just simply with flash pictures?
9464 MR. BURMAN: I don't think there is any -- earlier in the day I mentioned that we do have second thoughts sometimes about the directions we may take on stories. I think on this aspect we never have a second thought, because I think that we are incredibly cautious and restrained about it.
9465 We do value -- and this is, I think, the unique -- and we are very proud of it, the unique contributions that Newsworld can make to this broadcast system is that we are proud about the range and the depth of our programming and our live capability is an integral way of getting to that depth.
9466 MS MIRONOWICZ: What live allows us to do is it allows our audience to see the event for themselves, to see the whole event, and then to make their own decisions about its importance, et cetera, et cetera. We have a very solid programming base, weekly programs, nightly programs that will often take the live event, expand on it and elaborate on it, give it a context, help Canadians understand how and why it is shaping their lives.
9467 COMMISSIONER LANGFORD: Maybe a nice segue to goal two, the video journalists.
9468 In paragraph 107, just following up on this, you talk about these video journalists and you say:
"We will establish a Newsworld presence in five new locations. These VJs will act as the first line of defence to report breaking news, they will allow us to get to news stories in a fraction of the time it now takes us, and it will lower the threshold of what is designed as news."
9469 On that same theme, can you explain that last sentence to me?
9470 MR. BURMAN: Yes. I think again an aspect of real pride for Newsworld is that I think we feel that we have a broader definition of news than some news organizations in that we don't assume that news has to be ratified by a news conference by something that flows from a press release, that people want information and want news that matters in their lives and that is news of all sorts of aspects of life.
9471 Which is why we are incredibly proud about our arts and cultural coverage, we are incredibly proud about how much of a priority health and education has been, and that we have always put the political part of this country, however important it may be, particularly Newsworld, that we have put the political part of this country in a proper perspective.
9472 Again, with the capability, both through an expanded live capability as well as through a network of video journalists in unserved parts of Canada, I think that what will happen over time is that stories that right now appear marginalized in the national media that really aren't marginalized because what is happening in schooling and what is happening in health care in many parts of this country are as real and as important as what may happen in front of us, whether it is in Ottawa or Toronto. So I think the expression "lower the threshold" can really be a synonym for expanding the definition of news.
9473 COMMISSIONER LANGFORD: It's sort of sack the writer here. It's an expansion, not a lowering, in effect.
9474 MR. BULGUTCH: You see, it lowers the threshold only because again -- I mean, you know how a newsroom works. I mean, an assignment editor looks around at what he or she has at her or his disposal and says, "Okay. I have a camera here, I have a reporter here in the big city of Toronto and there is an education story we can do. We will do it." But in London, Ontario they have schools and students and parents who presumably have ideas and problems that might also deserve an airing, but it's so much easier to get the story in Toronto why would we go to London.
9475 But if you put a video journalist in London, then, aha, the resource exists. So suddenly it is not a big deal to go to London, Ontario. The video journalist gets the story for us and bingo you are on the air from London, Ontario for the first time in half a century.
9476 COMMISSIONER LANGFORD: If we were to place one of these video journalists, let's take one of them -- and you can choose, interior British Columbia is find by me, whatever you like -- we put this person into this spot, we saw a little bit of it, your blurb from Bosnia there, but it went by pretty quickly, I'm looking here at what this person does in an average day. They have to find the news. It seems they have to videotape the news. They have to write the script. They have to produce it, I guess, facilitate it. Does that mean produce it? They have to get the guests I guess. They have to brief themselves on the guests. On top of that they are expected to contribute to RDI and to the radio network.
9477 Is that feasible? Can one person do that?
9478 MR. BURMAN: Well, the answer in a word is yes, within reason. Clearly, this description is clearly a reasonable one in the sense of when we have one individual with that range of responsibilities, then we don't expect that individual to deliver that list in one afternoon or one day or over a period of time. I think it is a question of one person bands. It applies all the time in radio right now. Newspaper writers operate by themselves.
9479 So I think the idea would be that -- and we now have developed -- I think Newsworld has developed a real experience in dealing with video journalists and we know that -- for example, we have learned that video journalists who work by themselves, they need far more support from home office, whether that is Calgary or Halifax or Toronto. That is something that we have learned and I think we have applied that lesson.
9480 But I think that as long as our expectations of this individual are reasonable, and I think we have enough experience now that we are generally of that bent, then it works quite well.
9481 The idea of RDI or radio is something that some people clearly are quite capable, in two languages -- some people clearly are capable in translating their TV pieces to radio, others aren't. I think our goal is to maintain what we have right now, which is a mix of different people with different skills.
9482 COMMISSIONER LANGFORD: Can you take me through it just very quickly. I don't expect a video journalist course here. I haven't paid the tuition; didn't fill in the application.
9483 But are we talking about someone who is working out of their home here or out of a small office? Have they got any support? What is a day in the life like for one of these people?
9484 MR. BULGUTCH: I would imagine some would work out of their home.
9485 Newsworld is more than newscasts, so it's not that they are necessarily looking, again, at lowering the threshold. They are not looking for a fire or they are not looking for a train to go off the tracks in their community before they call head office. They are in the community, so they are suggesting things for our programs as well as our newscasts. You don't need hot news.
9486 So they can call a program like "Dayside" that we do every day in Calgary between 1:00 and 3:00 eastern time, which is a topical program just looking for good stories from the country and say, "You know, there is an interesting story here where this teacher has set up a daycare centre" -- you know, make up a story -- and Dayside will say, "Well, that's pretty good. Why don't we do that?"
9487 Then you have several choices of how to do the story. The video journalist could go and do some shooting at the daycare centre for a while so you have some pictures. Then you could set up a double-ender interview, since there is no time pressure to get it on this minute. You can do the interview, as Alison suggested earlier, and then get that tape to Toronto or to Calgary, and then you put together a story. So that the video journalist isn't necessarily the reporter on that story. That's the facilitating part.
9488 In other cases, the other way you could do that same story is you do a piece on it at the end of the day, where you do an interview with the teacher, you shoot a round, you get all the pictures you need, and then you send it in to Calgary or Toronto where it presumably it would be edited. You know, you wouldn't expect this person to edit it because then you would have to give more equipment. You would have to have the equipment there as well and there is really no reason if the story isn't time sensitive.
9489 So there are many ways to go about doing it for a video journalist.
9490 MS SMITH: There is also a wonderful synergy between the way a video journalist operates and the use of these SNG trucks. Since you raised the Okanagan I will jump on that one.
9491 You may know that they have had a tremendous snow pack in the Okanagan over the past winter and that they are very worried about flooding. I could see that if we had a video journalist located in the Okanagan Valley that they could in fact go and put together a piece about the conditions, I suppose, that have everybody worried about the possibility of flooding and the lake levels and all of that.
9492 If you also then had the SNG truck and the availability of that, and those are the kinds of things that you can plan, then you can set up the local water resources guy so that we can run the piece and from Toronto we can also do interviews.
9493 Normally, we wouldn't do these things for only one program. Usually, we plan these things together so that, for example, we may be able to do a local resource story for our program and there may be another story in that particular area where we could bring a guest to the truck and another program may be able to access that as well. So the two things kind of work together.
9494 COMMISSIONER LANGFORD: Have you had enough experience with this now that you are confident that these people will be able to keep mind and soul together, or eventually does your experience tell you that they are going to be screaming down the line at you after six months saying, "I need a producer. I need help. I can't do this alone"?
9495 MR. BURMAN: No. I think our experience is that as long as we deal with them with care and with consideration that it works well. It works well.
9496 I started at the CBC in the 1970s in radio documentaries. My first documentary I was assigned with a technician and then halfway through the documentary the CBC -- I can't remember the catalyst, but the CBC took technicians away from radio documentary makers. I completed the documentary on my own and I found it incredibly natural. I did my editing by myself. It took longer than had I been working with one or two people, but people said, "Hey, that's life."
9497 I think television has learned the same thing. But I think the added advantage of this kind of initiative is that by having one individual and by placing them in these communities, that this individual then becomes the lightening rod and the representative for the CBC and for Newsworld, and these communities right now have no such CBC presence.
9498 MR. McQUAKER: If I could just continue, Commissioner Langford.
9499 There are different levels of stories and there are different kinds of stories.
9500 Clearly, if a story requires the resources of more than one person, what you expect from the video journalist is that first phone call to say, "Hey, this one is big and you better send help." I mean, it's not that the video journalist does absolutely every story all the time on their own, but in what we would call underserved areas where we have no representation now we would get more stories that could be done, most of them by that video journalist.
9501 But they are also there so that you have eyes and ears out there and they can call for other help so that, Alison's example, if we follow up on that, we can say, "Okay. If we are going to do that story two days from now or three days from now, we can put a truck there", or if something major does happen we already have somebody there to start the reporting and we can get other people there.
9502 COMMISSIONER LANGFORD: And there is no contradiction in directions here in your mind?
9503 In one sense, I could see describing a video journalist as someone who, talent aside, just because of the exigencies of life, just is simply doing timeless pieces, if you will, because they can't be filing the same day, barring a miracle. On the other hand, you have this SNG presence which is going for, you know, more news as it happens. Is it just part of the package or are they in conflict?
9504 MR. BURMAN: I think it is part of the package and I think the range of contributions from this individual would be as wide as the range of contributions we get from our other units. I think, again, a network like Newsworld that has a real breadth in its programming can use these contributions in a multitude of ways.
9505 COMMISSIONER LANGFORD: I'm moving right along, then, to goal three. I don't want to tie up too much of the afternoon.
9506 This goal three deals with joint projects with your sister service on the French side, RDI. I gather some of that is going on now obviously. This "choc" program is on everyone's lips and seems to have found a chord.
9507 On the other hand, it depends on this increase I suppose; it has been costed. What happens with this spirit of co-operation if the increase doesn't go through?
9508 MR. BURMAN: Let me just again, very quickly in kind of a wider sense, give you the brief history of how this project came about. We have an incredibly close collaboration with RDI. As I mentioned earlier, we combine maybe four or five times a day and often 20-25 times a week on various programs and we meet regularly. It was really in the context of one of those meetings that we said, "Look, since we are working together and we do happen to have a very similar take on a lot of stories and a lot of programming issues, let's come up with a programming idea that would build on a relationship that would involve young people, would involve new technology and would embody, in our view, the best of both networks", and hence "culture choc" was created.
9509 But both networks are working under real constraints and real budget pressures, and we had a real tussle as to whether or not we could embark on this in a way that would have permanence and would have continuity and would evolve into other things. We said, "Look, let's start this project and see how it takes off." I think it has taken off, but we are practical enough to know that we have limited resources and our ability to go and to commit to this project beyond a certain amount of time is real.
9510 Clearly, because it has turned out to be such a success I think to both audiences, for both networks, our hope is not only to build on it by continuing, by making it a year-long series, but I think what we have discovered is that it has attracted both in Quebec, in the French-speaking part of Canada, as well as across Canada, English-speaking people, it has attracted just enumerable numbers of bilingual and almost bicultural young people of both languages that we are hoping that we can build on this program and create other ventures and other kinds of co-productions along the same spirit.
9511 COMMISSIONER LANGFORD: So the "culture choc" is here to stay and what we are talking about now is whether you are going to add to that momentum?
9512 MR. BURMAN: No, the "culture choc" is here to stay on a 13-week basis, and we hope, as we have costed it on our rate increase, that if we get this kind of infusion that we could extend this to a year long and that, in addition, we can build on "culture choc" and hopefully create other examples of kind of a bicultural-bilingual co-operation between the two networks.
9513 COMMISSIONER LANGFORD: I have some difficulty, both with that goal -- I don't have any difficulty with the philosophy behind it obviously -- and with the next goal: Increase independent production. It's unsure to me about how much of this you would be doing if you didn't get the rate increase. Some of it you seem to be doing now and have been doing under the present circumstances.
9514 The fourth goal of independent production is further I think -- I don't know. The future of it or my ability to see the future is further clouded by the sense that you are also depending on grants from granting agencies. I just wonder how hard these plans really are.
9515 Are we at a stage where -- how confident are you that you can do these things if you get the rate increase?
9516 MR. BURMAN: We are confident in the sense that I think we have kind of outlined it fairly explicitly.
9517 Again, in terms of just focusing on this goal, a unique part of Newsworld I think in the eyes of a lot of Canadians is the fact that it is probably, I think unquestionably actually, the highest profile showcase for Canadian independent documentaries. Whether it is "The Passionate Eye" or "Rough Cuts", it's a part of our programming that really does connect with a lot of people and is part of our contribution to the wider community that we are very proud of. I think what we have done is we have outlined a way of enriching it, particularly in tandem with RDI.
9518 I think a wider issue that you alluded to at the beginning, and I don't know whether now it's appropriate to get into or whether we can do it a bit later, is that the rate increase is intended, as we outlined, to go to the financing of these goals, but it is also to reinforce the core of our mandate.
9519 In other words, as we look ahead we realize that with the projections that we have in terms of advertising revenue, with the projections we have in terms of subscribers, the subscriber revenue, we clearly have a challenge ahead of us. I think that the rate increase is not only intended to provide in detail the goals that we have outlined here, but also to ensure that a lot of the core mandate programming that we have is retained and is strengthened, because otherwise we clearly do have a financial struggle ahead of us.
9520 COMMISSIONER LANGFORD: Actually, I'm glad you brought that up and we can go to the training aspect afterwards, which is a fairly focused thing.
9521 MR. BURMAN: Sure.
9522 COMMISSIONER LANGFORD: I have to confess, of this application the one part I simply couldn't get my head around, and I don't know whether it was the weather or just my head, that part of the brain that doesn't do numbers or something, but I can't quite understand the impact of this rate increase, get it or don't get it, on programming. I just don't get it. I'm sorry. I'm not saying you don't get it. I don't get it.
9523 If you look at your charts -- and I don't like charts, but I guess we are all stuck by them in the end. If you look at Table 4.1, reduced to its simplest terms what this tells me -- and when I'm finished I may tell more about myself than anything else -- is that if you don't get the rate increase for some reason $23 million approximately is going to come out of programming; then we go to Chart 4.2 and if you do get the increase, other than Year 1, a few more million, a million or so a year, will go into programming and yet none of the increase is for programming.
9524 I mean, it is all set out in your application as I understand it: 2.4 cents for the truck, 1.6 cents to create the video journalist. I can't understand what is happening to programming in this. It's probably just my inability to do numbers, but I just don't get it.
9525 MR. BURMAN: I appreciate the question.
9526 I guess I will answer it in a broader sense, and I would like to invite Iain McIntosh just to review some of the numbers.
9527 First of all, let me clarify that our goals are all directly related to programming, that video journalists produce programming. Satellite trucks that enable our reporters and our on-air journalists to report into our programs create programming. An increase in investment in independent documentaries creates programming. I think we talked about 20 Canadian documentaries. In terms of our collaboration with RDI, the goal of that is to produce extra programming. So it is not intangible.
9528 Probably the only area that specifically is training is the internship program which, again, ultimately -- and I don't have to tell you about the number of our prominent Ottawa reporters who started in their careers as CBC interns. Even these people, ultimately, sooner than later and probably very soon, their work will be translated into programming. So everything listed in terms of our goals has an impact, a direct impact, on what we put on air.
9529 But before I get into the question or we get into the question of "What happens if", why don't I just ask Iain just to clarify the numbers of both 4.1 and 4.2.
9530 MR. McINTOSH: The process we followed was that we established the five goals that you see here and we then calculated the cost of implementing them.
9531 If these goals were simply added on top of what we currently do, then there would have been a subscriber rate increase of approximately 12 or 13 cents. We realized that was unrealistic so we decided that we would set a self-imposed cap of 8 cents on that. That 8 cents was the inflation-adjusted value of the 1992 rate.
9532 So what that means is we will have to find some of that money ourselves by redirection of existing program spending. So I think the reason you couldn't see the add-on effect of each of those goals in each year is because we are assuming that we will find part of that ourselves.
9533 The difference with Table 4.2 and Table 4.1 is that with no increase, then the $23 million or $24 million you referred to is simply a pure cut.
9534 COMMISSIONER LANGFORD: But why isn't there a cut even with the increase? If you need 12 to 13 cents and you are only getting 8, you are going to have to cut somewhere.
9535 MR. McINTOSH: The difference there is that it is not so much of a cut when you have something else to replace your programming with. The goals will provide programming that will fill the air time.
9536 COMMISSIONER LANGFORD: So have you assigned some of this money somehow to programming? Because in 4.2 the programming numbers go up, not just the product but the actual dollars.
9537 MR. McINTOSH: That's right.
9538 COMMISSIONER LANGFORD: So you have assigned some of this video journalism and some of this SNG money to programming, is that what you have done, to make the numbers go up?
9539 MR. McINTOSH: No. If you look at Table 3.1, which shows the cost of proposed goals, those amounts, the operating costs, are added to programming in each year, and you can see those go up over the years.
9540 So those amounts are added into programming. There is also an amount taken off for redirection.
9541 COMMISSIONER LANGFORD: If I look at 4.1, let's just take Year 7, in programming and production you have fifty thousand, six hundred and forty-one thousand -- or $50 million six hundred whatever -- $50.641 million; it's easier to do it that way, and if we flip over to 4.2 it's $51.752 million. Why are those numbers different.
9542 MR. McINTOSH: Can you tell me which table you are looking at?
9543 COMMISSIONER LANGFORD: I'm sorry. I'm looking at Table 4.1 on page 39 and Table 4.2 on page 41.
9544 MR. McINTOSH: Is this Table 4.1 revised because there were subsequent tables provided?
9545 COMMISSIONER LANGFORD: Well, if they were I don't have them, which adds a whole other twist to the plot.
9546 Okay. I have them now. I'm looking at 4.1 and it's not that far different, is it: $50.533 million; and 4.2 is still $51.752 million.
9547 So they are not the same still. Why aren't they the same number? That is basically -- or is there yet another table that I don't have?
9548 MR. McINTOSH: No. I don't think so. Let me just take you through this one.
9549 In Table 4.1 there is $50.533 million and then a required reduction of $4.612 million giving you a net $45.921 million.
9550 In the case of with a rate increase, you would start with the 50.533, add the cost of new goals which is in that year 5.790, then take off 4.571 as a redirection to end up with the 51.752.
9551 COMMISSIONER LANGFORD: So that is how you are doing it?
9552 MR. McINTOSH: Yes.
9553 COMMISSIONER LANGFORD: So you are putting on, taking off. Okay.
9554 So my last question then -- I understand how you're getting to 51.752 on 4.2 but my question is: The $23 million out of programming, why again doesn't that just stay the way it is? You don't get the trucks and you don't get the video journalists. Assuming the increase doesn't go through, you get nothing?
9555 MR. McINTOSH: Right.
9556 COMMISSIONER LANGFORD: Why isn't it business as usual? Why is $23 million coming out of programming?
9557 MR. McINTOSH: What we have assumed is that we need to balance to a carry-forward surplus of $1 million each year. Now in order to do that, we would have to take out approximately $3 million each year and it has to be from programming because that is essentially where the discretionary spending is.
9558 COMMISSIONER LANGFORD: So this is where your inability to sell ads and to attract new subscribers and what not catches up to you and that is the only spot left to pull it out of.
9559 MR. McINTOSH: Costs are increasing faster than revenues, yes.
9560 COMMISSIONER LANGFORD: There is no other -- I guess there is not much left, is there? You people are the experts at this point of many years of paring to the bone.
9561 MR. BURMAN: No, and just to give you a sense of what I know is not easy to understand just in terms of relative values -- but to give you a sense of the scale of that cut, our programming budget is approximately $46-$47 million now. So if we are talking about a cut of $24-$25 million over seven years, we are talking about a cut that is on the average about maybe $3 million a year. The cut of the eight people in Calgary, the staff reductions in Calgary, and the 10 positions in Halifax, produced a savings of about $1 million.
9562 In other words, if one identifies -- and the scale of the cut we are talking about is $3 million per year -- so if one identifies Newsworld programming as being what we produce in Toronto, what we produce in our regional centres, what we produce in terms of our documentaries as well as our live coverage, what we are talking about is we are talking about a significant retreat from the status quo.
9563 I think it is really important because as I explained and argued before the break was that we don't live in a world of pessimism or optimism. We are brutal, cold-blooded pragmatists at this stage and I think that those of us who painfully -- and I am talking also about the people in Calgary and in Halifax and the people soon in Toronto who have lived through the recent staff reductions. I think we know how painful that process is. But we also know that we have to deal with the realities that we are dealing with.
9564 So I think it is really important that we kind of understand the scale that we are talking about, and I will tell you, and I think this must be self-evident but let me reinforce it, is that if the group of us here could come up with another way, this group that collectively since 1989 is probably unparalleled in coming up with clever ways of saving more money that we would. But there are limits and these are the limits that confront us right now.
9565 COMMISSIONER LANGFORD: You talked about sitting around your table and planning a strategy and coming up with numbers of $0.12 and $0.13 as ideal. Why not go for it? If that is what you needed, why would you sort of pick -- what is it about the atmosphere that led you to believe that $0.08 might play and $0.12 wouldn't?
9566 MR. BURMAN: Yes, just to pick up -- and Iain may have other things to add -- but just really to pick up on his point, I think that is a good question but we are incredibly conscious of the impact of any increase on our viewers and we felt that we should, before we even allow it out of the room, allow our thoughts out of the room, that we should look at some sort of a ceiling ourselves so that we can commit ourselves to finding ways, particularly because these new goals will create new programming and maybe over seven years, there are certain ways that we can deal with it.
9567 I think we felt, and I really think the tenor of your questioning this morning is a reflection -- I mean we are quite aware of that reality. I do come back because I always hesitate when we talk about figures of $23 million and $24 million and $39 million, and in reality, what we are talking about is we are talking -- what we are asking for is an $0.08 a month increase per subscriber.
9568 Somebody, the other day, pointed out to me that since 1992, the Globe and Mail has increased its costs by $0.10. There is a kind of reality here that I think is not too out of kilter with the real life. We are dealing with a network, for example, that I think is incredibly committed to its foreign coverage.
9569 I think that the costs and the effect of inflation, particularly on the exchange of the Canadian dollar, has had real damage on us that perhaps it hasn't had on other businesses. So there are particular aspects of inflation since 1992 that are...
9570 But our feeling was that let's put a limit ourselves before we even try to make the case, in this case, for $0.08. Essentially, what our limit was, well, we could make a case with our viewers and with our subscribers that: Let's make sure that their increase doesn't exceed the real value of the 1992 award.
9571 So essentially, what we are asking for is we are asking so that we go back to 1992. This is what we got in 1992: $0.55, but in 1999 and in the year 2000 terms. That was the thinking behind that approach.
9572 COMMISSIONER LANGFORD: The thing with the Globe and Mail is though you just buy the Globe and Mail, whereas when you get your cable package, you get the whole package. So the increases can snowball.
9573 MR. BURMAN: No, I agree. But you also -- the Globe and Mail at $0.60 is for one addition.
9574 COMMISSIONER LANGFORD: I just want you to know that the tenor of the questions this morning were based more on that than the value. We are not talking about how Big Mac's have gone up or Globe and Mail's or whatever but the sense that there is a bigger package here and a ripple effect possibly that we have to watch as well and this Commission is committed to try to keep basic cable rates as low as we can and make them affordable and people have come to depend on getting their television.
9575 Is this essentially to offset inflation because there are new things coming here as well? Am I to gather that in essence you just want to be returned to where you were in 1992 to offset the forces of inflation or is this an extended and broadened package of products that you are going to be delivering as well?
9576 MR. BURMAN: I think it is unquestionably a broadened package. Number one, I think that -- as I hope our video, in short form, capsulized, I think that Newsworld has made incredible advances in terms of its programming since 1992 and I think that what we are outlining in terms of our goals would be to make a real genuine breakthrough in terms of this issue, this notion of regional reflection.
9577 Anytime that the arguments about reflecting the regions of this country are put to us, we listen with incredible attentiveness because -- I mean most of the people around this table are from a whole variety of regions of Canada. People in Newsworld are incredibly conscious about it and we wrestle with different ways of doing it.
9578 But it is frustrating that when we are limited because of the technology -- we are limited to putting -- in such an incredibly diverse country as Canada, we are limited to our big cities, we are limited to our main universities. We have real limitations which is so that when people turn on the set, they don't kind of get the richness of this country.
9579 So I think what we are trying to come up, and I think we feel that we have, is a proposal that would kind of move us to another level, not a Mercedes-Benz to pick up on your earlier point, but let's get television, public service television in Canada outside the southern tier that we are in right now. So I think in that sense what we are proposing for $0.08 more is a Newsworld that is truly enriched on a lot of very important aspects to our viewers.
9580 COMMISSIONER LANGFORD: When you kick these numbers around, $0.12, $0.13, $0.08, did you kick any other numbers around? Christine, I can't see your last name. Is it Wilson? Did Christine Wilson's survey run anything else up the flagpole to see if anybody would salute?
9581 MR. BURMAN: No, no. As she indicated, we pursued $0.61 and $0.63. Those were the only two, again, I think, because we felt that, not to repeat your arguments, but there are limits.
9582 COMMISSIONER LANGFORD: But in an ideal world, you would like more?
9583 MR. BURMAN: No. I think we are very proud of the Newsworld that we are putting on air right now. We are very fearful that unless there is some sort of support and intervention that the Newsworld that we know right now will not be an attainable, an achievable Newsworld. But conversely, I think we are really confident that with this proposal and with the increase that we are requesting that we could make an incredibly significant breakthrough and advance in our service.
9584 COMMISSIONER LANGFORD: Just a couple more questions. I think I should just touch on the last goal so they have all been given a little play. Then I will hand it over to my fellow commissioners.
9585 The internship: CBC has always had training. You have always taken people from what used to be known as "Mac's Milk" on the bad days and moved them along up to "The National" and trained people. Why is this so new? It is a new technology or a new way of doing it, but why should this be part of an application as something brand new? Don't you have funds set aside for training? Isn't this just part of it all?
9586 MR. BURMAN: I will just say a couple of things and then I will invite my colleagues to comment.
9587 Just let me make two points that I think are somewhat timely: This is the CBC that has come out of budget cuts, has come out of savage budget cuts, and the result of that over a period of years has been that there has been a generation of young journalists, of young people, that because of seniority, because of a whole variety of reasons that we all understand and that are outside of everyone's control, that have been denied the kind of access to the media that we all feel they need to have, not only for their own benefit but also so that our viewers are enriched. That applies not only to the CBC but it applies to the private sector as well.
9588 So I think that a lot of our initiatives are very focused on: Let's try to capture the energy and the skills and the talent and the ingenuity of these people. I think it is really as we -- and I am just going back to your point about the incredible pressure that we seem to be placing on video journalists in particular places, and you are right, there is incredible pressure and I think it is really up to us to ensure that before they go out that they are properly trained. So I think it is in that sense that we saw that goal as being kind of a foundation so that the achievements of the other one are realistic.
9589 COMMISSIONER LANGFORD: It is only a fraction of a penny and I certainly don't want to beat it to death. I am all for training and retraining, but I wonder, in a sense, what it strikes me as, as I read these few pages on it, is that we are taking young people, people who are just getting into it and kind of making them -- their entry level is a national television. Is that realistic or should you be training them to go to local television and bringing them up from there?
9590 MR. BULGUTCH: Well, Newsworld has given the CBC an entry level on the national level because, dare I say, there is no secret. Some of our programming, some of our newscasts at 3 a.m., 4 a.m., you might say, aren't as important as some of our other newscasts like "The National". So suddenly, it's in a national newsroom where you can afford the first time with Newsworld to give people a chance before they are ready for prime time on the big network.
9591 So it gives us that, but the big goal with interns, as Tony says, because the CBC has come through this budget cut period, we have missed a generation. I have been with the CBC for 25 years. I started as an intern.
9592 So the history of what we have and what we have produced with interns -- Jason Moscovitz started with me in the Montreal newsroom as an intern. Tom Kennedy started as an intern. Susan Murray started as an intern. These are people who now -- leave me out of it -- contribute to this network in a proud way. But we had to stop that at a certain point. We just stopped.
9593 So who knows where the talented people who could have been contributing to public broadcasting and to Newsworld are either elsewhere or for all I know, they are driving cabs. I just don't know where they are but they are not at the CBC and it is time, we think, to get them back.
9594 COMMISSIONER LANGFORD: The answer isn't to bring back some of the people who have been laid off but to start with a new generation?
9595 MR. BULGUTCH: Well, union rules will force us to bring them back whether -- yes, we bring back the people we want to bring back and we have to bring back, but if we can suddenly bring in new blood, it isn't healthy for a newsroom to have nobody under the age of 42.
9596 MR. BURMAN: Can I just make sure that we are not confusing two things? It's that the National Internship Program is intended to be directed at young people. The video journalist would be an open competition and we clearly have an incredible -- not only Newsworld and CBC have an incredible commitment to bringing back, as you say, but we also have a very good track record in doing it.
9597 So there isn't an age in terms of a video journalist, in terms of the hiring of other reporting staff. There is not a bias in favour of young people, of only young people. What we are talking about in terms of young people would be the Internship Program.
9598 COMMISSIONER LANGFORD: Thank you very much. Those are my questions.
9599 THE CHAIRPERSON: I was ready to go for more because when you said, my last two questions, I thought you had many sub-questions. Thank you, Commissioner Langford.
9600 I think Vice-Chair Colville has a question. So has Commissioner Cram and Vice-Chair Wylie, and Commissioner Pennefather and I'm sure, the legal. So we are not quite over yet.
9601 COMMISSIONER COLVILLE: Thank you, Madam Chair. Actually, there are four areas I would just like to cover off, in no particular order.
9602 If we go back to the sheet that you circulated this morning, this financial sheet, I would just like to ask a couple of questions on that. Towards the bottom of the sheet, after the figure that shows: "excess cost after repayment to the CBC main service" -- I will just wait until you get it.
--- Short pause / Courte pause
9603 COMMISSIONER COLVILLE: The adjustment, employee termination benefits, vacation pay, and an acronym here TOIL, what is that? It shows as revenue.
9604 MR. McINTOSH: What I will do is I will maybe read out the accounting note which explains this. TOIL stands for time off in lieu of overtime.
"Employee termination benefits, vacation pay, and TOIL earned and accrued at year end for which settlements are likely to be made in future years as employees take the benefits, are adjusted as necessary in assessing whether funds paid to the CBC out of parliamentary appropriations are being used for the purpose of recovering incremental costs."
9605 (As read)
9606 Now, that accounting note has been there since we began in 1989. This was a policy developed between us and the Auditor General. The idea behind it is that the accrued liability for these types of things would be taken out of the annual results for the purposes of assessing whether or not we had a surplus carry-forward to meet the cost separation test.
9607 COMMISSIONER COLVILLE: I don't think I understand. These are for employees who have left?
9608 MR. McINTOSH: No, this is...
9609 COMMISSIONER COLVILLE: The first part of that says: "employee termination benefits".
9610 MR. McINTOSH: That's true. That would be a liability for termination benefits accrued if there were any. At that time, when the policy was developed, there was some long-term service payable which, I think, was captured by that. But the idea here was that the...
9611 COMMISSIONER COLVILLE: Long-term service payable to the employees who were leaving?
9612 MR. McINTOSH: No for having long service. There was a liability accrued with length of service after a certain length of time. That is not there any more. But the accounting note has not changed in that time.
9613 COMMISSIONER COLVILLE: So where does this money come from?
9614 MR. McINTOSH: Well, the money is actually a cost in the year. It is included in the expenses on the income statement you looked at and then it is taken out again. The reason it is taken out is because assessing whether or not the surplus carry forward is still there this part is not included.
9615 COMMISSIONER COLVILLE: Okay. Let's go back up to the one "Repayment to CBC Main Service Capital Expenditures". Can you explain how that works?
9616 MR. McINTOSH: Yes actually. If you look at the page opposite, page 16 --
9617 COMMISSIONER COLVILLE: I don't have the full sheet with me here. I just have the one you handed me this morning.
9618 MR. McINTOSH: All right. You will see that actually shows the capital expenditure history, and the two-two three-two is the repayment for that year to the CBC main service for capital acquired by Newsworld for its purposes.
9619 COMMISSIONER COLVILLE: How do you arrive at that figure though?
9620 MR. McINTOSH: That was the expenditure in the year for capital.
9621 COMMISSIONER COLVILLE: That's the CBC's expenditures during the year for capital for you?
9622 MR. McINTOSH: No, it is what Newsworld has paid to CBC for capital that Newsworld requires for its purposes. The actual ownership is CBC's.
9623 COMMISSIONER COLVILLE: Right. I thought I said more or less the same thing, but obviously not.
9624 MR. McINTOSH: I could read you the accounting note too on that.
9625 COMMISSIONER COLVILLE: So the CBC over time buys capital, purchases capital --
9626 MR. McINTOSH: Yes.
9627 COMMISSIONER COLVILLE: -- some of which you use?
9628 MR. McINTOSH: We have access to CBC capital that is not otherwise in use for their purposes, but there are items of capital which Newsworld alone needs, and that would be what is shown here. These would be specifically for Newsworld's purposes.
9629 COMMISSIONER COLVILLE: So bought on your behalf by the CBC?
9630 MR. McINTOSH: Yes, for which we pay.
9631 COMMISSIONER COLVILLE: And you repay.
9632 How is that calculated then? How is the repayment calculated? Do you pay interest on that?
9633 MR. McINTOSH: In fact, we paid the full cost of that capital in the year acquired.
9634 COMMISSIONER COLVILLE: How do you handle depreciation on this capital. Does that show up in your expenses?
9635 MR. McINTOSH: No, because the asset is owned by CBC, then CBC depreciates the asset. Newsworld has already paid the full cost of it, so we have absorbed the full charge.
9636 COMMISSIONER COLVILLE: So it is your --
9637 MR. McINTOSH: It's a CBC asset.
9638 COMMISSIONER COLVILLE: It's a CBC asset. CBC bought it on your behalf.
9639 MR. McINTOSH: Right.
9640 COMMISSIONER COLVILLE: You pay them for it.
9641 MR. McINTOSH: Yes.
9642 COMMISSIONER COLVILLE: And they get the credit for the depreciation.
9643 MR. McINTOSH: They depreciate it according to their policy over whatever the useful life is.
9644 COMMISSIONER COLVILLE: Interesting.
9645 MR. McINTOSH: Again, this is a policy which has been in place for 10 years.
9646 COMMISSIONER COLVILLE: Okay.
9647 Advertising. Do you and the CBC jointly sell ads? If, for example, I was General Motors Pontiac Division and I wanted to convince the public that indeed this Pontiac is every bit as good as the Mercedes that Mr. Langford was talking about this morning, and I wanted to buy an ad on both CBC and Newsworld, can I buy a joint ad?
9648 MR. TRASHER: It's not a joint ad. What we will do, in Toronto we have dedicated resources that are purely Newsworld marketing and sales people, and we work in unison in conjunction with the main channel reps as well. So that, for example, General Motors will put together a pitch for Newsworld, they will put together a sports and main channel pitch, and then, depending on the client and depending on -- it all depends on how a particular client is functioning.
9649 A GM, as a prime example, they will look at everything together, where a lot of other clients will want to look at the main channels first and after they have completed those buys then they want to then look at the specialty channels. So you play it depending on what the client's preference is.
9650 COMMISSIONER COLVILLE: So if I was a General Motors and I wanted to buy both, will you sell me a package where I could buy both for less than what the two would cost me separately?
9651 MR. TRASHER: Do we leverage each other? No. What you do is, there is a separate marketing and sales unit for the main channel that obviously decides on the value of their inventory and what they are prepared to do, and then as well Newsworld has its separate marketing and sales unit and we work on ours.
9652 Now, there are times, obviously, where you want to join them together because it gives you more flexibility.
9653 COMMISSIONER COLVILLE: If you join them together can I get a better buy?
9654 MR. TRASHER: I'm not trying to avoid that question. The point is, it depends what you are buying, because everybody associates different value with their products.
9655 COMMISSIONER COLVILLE: Well, if I am just buying what otherwise -- if I had a buy on CBC and a separate buy on Newsworld, now I want to buy the two together, same buys, can I get a better deal by buying the two of them together?
9656 MR. TRASHER: Not necessarily.
9657 A lot of stations, especially a lot of the private stations, because of the type of ratings and audience they have, they have predicated the history of how they deal is volume.
9658 If you take a look, some of the stations that still publish rate cards will say "I give a continuity volume discount of this. I give a dollar volume discount of that". We don't have the big audiences of that nature to be able to afford to do that kind of business. We have to be more selective about how we do our business because we can't get into the big volume shootouts.
9659 COMMISSIONER COLVILLE: Your first part of the answer was "not necessarily". Would I take it then that I could get a discount on the bulk buy?
9660 MR. TRASHER: On the Newsworld side, and again depending on -- well, okay, I'm sorry, because you do say it is continuity.
9661 I'm not trying to avoid it, it is just hard to say because I don't know what you are buying.
9662 If I look at my package and the main channel's package, usually if we are going to go in and present together on something we have already tried to make it as appealing as we possibly can. If you separate them from that point you sure won't be able to move it any further, no.
9663 COMMISSIONER COLVILLE: Are you telling me that if I went to CBC to buy a certain amount of ads for a given week, or however long, and got a price from CBC, and went to Newsworld and got a price from Newsworld, and then I said "I want to buy the two together", I couldn't get a better deal by saying "I will buy you both" than I could if I bought one or the other and took the two total?
9664 MR. TRASHER: If I have already done my package and basically put my margin to the extreme, I can't move any further.
9665 COMMISSIONER COLVILLE: It seems to me if I was General Motors, or one of these major national buyers, I would be expecting to get a better deal by agreeing to buy both Newsworld and CBC together.
9666 MR. TRASHER: You see, again I can't comment for the main network, but if I have already put the best package I can put forward, and I have already done that, there is really not a lot of flexibility left for me.
9667 COMMISSIONER COLVILLE: I'm sorry, when you say you can't comment for the main network then, you don't work together in selling?
9668 MR. TRASHER: No, I can't comment on their pricing structure because that is their pricing structure, that is their inventory. They price it, they market it, and at Newsworld we price and market ours. Obviously we try to work together wherever possibl because it has benefit and value, and you drive -- for example, if you are a large advertiser like that and you are presenting together you try to do that right at the front end to make the deal as most appealing as possible.
9669 COMMISSIONER COLVILLE: So you would make an appealing deal to me if I was going to buy both?
9670 MR. TRASHER: I would make a stronger case --
9671 COMMISSIONER COLVILLE: Let me go to my next question, and let's assume I have an appealing deal that is less than what it would normally cost me to buy Newsworld and perhaps less than it would normally cost me to buy just CBC.
9672 How do you figure out where you apportion the reduced rate?
9673 MR. TRASHER: We at CBC, main channel again, and Newsworld, a lot of broadcasters, as I said earlier, look at volume, look at things of this nature, and we all do.
9674 But the other thing is, we are very involved in revenue management, and so instead of just looking at the client and trying to decide the value of the client, we look at our inventory and decide on the value of our inventory. So we are more inventory-driven than you would be client-driven, because you want to make sure you maximize the value of the inventory, not the client.
9675 So do you follow where I am coming from there?
9676 COMMISSIONER COLVILLE: I am getting a sense of where we may be going. We could be a long time at this.
9677 Let's move off that.
9678 One other area, and this is a different area all together.
9679 I don't have a sense yet, when you talk about the changes that are happening in Calgary, Halifax, and soon to happen in Toronto, you talked about eight people in Calgary, 10 people in Halifax, and I guess as yet to be determined in Toronto. What is actually happening there?
9680 MR. BURMAN: I think what we are doing, again just to kind of repeat in 10 seconds the principles that drive it, which is, our feeling as we headed into this current season and as we prepared our submission to the CRTC that we would reinforce the news roots of Newsworld, we would increase our emphasis on news, on live, we would widen our regional reflection and try to kind of extend our journalistic presence across the country. So we shaped our current schedule, which is winding down its season next month.
9681 This spring as we looked at the state of our operation, which we do every spring, we came to the obvious conclusion that particularly given the priorities that we have outlined and we embrace, and given the pressures on our advertising revenue, and given the consequences of increased salary costs, that we have to identify -- before we move forward and we actually can deliver on our other initiatives, we have to identify whatever duplication exists in the system. So as we, in a sense, scanned over our system that is what we identified and that is what we dealt with.
9682 We did it methodically. We did it in Calgary, I made reference to the second crew; we did it in Halifax in terms of our kind of two-prong initiative which is let's consolidate, continue our consolidation of the news presentation of Newsworld, the newscast presentation of Newsworld in one location in Toronto, so that we can garner savings from that and that would enable us to create the new programs that we talked about. This coming season, for example, we will be originating from seven different Canadian cities rather than four.
9683 As we are now in the middle of examining Toronto, I think every situation is different. The Toronto situation is, we happen to have certain programs that are similar to other programs and we feel that by merging some of them, by reshaping others, by reassigning staff to various program units that we can also, in a sense, deliver the same quality of programming with reduced staff.
9684 So that is the -- one thing that is important to stress is that what is happening this year is not an unusual thing for Newsworld or any network in the sense of that is the kind of stocktaking that goes on every year, but we are doing it in the current context and we are doing it in the way that I have outlined.
9685 COMMISSIONER COLVILLE: When you talk about duplication then, in Calgary, Halifax and Toronto, are you talking about duplication across Newsworld or are you talking about duplication within those centres between Newsworld and the main service?
9686 MR. BURMAN: Within Newsworld. For example, to focus on -- I think I mentioned the Calgary example of the two crews.
9687 The situation in Halifax is different, is totally different because their operation is different and the programming is different. What we had in Halifax is we had our newscasts through our schedule were being presented, were being gathered, were being edited, were being written in two different centres, in Toronto and in Halifax. Our show would begin in Halifax through the morning and then in Toronto for the rest of the day. I think that that has resulted in literally duplication of facilities, of writing desks, of editing facilities, of news gathering, a whole series of both technical and editorial operations.
9688 I think that as we looked at our operation ahead we realized that we had, I guess, two issues in front of us: Is that the best way to use an incredibly valuable production centre in Halifax?
9689 I think we concluded no, that we should look at ways of consolidating our news presentation, as is the case in every major news network that we are aware of, in CNN in Atlanta, BBC in London. I think what they have learned -- as the new technology which is, in a sense, rolling through their operations far earlier than our operation, they are learning that by having your news presentation in one location you are able to merge desks, you are able to take advantage of new server technology, a whole series of savings.
9690 So, in other words, we are making significant savings, not only this year but I think over the next several years we will garner a sizeable savings by having our news presentation -- which is a narrow part of our operation but a very defined one, by having our news presentation consolidated in one centre. I think the savings that that then garners, which are significant, will enable us to expand and widen our regional presence.
9691 In terms of Halifax, that still will mean in the year ahead that Halifax will be an integral part of our morning program. It still will mean that Halifax will produce the range of programming that it is currently producing through the morning, but in terms of the actual news presentation that that has changed, and in terms of the immediate savings that is about a half a million dollars per year, which will grow.
9692 COMMISSIONER COLVILLE: So the news centre will be Toronto?
9693 MR. BURMAN: The newscast centre will be in Toronto.
9694 COMMISSIONER COLVILLE: I guess part of my concern -- and I don't want to move over onto the discussion of the main English network service, but I recall when Newsworld was first licensed and up and running and the Newsworld operation was coming to Halifax that the local people there made the argument that this was important to the operation in Halifax, not just because Newsworld was there as a bit of an add-on, but the whole addition of this whole facility meant adding to the base there, which is an important production base, the people, the facilities, everything, that allowed the CBC operation in Halifax to be a critical element of the production environment there.
9695 It isn't clear to me from what is happening here that that isn't being jeopardize, because I think the CBC plays an important critical role, almost what you could characterize as a bit of an incubator role, if you will, throughout this country and the fact that Newsworld is able to be in Halifax and be in Calgary as well as in Toronto, and whatever other centres one is able to go to, that is hugely important to the CBC's operations in those centres in again giving it sort of a critical base, if you will, to build upon for other elements of the production community that exist in those areas.
9696 So whether it is the news or other elements of that production and I am worried that if you start moving eight people out of Calgary and ten people out of Halifax that you start ripping apart at the very core. We have talked with Mr. Beatty about the roots in the regions and there is an ad on TV these days about Rice Krispies and you see this peasant pulling rice out of the swamp and I just have a vision of these roots being yanked out.
9697 MR. BURMAN: There is virtually nothing that you have said that I challenge except that I think that your characterization of it is not totally accurate and I can understand why that is so. But, for example, and Calgary is an example, we are not moving any people from Calgary to Toronto. Essentially what we are doing there is we are eliminating one crew. That is a specific action that focuses very much on that crew. In terms of Halifax, yes, there are seven people being transferred to Toronto but that is the limit of the transfer to Toronto and I think that to me, or to us, the ultimate test is what are we seeing on screen, what is being done behind the scenes in terms of the production unit and the Halifax production unit, which we invested some money in this current season and I think many people would argue has never looked better in terms of its studio, in terms of its facilities and they work very much in tandem with the CBC main operation in Halifax. That will continue.
9698 So in a group of 50 people -- 45 to 50 people -- yes, there is a desk of seven people that is being relocated and we are doing that again to achieve what we regard as significant savings, half a million dollars that will grow and that will be the kind of savings that will allow us to actually widen our regional reflection.
9699 So I think just to repeat what I said earlier this morning, is that I said if we can somehow fast forward ourselves to a year from now, I think you would see not only that the Halifax production centre would be as vibrant as important, not only to Newsworld and to its viewers, but also the CBC main channel in Halifax and I would say the same about Calgary but you would also see several other centres in a whole variety of ways whether it is VJs or whether it is mini-bureaus.
9700 But many other centres in Canada represented on Newsworld and the only way we can achieve the latter is by being fairly pragmatic about the former and our feeling was that we could retain the integrity and the value of the Halifax Centre by making this one defined change to the extent that you feel -- and the people in Halifax that I talked to about this feel the same way -- that is this the thin edge of the wedge, is this going to lead to something else? I guess my answer is no, because we are as concerned about that potential as anyone and I can only kind of say that and promise that and it is something that I and we kind of promise time and time again in any conversations we have with our Halifax colleagues or our Calgary colleagues because Newsworld is a regionally routed network and, as far as I am concerned, assuming that our budget situation allows it and that is a worry. As I have indicated, as far as I am concerned that will remain so in the foreseeable future.
9701 COMMISSIONER COLVILLE: Okay. Let me switch to the last issue I want to cover then and I guess it picks up on a point that was raised with Commissioner Langford earlier and I was intrigued by the emphasis this morning -- I think it was Mr. Culbert who mentioned on a couple of occasions that this is an integrated operation and if I pick up on looking at a letter here dated March 15th in response to questions from the Commission that we, I guess, issued on March the 5th and this is regarding this very issue of the integration. On page 2 of the response, paragraph 4, the last sentence talks about and I will quote:
"Some changes involving Newsworld integration might require consultation with the CRTC with the arm's length separation of the costing of the two networks."
9702 You went on to say in the next paragraph:
"With those cautions in mind, possibilities of integration between the network and the regions would include one, restructured reporting lines in Newsworld, the regional news operations and the network; two, further integration of network reporters, producers, camera operators and editors in the regional news operations; three, increased integration and utilization of regional reporters and national newscast; four, increased exchange of programs organized nationally and showing relevant interregional series and coordinated pan-Canadian coverage of particular issues; and five, a national booking desk to operate the manner described above."
9703 I guess I am trying to get a sense of what your view is here about the whole question of this integration between Newsworld and the CBC and what you are thinking of here in terms of this consultation with the Commission in regards to this arm's length separation.
9704 MR. REDEKOPP: Let me start, Commissioner Colville, by saying integration is very much something that we want to achieve. We want to build on the whole idea of synergies and I think that the four areas that are outlined, or the five areas that are outlined Bob Culbert can speak to, but we have been very, very careful always to abide by observed cost separation rules. So I am looking at this document myself and I am not quite sure what the nature of the consultation would be except that we would, in fact, abide by those cost separation rules.
9705 But perhaps I could just ask Bob to speak about those areas because those are precisely the areas that we want in fact seek greater cooperation and collaboration between the two services.
9706 COMMISSIONER COLVILLE: Before you do that, Mr. Redekopp, maybe you could just go on to -- because I guess you are talking about the rules that are in place and I guess what is at the root of my question is what do you think about this whole principle that is in place in terms of that separation and the rules. I assume here that what is implied is perhaps some change of those rules and I guess I am curious to know what your view is on the rules themselves, given the stress that you placed this morning and through the rest of today on this whole notion of integration?
9707 MR. REDEKOPP: First of all, let me say that I think we understand and support the rules for cost separation because it is based on an assumption that the public ought not to be subsidizing a specialty channel and that is the basis on which we applied for the licence and it is on the basis in which Newsworld.
9708 Having said that, our application also said, back in '89, that we would want to work very much at the margins of the main channel and as the margins have shrunk -- and you have heard about that today -- the whole idea of working more closely together, driving greater synergies, is something that we want to exploit but we understand perfectly that the main channel, which derives the bulk of its funding from the government appropriation, ought not to be used as a subsidy for the specialty channels.
9709 So we understand that, we abide by that. Having said that, we are going to look to exploit the synergies.
9710 MR. CULBERT: Yes, simply a lot of it is outlined here that we learned during the cuts innovative ways to work together. There is a separate operation for Newsworld, there is cost separation. What we find, in many ways, we are a better news service if we find ways to work together and this wold just be the extension of progress we have made in the past four or five years. We really have an integrated news gathering operation. When reporters are assigned, they are assigned for sort of getting material for both networks. We want to see if we can push that further into better use of regional reporters into network shows, better use of national reporters into regional shows, better use of shared resource between the networks and it is sort of an ongoing thing but we have to work within the rules of the cost separation and I think that is why it says that we can only go so far and then we will run into this rule that we may have to look at some point.
9711 As journalists in the news service we will push it as far as we can because we are all stronger for it if we can tap into sort of the resources, the synergies of network, Newsworld and our regional operations. We have proven that during the cuts and I think it makes us a stronger news service.
9712 MR. REDEKOPP: I have asked Bob and his people, in fact, to look at synergies that will be exploited at the regional level precisely because of the reductions that we have to make at the regional level to try to build back jointly resources so that we can, in fact, relate back to the communities and reflect those communities, and that is really what I am talking about, an integration -- integration in terms of working very closely together. Now you have heard Bob talk about the assignment desk they have. The question is how much further can we go while observing the cost separation rules?
9713 COMMISSIONER COLVILLE: I guess it begs a question in my own mind that if this becomes so integrated, why do we try to keep it separate? Why do you think it is important that we keep it secret?
9714 MR. REDEKOPP: Well, again, I will go back to the assumption that we have made, that is that public funds ought not to be used to subsidize a specialty channel and we have made the agreement on that basis and we want to live by that agreement. So we will work closely together while observing those rules.
9715 COMMISSIONER COLVILLE: And you believe the opposite should be true as well?
9716 MR. BURMAN: I was just going to add that. If I can add that in a sense from Newsworld's point of view, is that the cost abrasion from Newsworld point of view relates very much from the integrity of the subscriber fee to Newsworld and one of the reasons why we have all been as open as we are to looking to sensible ways of conducting ourselves in a collaborative sense, that we have been incredibly tenacious about protecting, about ensuring cost separation because I think it is our belief that when the viewer pays Newsworld 55 cents a month that he or she has got to be fully confident that that money is going to the quality of the programming that that viewer gets on Newsworld.
9717 So it has a double importance and it may not be as easy to understand from the outside but I think that we have learned from working together that every on incredibly collaborated projects where we are together, that we do know where to draw the line and we do know where to apportion the various costs and the various expenses. And I think that we have, over time, developed a facility in being able to work together but do it in a way that is financially separate.
9718 MR. REDEKOPP: I might add that our viewers aren't always understanding about this cost separation. I think when they see the CBC logo they expect the same level of service and thoughtfulness from both services. And so the kinds of expectations, obligations that exist for the main channel, I think they also exist for the sister channel. We see Newsworld very much as part of our core service. We understand the core separation, we understand that we are not to be cross-subsidizing either way, that in fact public funds are not to be used for that purpose.
9719 But having said that -- I mean my colleagues here today have been stressing the fact that they operate under business principles and indeed they do -- they also exist for public service reasons and we are obviously trying to meet those, we are trying to meet the terms of the mandate, we are trying to meet the spirit of what a public broadcaster ought to do and it really means that when resources contract we have to exploit those synergies.
9720 Having said that, we do understand -- and I think we have gone to some length today to explain to you that we abide by those separation rules.
9721 COMMISSIONER COLVILLE: I wasn't implying by my questions that you weren't. I mean, I guess it complicates the whole accounting process because on the one hand it is very much an integrated operation as you already have said today. You want it to become an even more integrated operation and so it seems to me I am not even sure whether the public -- and maybe your survey showed that -- really does understand the distinction as you just pointed out about the logo appearing. I don't know whether they would understand that their tax dollars aren't paying for Newsworld or that their Newsworld aren't somehow helping to pay for the main service. I don't know whether they would understand that or not. But it seems to me it just complicates the whole accounting exercise in trying to make sure that the separation is there.
9722 Anyway, those are all the questions I have.
9723 THE CHAIRPERSON: Thank you. Vice Chair Wylie?
9724 COMMISSIONER WYLIE: Thank you, Madam Chairman.
9725 Before us we now have two applications for rate increases. One for RDI and one for Newsworld and, as you have stressed today and as is apparent from the application you have filed, many of the projects actually overlap. I don't have the Newsworld application before me but I understand that there has been a breakdown of what amount of the 8 cents would be attributed to each of the projects and perhaps it is because you have had experience before of what the Commission has required of you to justify a rate increase and I mean a breakdown where it wouldn't just be a breakdown of the 8 cents but a breakdown inside each portion of the 8 cents. What are the costs in each projects? You know what will be the cost of achieving these projects for which you want a rate increase?
9726 In the RDI application, I haven't seen anywhere such a breakdown of similar projects. That is to just say we will -- trucks are easy to identify but in each project, for example, where you plan to do more regional programming, more direct, what is the portion to labour or to staff as opposed to cost et cetera and even less do we have, as between RDI and Newsworld, what happens between the two? How do you justify the increase on one side and, on the other since they there for the same projects, for example the documentaries "Culture-choc" or "Culture Shock" and it is easy to see that even though the 10 cent increase is larger the amount generated by it will be smaller.
9727 But nevertheless we have to have a better understanding of which goes to which and what happens if a partial rate increase is given to one or the other? In other words, if you don't get a rate increase on the one side to do "Culture shock" and suppose RDI gets its 10 cents, what happens to that project.
9728 I don't know if you have done this type of breakdown, because it seems to be even more apparent today after hearing Newsworld than it was after hearing RDI that they are very much connected. They are not necessarily called the same thing. For example, in French, we have, "mieux refléter les régions en direct sur le terrain", but then we have "to expand our capacity to report news when it happens from all parts of the country in partnership with RDI." So there is obviously an overlap.
9729 Perhaps by the end of this exercise we can expect from you some better breakdown, especially on the RDI side. My understanding is that there is -- I don't know if there is this time but there was the last time when you applied for a rate increase for Newsworld a very finite or detailed breakdown that the staff required to see whether the projects that you want the rate increase for are projects that the Commission finds acceptable. It is further complicated now because we have two news services before us for rate increases at the same time.
9730 So you will have some time to think about how -- do you know what I'm driving at?
9731 MR. BURMAN: Yes.
9732 COMMISSIONER WYLIE: And then perhaps what happens to projects if the Commission doesn't allow the full rate increase.
9733 On the RDI side, I believe by next week we will have more questions as to justifying more finitely how this money would be spent, because although I understand there is some talk of reading the financial forecast, not too simplistically, but that there will be budget compressions and removal of some items, et cetera, we still have rate increases to justify.
9734 So perhaps you can think about it and by next week we will have some more details about what more we require to justify the rate increase on each and then what the overlap means.
9735 MR. BURMAN: Yes. I don't know if Iain wants to add anything, but we will obviously provide anything that you --
9736 COMMISSIONER WYLIE: You can't point me at this time to anything in either application that would address that?
9737 MR. BURMAN: Just to talk about a couple of things. You used the word "overlap". In reality, I don't think we view it as overlap in the sense that it is --
9738 COMMISSIONER WYLIE: Well, in the sense that RDI tells us that they will do -- I hope I have the numbers right; it has been a few days -- if we give them the rate increase they will do six additional documentaries.
9739 MR. BURMAN: Yes.
9740 COMMISSIONER WYLIE: And they will acquire the rights and adapt six more documentaries that presumably will be produced by you, right?
9741 MR. BURMAN: Right.
9742 COMMISSIONER WYLIE: But the overlap would be, and then I go to your goal number four: To increase the number of independently produced documentaries in partnership with Canada's independent community and RDI.
9743 MR. BURMAN: Yes.
9744 COMMISSIONER WYLIE: At least in the sentences there is an overlap, you would agree?
9745 MR. BURMAN: Yes. I'm sorry. I didn't mean to challenge your word.
9746 We worked some of these out after some discussion in the sense that the goal there -- for example, in terms of independent documentaries, I think our hope there was that as each service enriched the independent documentary community a certain percentage of those documentaries would be broadcast on both channels, you know, in translation.
9747 But I mean to the extent --
9748 COMMISSIONER WYLIE: Yes. But I would call that an overlap because if the rate increase on the Newsworld side is necessary to produce them and you don't get the rate increase you won't have them for RDI to purchase with the increase on their side.
9749 MR. BURMAN: Yes.
9750 COMMISSIONER WYLIE: So I don't what better word than "overlap".
9751 MR. BURMAN: No. I accept the word.
9752 COMMISSIONER WYLIE: Yes.
--- Laughter / Rires
9753 MR. BURMAN: I'm sold.
9754 COMMISSIONER WYLIE: So you can't point me anywhere in either application where you have connected the two except in these sentences --
9755 MR. BURMAN: Well, it's just that, for example --
9756 COMMISSIONER WYLIE: -- financially, what breakdowns and so on?
9757 MR. BURMAN: Yes. Well, let me invite Iain.
9758 MR. McINTOSH: No. I think we should clarify that for you.
9759 MR. BURMAN: Yes.
9760 COMMISSIONER WYLIE: Because there are exact sums attributed in each case. I cannot speak to whether there have been breakdowns in Newsworld in this application. I know there was in your last rate increase application and I know that there isn't on the RDI side.
9761 When I look at "documentary" with a sum of -- I hope I have this right -- $10.6 million, what does it consist of, et cetera?
9762 Because rate increases of 10 cents in RDI and 8 cents in Newsworld are substantial increases and the Commission will require, as it has in the past in Newsworld, a better and more finite financial justification for them, and we may have some more specific requests to make of you on the RDI side as well that we are still not clear on whether it is sufficiently justified, and today raises the question even more, then, with RDI that almost all these goals involve both services.
9763 Thank you.
9764 THE CHAIRPERSON: Commissioner Cram.
9765 COMMISSIONER CRAM: Thank you.
9766 I confess I watch Newsworld and have since the beginning.
9767 One of the things that disturbed me the most was when the regional news, that whole program of the half hour news, went off. I'm assuming that is in relation to the excess capacity issue that you were referring to and the death of excess capacity on the main network. Is that the reason for its death in terms of the Newsworld programming?
9768 MR. CULBERT: I'm sorry? Which programming are you talking about?
9769 COMMISSIONER CRAM: The regional programming where there used to be the regional news, a half hour for Manitoba, a half hour for Saskatchewan.
9770 MR. BURMAN: No, no. You are talking about the rebroadcast of the supper hour programming?
9771 COMMISSIONER CRAM: Yes. I don't know whether they were rebroads or repackaged. I don't know.
9772 MR. BURMAN: Yes. I think there were a variety of considerations. Some of it certainly did relate to the impact of the cuts and impact of the margins.
9773 I think part of it, there were decisions made at different times that related to a feeling that, as important as this material was, there are other ways of packaging it and programming it in a way that would appeal to a wider audience. In other words, and again I wasn't in the eye of that hurricane, but my recollection really, from the perspective of "The National", is that there was some frustration that simply a rebroadcast of a regional supper hour would appeal to a limited number of people whereas by putting many of the regional items in a wider perspective would reach a wider audience, you know.
9774 So I think it is those kinds of -- I think what we have done, for example, this past season is we introduced a program that right now is probably one of our highest rated daytime programs called "Absolutely Canadian" which is a program with Ann Petrie out of Calgary that is essentially a rebroadcast of the highlights of last night's regional supper hour programs.
9775 COMMISSIONER CRAM: So is this, the SNGs and the VJs, one of your ways of bringing alternative regional programming in? Is that the concept?
9776 MR. BURMAN: Exactly. Exactly, because I think we are frustrated that as we embark on more and more initiatives along that line we are trapped in CBC studios. We need to get out of CBC studios. We need to get out of the southern tier of cities that we talked about.
9777 I think it is our feeling -- and we were incredibly encouraged by the real success of the Calgary program. That was an encouragement to us to kind of build on it. Really it is our hope that with both the video journalists and with better satellite facilities we can kind of get to that.
9778 COMMISSIONER CRAM: What I don't get is the relationship between the SNGs and the VJs and the local regional stations.
9779 MR. BURMAN: Right.
9780 COMMISSIONER CRAM: I take it, if I have it right, because of this national assignment person in Toronto that the VJs would not be going places where the local people would be going because I --
9781 MR. BURMAN: Yes, that's ours.
9782 COMMISSIONER CRAM: -- have visions once again of four CBC crews at a place and one VJ from --
9783 MR. BURMAN: No. You are right on that assumption.
9784 COMMISSIONER CRAM: So it would be a different nature of news that they would be covering --
9785 MR. BURMAN: Exactly.
9786 COMMISSIONER CRAM: -- along with the SNG, while doing your double-enders, would be doing a different nature of programming.
9787 MR. BURMAN: Exactly.
9788 COMMISSIONER CRAM: That is what I can't get a handle on. If it isn't Taber and horrible things, and it isn't the news that would be covered by the provincial or regional people in their news, what is it? I have a problem understanding the nature of the programming that you would be using or getting these people to develop for you.
9789 MS SMITH: Are you talking about the VJs or the trucks particularly?
9790 COMMISSIONER CRAM: Both.
9791 MS SMITH: My example, I guess, about the Okanagan stands, those kinds of stories that the local newsroom, which is based out of Vancouver, is not going to be able to get to.
9792 One other example that might come to mind, for example, the recent Supreme Court decision on MNH. When we want to talk to people about the impact of those kinds of decisions we essentially looked for people in Toronto because those are the people we can get to in a studio. We knew that decision was coming down and we knew that we were going to be seeking that kind of reaction.
9793 It means that it broadens the diversity of voices that we are going to be able to put on the air, whether that is covering the stories that we would cover anyway or whether it is covering stories that we know are out there that we can't get to, whether it is flooding in the Okanagan Valley or droughts on the Prairies or fishing stories in the Maritimes.
9794 Frederick Street, for example, is probably a good example. The only kind of coverage we were able to get out of Frederick Street was carried back by videotape and that was a packaged two-minute news item. We weren't able to go to Frederick Street and actually do the kind of expanded coverage that on Newsworld we would like to be able to do, to be able to actually talk to the residents for more than a 30-second clip, to be able to talk to the Nova Scotia Minister for more than a 30-second clip that you would see in a news item. We didn't have that capability to be able to get there and do that.
9795 So a video journalist, for example, could have gone into Frederick Street and put together over the course of a couple of days either a longer piece -- and the availability of a truck would also allow us to do that kind of more in depth, analytical kind of reporting that we think distinguishes us on the dial.
9796 COMMISSIONER CRAM: I guess I'm curious because there has been this talk about integration with the main channel and it appears, and tell me please if I'm wrong, you are going off on your own with your own reporters and your own equipment. What about the main channel and what about the reporters they have there and what about co-operation? Are you going to lend your SNG to them or are you going to give them the material your VJ has? What is going to happen?
9797 MR. CULBERT: While respecting all the rules we talked about a few minutes ago, yes, the very regional programs are thwarted sometimes -- I have worked in some -- at not being able to serve remote areas or smaller communities than ever the network shows. The very presence of more trucks, the very presence of the video journalist will give those programs the ability to do a better job.
9798 I think someone said this morning there would be new ears and eyes in some communities. We will hear about stories before we do at present. With the trucks we can get to them. We can share of course. When we talk about all this sharing that goes on, in effect it is sharing in the classical sense. If a truck is there, different clients can use it for their needs on a priority basis including the supper hour programs.
9799 I know if this all starts to happen the regional programs will be one of the beneficiaries from it.
9800 MR. BULGUTCH: Yes. The sharing already exists.
9801 Swiss Air, we certainly did what we had to do from Peggy's Cover, but at six o'clock Atlantic time the Halifax local supper hour program came out of our truck, if you will.
9802 During the Manitoba floods, we put a truck in and we did what we had to do. At six o'clock local time we turned it over to the Manitoba supper hour program.
9803 When we go to Texas to watch to see if Stan Faulder will be executed, we took an Edmonton regional reporter, a Newsworld truck, a Newsworld producer and bingo everybody gets service by sharing.
9804 So all this does is expands what already goes on. But the regional programs have been so severely cut that they don't get to these places where we are proposing to put VJs into. I mean, the Toronto local program, I don't watch it religiously, but I can't imagine they get to Peterborough that often.
9805 Again, we have been talking about small towns as if we are suddenly going to be in every hamlet and village. We won't. There are major centres where we don't appear very often.
9806 MS MIRONOWICZ: It will also mean that town halls, which when you see them now -- I find them quite interesting and our audiences do -- won't originate always out of Toronto and Ottawa. We will have the town hall coming from somewhere out west, somewhere out east so that it isn't just central Canada voices that get to "so-called" speak for Canadians on whatever issue we are looking at.
9807 COMMISSIONER CRAM: Thank you. Those are all my questions.
9808 THE CHAIRPERSON: Thank you.
9809 Commissioner Pennefather.
9810 COMMISSIONER PENNEFATHER: Thank you.
9811 Good afternoon.
9812 I had two questions. I now have one.
9813 Commissioner Wylie asked my question regarding particularly the documentaries, to make very clear that in fact we are ending up with 10 original documentaries in your proposal. The way it reads, it would appear that there is investment by RDI in those documentaries in addition to what they are doing, so it will help us clarify that.
9814 On this section of the new goals, you also have what is called a new daily series of public affairs programming. I think it is $400,000 in Years 2 and 3 and then up to $1.4 million pursuant to that. What kind of programming is that?
9815 MR. BURMAN: Well, I guess in terms of kind the best example I probably could cite would be a program, "Counterspin" with Abby Lewis, which is a nightly topical debate program that we have on at 8:30 eastern and is produced by an independent producer. What it does, it provides a very topical current affairs response and debate on an issue that usually emerged that day if not that afternoon. I think it has really been a real success with our audience and with our schedule for a whole variety of reasons, including because it comes from outside producers and has an outside perspective.
9816 So I think our desire, our commitment, is to build on that and to have a similar -- not an identical program, whether we go into the direction of law or whether we go into health. I mean, there are a lot of other areas that we can explore. What we would do is we would canvass various programmers, but I guess the key thing is we would want to produce out of Toronto.
9817 So I guess the two key things obviously would be: (a) an independent producer, and (b) it would definitely be produced out of Toronto.
9818 Our hope would be, not unlike the Vancouver program that we have talked about and that we are introducing next January, it would bring a whole kind of range of new voices and new faces to our programming.
9819 COMMISSIONER PENNEFATHER: Two things. I think it would be important to make the distinction between that kind of programming and documentary.
9820 MR. BURMAN: Right.
9821 COMMISSIONER PENNEFATHER: And, secondly, if you could note that in fact regional reflection will be a component of that amount of money?
9822 MR. BURMAN: Right.
9823 COMMISSIONER PENNEFATHER: My second question you may want to get back to me on as well. It concerns all the five goals inclusive of the first goal, not the trucks but the staff you have listed in the breakdown of 3.1.
9824 MR. BURMAN: Right.
9825 COMMISSIONER PENNEFATHER: In terms of specifically how you intend to address, in each of those goals a reflection of a multicultural nature of our society, the specific plans you have in all of those goals, particularly in the training area as well, how you intend to address that.
9826 I noticed in your video and the opening part of your application you reference your work in that area and I noticed the choices of images in the video, but I don't see in the description of the goals any specifics, and I mean this over and above the employment equity plan which I reviewed.
9827 MR. BURMAN: Right.
9828 COMMISSIONER PENNEFATHER: If you could get back to me on that I would appreciate it.
9829 MR. BURMAN: Yes. With pleasure.
9830 COMMISSIONER PENNEFATHER: Thank you.
9831 THE CHAIRPERSON: Thank you.
9832 Legal counsel.
9833 MS PINSKY: Thank you.
9834 I just have a few questions.
9835 First, I would like to just clarify the scope of Newsworld's commitment with respect to regional reflection and production both with and without the fee increase.
9836 I noted we have heard how the retail programs there will be an extension of service, et cetera, with the fee increases, but then we have also heard how the proportion of regional to total programming will remain the same.
9837 First, I just wanted to confirm that and to clarify my understanding that with fee increases the proportion would not change, it would be the quality of the programs themselves or the diversity of regional reflection?
9838 I'm sorry, could you just put your microphone on?
9839 MR. BURMAN: Yes. With a fee increase we would commit to maintain and ideally increase the proportion of regional programming on Newsworld produced out of Toronto.
9840 MS PINSKY: Okay. So it won't be just a question of the diversity of the regional programming itself, but you would increase the proportion?
9841 MR. BURMAN: We would maintain the current ratio, but I think realistically we believe that we would increase. But the commitment would be to maintain.
9842 MS PINSKY: Without the fee increase would you intend to maintain the current level of --
9843 MR. BURMAN: No. I mean, to be perfectly honest and really to, I guess, paraphrase my earlier comment on this, is that if we enter the next licence period without a fee increase with the prospect of -- or the certainty of having to take up to $24 million out of programming over the next seven years, then we will have to sit in a small room for a long time and make hard decisions about a whole variety of things.
9844 I think really it is premature for us to even speculate as to how we would deal with that, because again, as I said earlier, there are certain basic components of our programming that people identify with and that we all know about, and one includes the existence of two important production centres in Calgary and Halifax, another relates to the significant contribution that we make to independent documentaries and our whole kind of range of programming, and I think that it would be unrealistic for us not to think that all of the above would be affected. But until we actually go through that process we don't know.
9845 So I think it would be impossible for us to commit to anything as related to regional -- certainly it goes without saying that our starting point, because of the nature of the network and our kind of the history of our concern and preoccupation about this, our hope would be that we would maintain as much as we could.
9846 But I think, again to pick up on the answer to the first question this morning, at the end of the day we are a business and this would be a business that would have to take $24 million out of its programming budget over seven years, and that is something that we would have to deal with.
9847 MS PINSKY: Some more specific questions within the same vein.
9848 You mentioned this morning how Newsworld has been able to conclude some private arrangements for four SNG vehicles, and if the fee increase were granted would it be Newsworld's intention to maintain those arrangements in addition to the additional -- the three new SNG vehicles?
9849 MR. BURMAN: My assumption is yes.
9850 MR. McQUAKER: That is an arrangement with a private SNG supplier and we would like to continue it because it would give us more SNGs than just the ones we have asked for in the application.
9851 MS PINSKY: Thank you.
9852 Now I would just like to turn to actually a question that was put to Newsworld in the deficiency process in the letter -- I guess it's dated the 15th of May. The question was put to Newsworld whether it would commit to a condition of licence with respect to the CAB Code of Violence. I will just get the specific.
--- Short pause / Courte pause
9853 MS PINSKY: The conditional licence would say:
"The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's voluntary code regarding violence in television programming as amended from time to time and approved by the Commission." (As read)
9854 Newsworld's reply was:
"The issue of violence is addressed by the Corporation's journalistic policy." (As read)
9855 I would like to first clarify precisely what those standards would be. If I look at your CBC Journalistic Standards and Practices, are you referring specifically to -- I guess it's in Part 4, section (b), 4.4, there is a paragraph relating to the treatment of violence. Is that specifically what --
9856 MR. BURMAN: Will it simplify things if I just answer yes to that question, to the earlier question?
9857 MS PINSKY: Yes.
9858 MR. BURMAN: Okay.
9859 That was our intent.
9860 MS PINSKY: Just to clarify with respect to the undertaking you have taken to set out the implications with/without a fee increase for RDI and Newsworld, when would you be in a position to file that information?
9861 MR. BURMAN: Would next Tuesday be suitable?
9862 MR. CULBERT: Is that the 8th?
9863 MS PINSKY: Just so we will be in a position to review it, would you be able to file it Monday afternoon and then we will have the evening?
9864 MR. BURMAN: Of course.
9865 MS PINSKY: Finally, you referred earlier to the survey conducted to evaluate the public's perception of Newsworld. I believe we have -- I'm not sure what that was and whether that is on the public record. We have one with respect to RDI. Is there a separate survey that was conducted specifically for Newsworld?
9866 MS WILSON: Yes.
9867 MS PINSKY: Would you be able to file that for the public record?
9868 MS WILSON: Of course.
9869 MS PINSKY: Thank you.
9870 Those are all my questions.
9871 THE CHAIRPERSON: Thank you.
9872 Commissioner Pennefather had an additional question.
9873 COMMISSIONER PENNEFATHER: It is not an additional question, just a clarification.
9874 I asked you about diversity in programming regarding the new goals. I would also obviously like to know if you do not have the increase how you intend to address the issues of diversity within the programming of Newsworld in the next licence period.
9875 Thank you.
9876 Thank you, Madam Chair.
9877 THE CHAIRPERSON: I had a question myself.
9878 You talk about "Culture Shock", and I have seen it on -- I don't know if it was RDI or Newsworld, and the RDI and even the French network has talked a lot about the collaboration between the two and meetings that are held and projects that are conducted.
9879 I was wondering, is that the first attempt to a common program, you know, kind of conceived together and pursued together?
9880 MR. BURMAN: In terms of Newsworld it is.
9881 The history of collaborations between CBC and Radio-Canada is actually a far better one than I think is often made public, and I speak as somebody who used to work for many years at "The National" and worked very closely with "Téléjournal" and with "Le Point", et cetera. But generally that was in terms of news and current affairs. That was in the pursuit of news.
9882 I think on Newsworld there have been many -- I think there is a number, we have it in our brief -- I think maybe 18 or 20 documentaries that have run on both RDI and on Newsworld. But in terms of "Culture Shock", this was the first time that we have, as two networks, created a program, and it is something that we hope to build on.
9883 THE CHAIRPERSON: Though I heard correctly that if ever you were not granted the increase, that would be one project you wouldn't pursue?
9884 MR. BURMAN: Well, it would be one project that we would hope to continue as much as we could. I don't think our commitment probably, in terms of the coming season, would exceed 13 weeks and then we would have to make an assessment.
9885 I think that our feeling after the experience of the first run of programs was that not only was there value in that series in itself, but that as a process of collaboration and a building on it that it was something that really was quite unique.
9886 Clearly, without an increase then it becomes a stand-alone series and our assessment as to whether or not we can continue it would be made, and it is one clearly that is very close to our hearts. But the decision as to whether or not we continue it would be made in the context of our other decisions, because there are many other aspects of programming that are also important to us.
9887 THE CHAIRPERSON: Close to your heart, but not as close as other projects?
9888 MR. BURMAN: No, I'm not saying that. I'm just saying that we haven't begun the process of making the choices.
9889 THE CHAIRPERSON: What I hear, though, is you are kind of putting in the balance the increase as one of the elements you would put in the balance. Am I hearing right?
9890 MR. BURMAN: Yes. In terms of that specific program because that is the practical reality.
9891 I should come back to my earlier point, which is that we collaborate with RDI four or five times a day. So we are very close with -- we work with each other in an incredibly close way on all sorts of projects and that will continue.
9892 I think what was quite unique about this -- and Maria Mironowicz was our representative on it -- was quite unique that this was a special project that not only involved collaboration between Newsworld and RDI, the programmers, but also involved the hiring of the unit and the building and the training of the unit, many of whom were totally new to television that needed a lot of training, and that requires far more time and care and, dare I say, money to finance than some of our other projects.
9893 So I think that -- and I can't over state how important that is to us in the sense that we are quite struck by how incredibly successful that has been.
9894 So I don't mean to kind of suggest that it is down on our list of priorities, it is just that we have to be kind of very pragmatic at the end of the day and look at what projects we have and what projects we can keep.
9895 THE CHAIRPERSON: I just want to make that comment. I understand that we may be ignorant of all the collaboration that is going on between the two networks, and RDI and Newsworld and the networks themselves, and it is true that it might be many times a day, but it is not always apparent to the viewer, the Canadian public who are supporting public broadcasting.
9896 That is one example, and it is the first in 10 years that you exist. Certainly there is some merit for the viewer at the end of the day to say there is synergy, even if there is separate accounting at the end of the day even further between English and French networks it gives that impression.
9897 It seems that I am questioning the fact that you are putting an increase -- the importance of it -- and I'm not denying it and we will certainly go through more discussion around that element over the hearing and eventually after that with the interventions and the analysis -- but I find strange that the public broadcaster that has that ramification everywhere in the country in the two cultures of the country having that first experience of a program conceived together and kind of put in the balance that that would be the project, or one of the projects, that might be questioned.
9898 MR. BURMAN: If I can just respond here.
9899 I think in fact we have committed ourselves to a second run of the program, irrespective of what happens in this. I think that is an indication of how closely we feel about that.
9900 I think the only thing that we are saying in our project is that as we look ahead to a financial reality that it will take considerable energy and imagination on our part that we have to be careful about making commitments that we can't deliver on.
9901 I don't think the amount of time and the amount of effort that we have invested in this will be lost. Our hope would be that "Culture Shock" in whatever form, and as a program we hope, will continue on. So I do think that it is something that we are proud of and it is something that will remain in the schedule as long as we can keep it in the schedule.
9902 THE CHAIRPERSON: Thank you.
9903 I think that covers all our questions.
9904 Thank you very much.
9905 We will take a break and be back at 20 past 4:00 with the English TV network.
--- Short recess at / Courte suspension à 1605
--- Upon resuming at / Reprise à 1620
9906 LA PRÉSIDENTE: Alors, nous procédons maintenant avec la prochaine requérante.
9907 MS SANTERRE: We will now hear the application by the Canadian Broadcasting Corporation to renew the broadcasting licence to carry on its English-Language Television Network expiring 31st August 2000.
9908 Mr. Beatty.
PRESENTATION / PRÉSENTATION
9909 MR. BEATTY: Hello again, Madam Chair. This time, it is my pleasure to introduce the members of the panel for the English Television Network presentation.
9910 To my far right, stage left, is Slawko Klymkiw who is the Executive Director of Network Programming; to my immediate left is Phyllis Platt who is the Executive Director of Arts and Entertainment.
9911 Behind us, starting on your right, is Alan Clark who is the Head of Sports; Bob Culbert, whom you met earlier, who is the Executive Director of News, Current Affairs and Newsworld; Michael Harris who is the Executive Director of Regulatory Policy; and Bill Atkinson who is the Director of Finance and Administration.
9912 We also have staff available at the side table should you wish to explore in-depth such subjects as planning, audience research, sales and marketing, or transmission and distribution.
9913 Leading the English Television team is our new Vice-President, Harold Redekopp, whom you have had a chance to meet on a couple of occasions, whom I have not properly introduced to you before now. Harold has been on his job since the beginning of the year. Before I turn the presentation over to him, I want to tell you just a bit about him.
9914 Harold is a lifelong public broadcaster with a strong personal commitment both to the regions and to the arts. He joined the CBC in Winnipeg in 1973. He spent the early part of his career in the Radio service as a producer, an executive producer and area head, and in network management.
9915 In the 1980s, he broadened his scope to include both radio and television, first as Regional Director for Alberta and later as Vice-President of Regional Broadcasting.
9916 Most recently, Harold served as Vice-President of CBC Radio from 1992 to 1998.
9917 Now, we have asked him to devote his formidable energy and experience to completing the task of revitalizing English Television. I am confident that no one is better qualified than Harold is to take on this difficult but essential challenge and no one has a stronger commitment to the principles of public broadcasting.
9919 MR. REDEKOPP: Thank you, Perrin.
9920 Madam Chair, Commissioners, we are here today to speak to you about what CBC Television has accomplished over the past five years and what we intend to do over the next seven.
9921 When this hearing began last Tuesday, I said that our vision of CBC Television can be summed up in three words: Canadian. Public. Television. Today, I want to expand on that theme in terms of both our past achievements and future plans.
9922 In your last licence decision, the Commission stated that Canadianizing CBC Television was "the paramount priority". We agree and we have done it.
9923 Our schedule is now 80 per cent Canadian over the whole day and 90 per cent during prime time. In fact, the chart that is before you shows the new block schedule we unveiled last Thursday is 100 per cent Canadian in weekday prime time.
9924 We also addressed the Commission's concern regarding diversity of foreign content. In the 1994/95 season, our full-day schedule was approximately 30 per cent American and 10 per cent from other foreign sources. Today, U.S. and foreign programming occupy roughly equivalent amounts of air time: about 10 per cent each.
9925 That was a tremendous accomplishment, particularly since it was done while our budget was being reduced by 27 per cent. We certainly couldn't have done it alone. We worked with our partners in the independent production community from across the country. We also had absolutely crucial assistance from what is now the Canadian Television Fund.
9926 MS PLATT: Commissioners, as you know, starting next year, CBC no longer has any guaranteed access to the Fund. This has a potential direct impact on our ability to produce Canadian programming. We are confident in our ability to compete for these funds with other broadcasters on a level playing field.
9927 Assuming that our access to the Fund remains at or near current levels, we intend to maintain our current levels of Canadian content. But we wish to give the Commission confidence about what you can expect from us over the next seven years. That is why we have specified ambitious, yet achievable, minimum commitments for Canadian content, that we will meet or exceed, regardless of any changes in the Fund.
9928 MR. KLYMKIW: One of the CBC's major contributions to Canadian broadcasting is to maximize Canadian viewing to Canadian programs. We have done that and we will continue to do that. In spite of increasing fragmentation and competition, our audience share in prime time has remained relatively stable over the past two seasons, with an all-Canadian schedule.
9929 I know you heard these statistics before but I think they deserve to be said again: nine of 10 most-watched Canadian entertainment series this season -- and 16 of the top 20 -- were on the CBC. When asked which network has the best Canadian programs, almost 60 per cent of people say CBC. Perhaps the most impressive statistic of all: CBC Television accounts for almost half of all the prime-time viewing to Canadians programs, on all stations.
9930 MR. REDEKOPP: We believe that CBC Television is doing a good job of reaching and serving Canadians with distinctive, high-quality Canadian programming. We have prepared a short video on CBC Television and what the people who watch it have to say about it.
--- Video presentation / Présentation vidéo
9931 MR. REDEKOPP: Commissioners, what you saw in that short montage are some of the ways that CBC Television has lived up to its mandate as the national public broadcaster and some of the ways we have met your expectations from the previous licence term.
9932 We would like to highlight a few particularly important areas.
9933 MR. CULBERT: In news and current affairs, we remain solid leaders in providing thoughtful, in-depth coverage and investigative journalism with a uniquely Canadian and regional perspective. We do that with programs like "The National", "The Magazine", "Market Place", "the fifth estate", "Witness", "Midday", "Country Canada" and "Undercurrents", among others. We also do it with our new supper hour shows across the country. They have recently been redeveloped and are now more distinctive than ever.
9934 "The National" remains Canada's most watched news broadcast. Year after year in opinion surveys, CBC Television ranks first for best national news and most credible news programming.
9935 MS PLATT: In drama, we now significantly exceed the Commission's expectation of 5 1/2 hours a week, with programs that are clearly and proudly Canadian and produced in all parts of the country.
9936 To mention a few highlights from recent seasons: "DaVinci's Inquest" and "Nothing Too Good For A Cowboy" from B.C.; "North of 60" from Alberta; "Pit Pony" and "Black Harbour" from the Maritimes; and programs that push the envelope of originality and risk-taking, like "The Newsroom", "Foolish Heart", "Made in Canada" and "Twitch City"; programs that draw Canadians together, week after week, like "This Hour Has 22 Minutes" and "The Royal Canadian Air Farce".
9937 In children's programming, we expanded the CBC Playground block from two to three hours each weekday morning and we run another two hours of children's programming on Saturday mornings. The "Playground" is the most popular children's programming in its time period in Canada.
9938 Parents value it as a "safe haven" of commercial-free, non-violent programming for pre-schoolers that helps them grow, develop, learn and have fun. It has been celebrated by the Alliance for Children and Television in their intervention.
9939 MR. KLYMKIW: CBC Television has done a great deal to reflect Canada's diverse cultures to this country as a whole. I think of the multiracial casting of "Riverdale" and "Straight Up" and its new spin-off "In That' Mix", which is in a hip-hop station.
9940 We tell the stories of Canada's native people through series like "North of 60" and its spin-off movies, major specials like "Big Bear" and the "Aboriginal Achievement Awards", and the creation of a new aboriginal programming series, "All My Relations".
9941 We bring anglophone Canadians the realities of francophone Canada through bilingual specials, our festivals of French-Canada and broadcasts of Radio-Canada hits like "Omertà".
9942 There are many other programs that I believe distinguish CBC Television, from our science program "The Nature of Things", which is now celebrating its fortieth anniversary, to spirituality on "Man Alive", to full-length Canadian biographies on "Life and Times", to arts specials on "Something Special", to human interest stories from the communities of Canada on "On The Road Again".
9943 MR. REDEKOPP: In the coming licence term, we will continue to build on the strength of these and other aspects of our Canadians schedule while placing even more emphasis on our role and responsibility as public broadcaster.
9944 In 1994, the Commission restated its belief that:
"CBC Television should be a main highway in Canadian cultural communication, not a picturesque but seldom frequented side road."
We strongly agree.
9945 We intend to continue serving the full spectrum of interests and tastes by offering a wide range of high-quality Canadian programming that Canadians find attractive and indispensable. It is important to us that seven out of 10 English-speaking Canadians watch CBC Television each week. It is equally important that what they see there is something truly distinctive.
9946 Our job is to maximize the value of our programs to the public who helps pay for them. I certainly don't believe a public broadcaster achieves maximum value simply by offering more of the same fare that viewers can find elsewhere no matter how many people watch it.
9947 But equally, you don't maximize value by presenting a schedule that appeals only to a small minority, regardless of how distinctive it is. It is a delicate balance and one we are constantly recalibrating.
9948 As part of that ongoing process, there are certain areas which I believe deserve special attention. I referred to them last week as particular hallmarks of a public broadcaster. They are defining characteristics of CBC Television today and we intend to focus on them even more sharply in the years ahead.
9949 Let's look at three of them: youth programming, the performing arts, and amateur sport.
9950 MS PLATT: First, youth programming. At the beginning of the last licence term, we immediately added 2 1/2 hours of programming for youth audiences to our late afternoon schedule. At the same time, we began developing new Canadian youth programming. Some of it, like "JonoVision" is now on the air and more will soon be ready for broadcast.
9951 This past season, the CBC Television schedule included eight hours a week of programming appropriate for youth audiences. We currently have a 90-minute all-Canadian youth block from 4:00 to 5:30 on weekday afternoons. Our commitment is to replace the one remaining U.S. afternoon strip with Canadian youth programming within the first two years of the new licence term and to meet the Commission's expectation of at least five hours a week in this category on an ongoing basis.
9952 Second, the performing arts. During the last licence term, CBC Television presented complete live performance specials like "Long Day's Journey Into Night" from Stratford; made-for-television performance programming featuring the likes of Karen Kain and Yo-Yo Ma; and programs which combine performance with in-depth encounters with the artists, such as profiles of Ben Heppner and Christopher Plummer by Adrienne Clarkson and Harry Rasky.
9953 We have now achieved the Commission's expectation of at least one performance presentation a month. By a year from now, we will double this to at least 24 occasions annually, at least half in prime time.
9954 MR. CLARK: Commissioners, a third area in which we are making a specific commitment is amateur sport. As you know, this subject has received considerable attention recently, including the Mills Committee.
9955 Several intervenors to this hearing have praised the role CBC Television already plays in celebrating the achievements of our country's amateur athletes. For example, Paul Melia, Executive Director of the Spirit of Sport Foundation, has written:
"As our public broadcaster, the CBC has played an essential role in bringing sport, especially amateur sport, into the homes of millions of Canadians."
9956 It is important to remember that our involvement in professional sport is what enables us to produce and present amateur sport.
9957 We are committed to increase the amount of amateur sports on CBC Television by at least 50 per cent over the next two years. We will also expand the range of amateur sports we cover. And we are launching a new, regularly scheduled, prime time Canadian sports documentary series, focusing on amateur athletes. All of this will be achieved without any overall increase in the total amount of sports programming.
9958 MR. REDEKOPP: Commissioners, I would like to make a few general comments on the subject of sports. Virtually all national public broadcasters see sports as an appropriate part of a balanced schedule. Providing it free, over-the-air, to all citizens is part of serving all segments of society and telling our country's story.
9959 Like the rest of our schedule, our sports programming is now almost entirely Canadian. It is recognized for its quality around the world. We have taken steps in recent years to reduce disruption to the schedule from professional sports.
9960 We are committed, at a minimum, to not increase the overall proportion of sports on our scheduling in the coming licence term. We will carefully review each of our major professional sports contracts as they come up for renewal in the next several years.
9961 We will seek reductions, where appropriate, in the total amount of air time we devote to professional sport, particularly during prime time. In fact, that process has already begun. There will be a modest decrease in the amount of professional sports on the schedule for the coming season. When the amateur sports strategy is fully implemented next season, the amount of professional sports will fall by 10 per cent.
9962 As we continue this ongoing review, we have to bear in mind that our professional sports programming attracts viewers and revenues to the rest of the schedule. Replacing it leaves us with fewer resources for other activities.
9963 There are two other areas I would like to touch on where we are already performing well and intend to do even more in the future.
9964 The first is regional reflection. To my mind, this is an absolutely essential responsibility of the national public broadcaster, particularly in a country as regionally decentralized as Canada.
9965 Regional production currently accounts for approximately 50 per cent of the total CBC Television schedule. When you include programs produced in Toronto with a high degree of regional content, at least half of our schedule reflects the regions in one way or another.
9966 We have announced a bold new initiative in regional programming. Over the next licence period, we will return an hour a week of prime time to the regions, for 26 weeks out of the year, to present programs in the areas of variety, drama and information.
9967 We are also committed to broadcasting the best of this regional programming on the national network: one 13-week series in the first part of the licence term and two such series in the later years. Overall, it is a commitment of more than 1,000 hours of regional programming and approximately $25 million in direct expenditures.
9968 The other area I want to touch on is independent production. Your expectation was at least 40 per cent, eventually rising to 50 per cent independent production in all genres except news and sports. Well, our actual performance is closer to 60 per cent overall and 90 per cent in drama.
9969 This activity too is highly regionally decentralized. At the present time, production from outside Toronto represents more than half of the total investments in fund-supported projects.
9970 In the coming licence term, we are committed to working even more closely with our independent production partners in all parts of the country. That includes the development of a comprehensive "terms of trade" agreement which we are already working on in close collaboration with the CFTPA.
9971 We have just announced another significant commitment to Canadian independent production. CBC English Television will invest $30 million over the next five years in the production, acquisition and promotion of Canadian feature films. We will also create new and expanded on-air windows for them.
9972 Last Thursday, as we do every year at this time, we unveiled the new fall schedule for CBC Television. It is in front of you here and I would like to ask our Program Director, Slawko Klymkiw, to take you briefly through some of the highlights of that schedule.
9973 MR. KLIMKIW: Commissioners, as Harold has said, we are in the middle of a process. We have already taken the first giant step. We have Canadianized the schedule. I would like to repeat that. I suspect you are going to hear it a few times from us: We have Canadianized the schedule.
9974 We have an important challenge in front of us: that is to strengthen and consolidate that schedule and further differentiate it as a unique public broadcasting offering.
9975 I wish I had my whole schedule board here and I would love to go through it with you day-by-day, week-by-week, hour-by-hour, but they won't let me because it will take too long. So I thought I would just make a few observations.
9976 First, to underline the fact that this schedule is 100 per cent Canadian in weekday prime time.
9977 Second, what you see here is consistency. There are time blocks devoted to specific themes like comedy or current affairs. Many of our strongest programs are returning. We have created real Canadian hits and they deserve a long run.
9978 We will have mini-series and specials from two of our favourite Annes: "Anne of Green Gables" and Anne Murray. There are 11 new series this season. The process of development and innovation continues.
9979 Undoubtedly, the jewel in next year's crown is our epic documentary project, "Canada: A People's History". This 30-hour series is the first definitive history of our country. It is a co-production between CBC and Radio-Canada. It was conceived from the outset to be produced in both English and French. It is public broadcasting at its finest and it will be commercial-free.
9980 You can see on this schedule concrete action towards several of the long-term goals we have been speaking about today. To take two examples: "CBC Thursday" is an hour a week in prime time devoted to Canadian and international performing arts, documentaries and feature films. Some weeks, it will be expanded to two hours and I anticipate that that expansion will be permanent by the following season.
9981 Other showcases for the performing arts will be created on Sunday afternoons and evenings, and on Saturday afternoons, we have created a consistent block to fulfil our expanded commitment to amateur sports and sports documentaries.
9982 In future years, our schedule will continue to evolve in line with the priorities and commitments we have outlined today. That includes the creation of a new prime time window for regional programming and a place to present the best of regional programming on the full national network.
9983 MR. REDEKOPP: Commissioners, it is an understatement to say that the past five years have not been easy ones for CBC Television. In fact, they were in many ways the most difficult in our history.
9984 We tackled the challenges head-on. To cope with the financial situation, we slashed administrative overhead. We negotiated new union agreements, allowing more flexibility in the workplace. We introduced new digital technology.
9985 To differentiate ourselves in an expanding television universe, we created a distinctively Canadian schedule. We made maximum use of the Canadian Television Fund. And yes, we promoted and sold our Canadian schedule aggressively to maximize both the audiences and revenues we could attract to it. We did that without compromising our scheduling principles or our high standards of program quality and journalistic integrity.
9986 Naturally, there were trade-offs along the way. It is impossible to absorb budget reductions of this magnitude without significant impacts on our programming and service. Nor is it possible to make changes on this scale this quickly and get it all right the first time. Now is a time for stock-taking, for consolidation, for adjustment, and for moving forward.
9987 As you have heard in the cross-country consultation, everyone wants more and more from CBC Television. Yet, we have less and less to do it with: a significantly reduced parliamentary appropriation, more competition for commercial revenue, and new rules for the Canadian Television Fund.
9988 We will do our best but we cannot do it all and we certainly cannot do it if our programming and operational flexibility is unduly constrained.
9989 The commitments we have made in our licence renewal applications are ambitious, yet realistic, given our anticipated financial circumstances. It is a carefully calibrated plan. All the parts are dependent on one another.
9990 I hope we have shown you how much progress we have already made and how we intend to do even more in the years ahead. We have been quite specific about our commitments. We will increase our reflection of the diverse regions and cultures of this country. We will reconnect with Canada's young people. We will expand our commitment to Canadian talent, particularly in the area of amateur sports and the performing arts.
9991 We believe in Canadian Public Television: built on our historic strengths and adapted to the new millennium. As we enter the 21st Century, CBC Television will remain proudly and distinctively Canadian and increasingly recognized as a public broadcasting service.
9992 We will continue to set the standard for quality and innovation in all programming genres. We will provide a balanced schedule that is relevant and indispensable for viewers of all tastes and interests. We will contribute even more diversity to the Canadian broadcasting system. We trust that we will continue to earn the support of Canadians.
9993 Madam Chair, that concludes our presentation. We would be pleased to answer your questions.
9994 THE CHAIRPERSON: Thank you very much. I would ask Commissioner Cram to address the questions of the Commission.
9995 COMMISSIONER CRAM: Thank you and welcome and thank you for your presentation.
9996 First, I apologize for my cold. I have been coughing all day. Second, I apologize because I am new to this business. So if I make an error, please tell me. I am not infallible and never have been.
9997 I have a good number of questions of clarification to ask. Hopefully, we can get through them as quickly as possible.
9998 My first one though is your new schedule. I have your publicity package and it says "Saturday Night Report" is in between the double-header. It doesn't look like it is on your lovely 7-foot by 15-foot stand up there. Is there a "Saturday Report" on Saturday night?
9999 MR. KLIMKIW: Saturday between the hockey games, we run a very short newscast. So we have "Saturday Report" much earlier in the evening and then we have a smaller newscast between the two hockey games. So I think because that thing that was sent to you was for the sales launch, it essentially compressed it and that is a more accurate schedule for the purposes of this discussion.
10000 COMMISSIONER CRAM: I see. Okay. Thank you. I wanted to start talking about your coverage. Off air, you have a coverage or an ability to cover 97-98 per cent of the population, correct?
10001 MR. REDEKOPP: Correct.
10002 COMMISSIONER CRAM: On Tuesday last, I think it was either you, Mr. Beatty or Ms Tremblay, who said that 43 per cent of people in fact access English CBC off air. I had it in my notes. So that is why I was wondering who actually accesses CBC Television off air.
10003 MR. BEATTY: I believe the figure is that 25 per cent of viewers to CBC Television get us off air and not through cable. I believe that is the figure. Is that correct? I think maybe that 25 per cent of Canadian homes don't have cable.
10004 COMMISSIONER CRAM: Aren't passed with cable, yes.
10005 MS WILSON: I think that 43 per cent is that 43 per cent of the hours tuned to the CBC come from houses that don't have cable. That's 43.
10006 COMMISSIONER CRAM: So 43 per cent of your viewing is from people who do not have cable. And that is based on an hourly basis, is it?
10007 MS WILSON: Correct, or Monday to Sunday, sign on to sign off, all the hours.
10008 COMMISSIONER CRAM: Okay. Thanks.
10009 So those people would not have access to Newsworld and would only have access off air to perhaps the Canadian conventionals and the U.S. off airs?
10010 MR. BEATTY: In many instances, not the U.S. off airs because you are particularly dealing with rural and remote areas where people might very well not be able to receive the U.S. with a rooftop antenna.
10011 COMMISSIONER CRAM: Unless you are in Windsor. That is probably the only place where you would get the conventionals -- or the U.S. conventionals.
10012 So I want to talk about regional coverage and regional reflection. First, I want to start off with the environment. In the last 10-15 years, would you agree that there has been, as you say, an explosion of choices, Mr. Beatty? But none of them concentrate on any regional reflection. None of them has that as their purpose in our vast world of channels.
10013 MR. BEATTY: Commissioner, I guess I would put it this way: That each of the Canadian players has a responsibility to give some regional reflection and some presentation of Canada. It is much more central to our mandate as a public broadcaster to do that.
10014 One of the things we have tried to do is we Canadianized and look at our national schedules to do much more in terms of setting programs in the regions and to give a much better sense, both within a region and across regions of the diversity of Canada.
10015 COMMISSIONER CRAM: I wanted to talk about the actual terms of the decision 94/437. In 94/437, they made a distinction between production and reflection. Can we start off with the first issue of regional and what that means to you?
10016 MR. REDEKOPP: Well, I think the way we have defined regional here, we are talking about two things. We are talking about the national service and its regional reflection, that is, parts outside of Toronto and all parts of the country, excluding what I would call national news coming from Ottawa. So all of our coding has in fact looked at regionally specific stories that we see on "The National".
10017 The other definition of regional, of course, refers to regional programming for regional audiences. In that case, for the most part, we are looking at local programming in provinces, except in the areas of the Maritimes, where we have joint programming for part of that, and the North, obviously would have pan-North programming.
10018 So regional programming in terms of our definition speaks to regional reflection on the national network and then regional programming for regional audiences, largely within provincial boundaries, with the exception of the Maritimes.
10019 COMMISSIONER CRAM: So then the term "regional" means outside of Toronto?
10020 MR. REDEKOPP: Yes, it does.
10021 COMMISSIONER CRAM: And in terms of production, if I have read your application correctly, on page 34, you are at 36.3 hours in the year 98-99 -- page 38.
10022 MR. REDEKOPP: Just give me a minute, Commissioner, I will try to find that page.
--- Pause / Pause
10023 MR. REDEKOPP: That is correct but since we filed this application, Commissioner Cram, we submitted to the Commission a more in-depth analysis of where we spend money, where we produce and I wonder whether we could refer you to that chart.
10024 COMMISSIONER CRAM: The larger one, the one that was 14 by 11?
10025 MR. REDEKOPP: Yes, and I wonder whether Michael can tell me what it is quoted as.
10026 MR. HARRIS: We have it on an overhead that we can put up. It is part of the regional --
10027 COMMISSIONER CRAM: This?
10028 MR. HARRIS: It is part of the blue book that was submitted --
10029 MR. REDEKOPP: While we are finding it, Commissioner, the reason we did this is we felt that it gave a more accurate reflection of where the budget was assigned, where we produce, production hours, schedule hours and then total reflection. So that is really why I would like to --
10030 COMMISSIONER CRAM: I am just talking about regional production right now, not reflection, and so that is why I was at the 36.3 hours. We will get to reflection later because the decision clearly defines a distinction between "production" and "reflection".
10031 MR. REDEKOPP: I am going to ask Michael to help me out in a moment, but I am not looking at that chart. I am looking at the chart we filed. Just staying with your question on production, if you look at all of the production we do and you include the multiplier effect, I have here something like 128 hours per week from regional locations. But I will ask Michael to speak to this.
10032 MR. HARRIS: It is in all the kits that you received today. In the booklet, it is at the second page.
--- Pause / Pause
10033 COMMISSIONER CRAM: Oh, okay, so now you are at -- from the 36 hours, you are at 128 hours?
10034 MR. REDEKOPP: That is correct.
10035 COMMISSIONER CRAM: And that was based on?
10036 MR. REDEKOPP: That includes all local or regional production in all of our 14 locations. Obviously, for regional programming, it also includes production for the network.
10037 COMMISSIONER CRAM: So network programming, the amount of regional production on the network, is that that 36-hour number then?
10038 MR. REDEKOPP: Well, I would sort of be at variance with what we have originally published but according to this bar chart here, if you look at production hours for the network, I think you have to look at schedule hours. So out of a possible 112 hours per week of programming on the schedule, about 38 hours for the network is produced in the regions and the remaining seven and a half hours is regional for regional.
10039 So out of a total of 112 hours a week that you would see in any regional community, about 45 hours of that is regional production. That is where we get the figure that 40 per cent of production for the schedule comes from regional locations.
10040 COMMISSIONER CRAM: So when you say 38 hours that you are very close to the 36 hours that you said in your application for regional production that is shown on the network?
10041 MR. REDEKOPP: Correct.
10042 COMMISSIONER CRAM: Do you agree with me that in 1992-93 there were 43 hours comparable on the regions?
10043 MR. REDEKOPP: Michael?
10044 MR. HARRIS: Yes, yes, not on the same basis.
10045 COMMISSIONER CRAM: So you have met the expectation in the decision but the hours are down on a weekly basis in terms of regional production on the network.
10046 MR. REDEKOPP: I will ask Michael to speak to this. My understanding is that we are not down in terms of regional production for the network. I think where we had to pull back was in regional production for regions and we can talk about the weekend news. Michael.
10047 MR. HARRIS: Yes, I think the cutbacks in the local news are part of this. The regional contributions to the network schedule were one of the -- I guess, the larger picture is that during the process of the cuts, and I am sure we will be talking about this, that one of the areas that were hardest hit were the productions in the regions that were done for the regions and for the network, some late night music shows, some half-hour shows during the week that were on the network. Essentially, the resources from those programs were ones that disappeared and largely are being replaced in our new initiatives. So I think that is reflected there.
10048 COMMISSIONER CRAM: 94/437 talked about the purpose of the concept of production going on in the network to be the development and developing production in reflective ways of Canada but also the development of talent pools. That was one of the two reasons for production.
10049 When I look at pages 39 and 40 of your application, it appears to me you have done -- and I hate to use an analogy -- but it appears to me you have done a really good scuba-dive job of people in Vancouver, Halifax and Ottawa, but you barely skinned the surface anywhere else in terms of regional production on the network.
10050 MR. REDEKOPP: Well, I will let Phyllis Platt speak to regional production because she is intimately involved with our regional colleagues and certainly with the independent sector.
10051 I guess, just as a framework to the answer, Commissioner Cram, I would have to say that in 1994 at our licence renewal none of us anticipated the kind of cuts that we were going to have to sustain to CBC. So all of our predictions at that time were based on stable funding and indeed increased funding. The regrettable part of dealing with cuts is that we had, first and foremost, to ensure that we had a viable, vibrant national service reflective of all regions, and secondly, that we had regional programming for regional audiences.
10052 But I think even with the reductions, we have made every effort to be regionally sensitive in terms of talent development and, in fact, reflecting independent production talent and other talent across the country. But perhaps I could ask Phyllis to speak to this.
10053 MS PLATT: I think what we are seeing across the country is an extraordinary maturation of the independent production community. It has nonetheless been somewhat staged.
10054 I think if you look, for example, at a community like the Maritimes or specifically the Halifax region, you will see how an attempt, a number of years ago, to sort of connect the dots actually led to a very vital, vibrant production sector in Halifax with the connections among Téléfilm, the CBC regional operation, Nova Scotia Film Development, various other provincial support systems, plus of course the independent community.
10055 You ended up with a growing, burgeoning strengthening industry in that region. I think gradually we have seen that starting to happen more and more in other parts of the country. Obviously, Vancouver already has a very strong north-south based industry partly because of the service production that they do for the United States.
10056 So as the CBC went through its cuts and then moved into the period of the Canadian Television Fund, which was a godsend for us, we have been working more and more with the independent sector and working to try to strengthen the sector in the various regions of Canada.
10057 So I think what you are seeing is the growth of the regions over time plus, if I can just add, the fact that the provincial supports have not been consistent across the country. Sometimes a province will come in with a significant tax credit program; sometimes one will disappear and that has a very direct and marked effect on the independence in the community.
10058 So where the activity happens in terms of regional production, for us, is dependent on what is happening to the independent production community in that particular region.
10059 COMMISSIONER CRAM: It appears to me, and the Act talks about reflecting Canada and its regions to national audiences, and I guess my question is: Isn't there some sort of proportional reflection required as opposed to a reflection from Vancouver, Halifax and Ottawa, with one hour from Alberta, two hours from Saskatchewan, one hour from Manitoba and one from Newfoundland?
10060 So my point is: When I look at your mandate, is there not some sort of proportional reflection that would be required in between the regions?
10061 MS PLATT: I think one of the things that we keep top of mind is how to try to promote and help produce high-quality programming. I think we are seeing, as I said, the growth of the industry across the country that is more and more able to do that. But if you look at the ratio of development submissions, for example, to projects that we go into development with, it is pretty equivalent.
10062 In other words, the production communities are very small in some of the provinces still. They are growing and strengthening, but in some regions they are still very small. So we get a very small number of development submissions from those regions compared to the overall percentage.
10063 We receive about 700 submissions a year for development. Our development ratio is about 11:1 and we have produced significantly in provinces like Alberta, for example, and Newfoundland. But it tends to be more cyclical in those regions because, again, of the lack of critical mass and infrastructure, or as in the case of Alberta, again, a circumstance where the provincial government removed the subsidy and that has now been, to some degree, reintroduced. But again, these shifts and roundabouts create changes over which we have little or no control.
10064 When New Brunswick, for example, introduced its significant subsidy program, we had a movie that was being produced in British Columbia that actually moved to New Brunswick at the last minute because of what was happening in the British Columbia underwriting and subsidy provincial program.
10065 So we try to respond to this by helping, as I said, to connect the dots in whatever ways we can over time in the various regions and trying to help strengthen the companies that exist in those regions.
10066 We have a very long history of supporting small- and medium-sized companies, for example. I think of companies like Rinkrat Productions in Newfoundland who just recently produced "Dooley Gardens", Sneak the Goat out of Halifax and Newfoundland who produced "Gullage's Taxi" for example. These are companies that we have put confidence in and tried to help strengthen and develop in order that they can in their regions build critical mass and infrastructure to help us meet our own goals as well.
10067 COMMISSIONER CRAM: My question wasn't that. My question was: Isn't it in your mandate to reflect Canada and its regions to national audiences? In that reflection, is it not required or is it not at least implicit that that reflection should be at least proportionate to the population?
10068 In other words, if there are one million people in Saskatchewan, shouldn't there at least be some reflection to that rough degree of their lives and their homes? And isn't that what is required in the reflection?
10069 MR. REDEKOPP: I am going to ask a couple of people to speak to that. I will ask Slawko in just a moment.
10070 Again, if I can just take a minute, Commissioner Cram.
10071 All this is really in a context. You are absolutely right that we are called upon to reflect all parts of this country.
10072 Coming out of 1994 we faced the enormous budget challenge. English television took, I think, a tremendous step forward and Canadianized in the face of all of that. It wasn't entirely clear what the outcome would be in terms of revenue and acceptance of these programs. It was enormously successful. I think the situation has stabilized.
10073 During this whole process there were calls from all kinds of quarters and some national newspapers to get out of the regions. I think English television resisted that. I think, yes, they cut proportionately higher in the regions than they did at the network in order to maintain a solid network, but I think we are now in the process of recalibrating. The initiative we have talked about, that is building back 1,000 hours over the license period, is an attempt in non-information in these regions that we are talking about to reconnect with communities, to act as a catalyst with the independent sector in many occasions, and sometimes with our own people, to act as a talent incubator and to see the net result of that hit the network within the license period.
10074 But it isn't, I don't think, a strict arithmetic kind of issue, because if that were the case we would probably do less in Atlantic Canada. You could argue that we are over represented there, and yet there is such a rich culture, rich vein that we want to tap that obviously we are very active there. I think it is our job, and it will be our job over the next license period, to do that kind of work in all parts of the country, including the prairies.
10075 I will ask Slawko to say a word about reflecting the country, getting the right balance from all parts of the country.
10076 MR. KLIMKIW: I promise I will be short on this.
10077 We all believe in the spirit of reflecting every province on the network. Most of us come from different places.
10078 But Harold is right, pragmatically the first thing we did after our cuts, after several million dollars and several thousand -- or over 1,000 people left the building, or left our company, is we decided we wanted to strengthen the prime time schedule. In that decision -- and I think that was what Phyllis was talking about, in every decision we made about the programming on the network we tried to take into account the notion of reflecting the country.
10079 Have we done it proportionately? The answer is we haven't.
10080 But I think the new initiative which we can do now is going to allow us to build the synergy and the relationship that is going to allow us to begin to produce more programs out of Manitoba, Saskatchewan, Alberta and other provinces, to begin to create a talent relationship, which we already have there but build on it, to create air time for it, to create places in the schedule for it, pride of place in the schedule.
10081 I think that that was probably the way to go. You have to do this in a systematic business way, and that is what we did. All of us at this table want to rebuild that.
10082 COMMISSIONER CRAM: In terms of reflection -- and again I'm talking about the national network, what is on the network -- the decision was very clear talking about:
"... programming that deals with the social and cultural life as much as with the geography of a particular region. It does this through its depiction on the region's history, its stories, its music and its people." (As read)
10083 Now, in your application you didn't reflect that or provide us with any numbers. Do I take it now that you are saying that there is 57 hours of that?
10084 MR. REDEKOPP: Yes. What we are saying, if you are looking at that bottom bar graph is -- first of all, we are saying that 45 hours a week or 40 per cent, just over 40 per cent of our schedule is produced in the regions. That includes independent productions like "Da Vinci's Inquest" or "This Hour Has 22 Minutes" or "Country Canada" from Winnipeg. When we add to that programming from the network -- and we have gone through every single program and looked at programs that have regional content, regional reflection -- over 50 per cent of our schedule is regionally sensitive.
10085 So that is really what that figure refers to. It is all of our programming, including the regional programming, for the network that is regional in nature.
10086 COMMISSIONER CRAM: Do I take it, then, that it is your position that regional reflection -- if it is regionally produced it has to be regionally reflective?
10087 MR. REDEKOPP: Yes. I think in most cases -- I could find an example of the "Urban Peasant". You could argue that that program produced in Vancouver is not regionally sensitive. It is a cooking show and I suppose there are some goodies from the west coast that get into his pot, but I wouldn't argue that that would be a good example of a regionally sensitive program. "Da Vinci's Inquest", on the other hand, is.
10088 COMMISSIONER CRAM: Because that is exactly what the decision talked about was "Urban Peasant" not being regional, in the paragraph before the one that I have just quoted.
10089 So you have not done that analysis in your numbers of sort ascertaining what is generic as opposed to -- because what you said is you added regional production and then the reflection from the network is this number of 57 hours.
10090 MR. REDEKOPP: I will let Michael speak to the analysis.
10091 MR. HARRIS: The analysis in this regional study, the 57 hours, I believe is the programming that is actually regionally reflective, and the stuff that doesn't reflect the regions, the gourmet show that I can never remember the name of, is not included. It is included as programming that comes from space, but the 57 hours is programming that is actually, we think, reflective of the region where it is produced.
10092 COMMISSIONER CRAM: Could you give me just your list of the ones -- in due course, of the ones that you think comprise the 57 hours?
10093 Thank you.
10094 What about the future in terms of regional reflection?
10095 MR. KLIMKIW: Well, a couple of things. First of all, the programs like "The Gardener" and "Urban Peasant", Michael, and programs that could come from anywhere, what we have been trying to do systematically is to begin to do more regionally reflective material in the regions and do less of those.
10096 Those were all very, very good programs. They were informationally driven, they, I thought, brought important information to people. But all of us here recognize that we have to not only recalibrate but make sure that what we put on the air has distinctiveness to it.
10097 But you can't do that all at once. So we are beginning to do that. We hope that the initiative that we are beginning with our regional stations, our regional friends, is going to begin to create programming that, first of all, reconnects us with those centres, mainly because they are the gateway to our schedule. They are the gateway to our communities. We simply recognize that we have to do that.
10098 Two, we hope again that there is a synergy there that creates the kind of structure that Phyllis talked about where we actually nurture communities and work with them so that over time we start creating more and more shows that will end up on CBC network.
10099 I should just say this: There is only so much shelf space on that network, and we have to make hard choices all the time. So I only say that to keep that in mind. We always are making choices. But I would argue that the notion of reflection is on top of the mind all the time.
10100 MS PLATT: If I could just add that our development out of Toronto is down to 29 per cent of our development in this current year.
10101 COMMISSIONER CRAM: So 29 of your development is in Toronto. Is that it?
10102 MS PLATT: It is down to that figure. It was significantly higher in the past, but we are finding that we can -- there are strong companies in the regions with whom we can develop for the future, speaking to your question about the future.
10103 COMMISSIONER CRAM: I'm still on regional reflection as opposed to production.
10104 I understand that there will be, on the network 39 hours, because that will be the 13 times three episodes that come from the regional programming. What else in terms of regional reflection is planned or do you have on the board now?
10105 MR. KLIMKIW: Commissioner Cram, I promise I will answer that question.
10106 But we do a lot of that now. As you know, we have given you lists of programs, which I don't want to read out loud, which all have an enormous amount of regional reflection which talk about things that happen throughout this country that I think in many cases people do know about. I mean, "Big Bear", "Orphans of Duplessi". I really don't want to do a list of all of them because I think we have submitted them, but we have done, I think, a good job.
10107 Can we do a better job? We will do a better job.
10108 Can we do more in terms of what Phyllis was talking about? We are going to attempt to do that.
10109 But I think the point we want to make is that we have been trying to systematically build a national network schedule that is reflective, that holds its audience, that gets more Canadians to watch television, and in all of that we are trying to do this in a systematic way so that the whole thing moves forward so that we meet our public policy goals and we meet our cultural goals.
10110 So my sense is we have done a lot of that and we are going to do more of it. I must say, we are proud of how much we have done under some very difficult circumstances.
10111 COMMISSIONER CRAM: I recognize that. Don't get me wrong.
10112 Mr. Redekopp, I know you are going to say the last many years were hard, and I agree with you they were. They were difficult.
10113 What concerns me and your poll, your Polara poll is very clear on it too, and the consults were clear on it also, people don't think you are doing that well at reflecting regions to regions.
10114 Your Polara poll at page 20, which is the Canadians overall talking about performance on objectives, has at second last "Reflecting the different regions of Canada". Twenty per cent say "Very Good", 57 per cent say "Good", but it is the second last they say in terms of your overall performance.
10115 That sort of fortifies what we saw in the regions on our consults. So has that changed your thinking in any way, or your planning in any way?
10116 MR. KLIMKIW: Well, as I said earlier, none of us wanted to decrease regional reflection, but we also had to run, I think, an important institution, and in that institution we did everything we could to preserve the national schedule and reflect. When we shut down stations many years ago and we did less half hours in the regions, I think people got the sense that we weren't doing as much, because we weren't, and we tried to reflect it in another way.
10117 I don't want to get defensive about that. That is what actually happened and we attempt --
10118 COMMISSIONER CRAM: No, but what I'm saying is: How are you going to change that perception then, if you say it is a perception?
10119 MR. KLIMKIW: But as I said before, the new initiative is really to reconnect with the gateways to our audiences. That really is in our regional locations.
10120 We simply heard that across the country, like you did. We heard it before that, you know, but the truth is we had to make hard choices. You might not agree with all our hard choices but we had to make them and we did.
10121 But I think the new initiative we put in front of you is going to begin to deal with that.
10122 But, do you know what? It is going to be neighbourhood-by-neighbourhood, street-by-street, city-by-city, because we are going to have to ostensibly get people -- I was told not to say "ostensibly" actually, but -- we have to get those folks to buy back into the CBC on a regional basis.
10123 But we also have to be fiscally responsible, and I think what we need to do is continue the great success that we have had in terms of people watching the Canadian schedule. So all of that I think factors into it.
10124 MR. BEATTY: Commissioner, could I add a word to that?
10125 You will find it hard to believe but I actually forgot to bring my copy of the poll, so thank you, Harold, for lending that to me.
10126 You are quite right that on this list you find "Reflecting the different regions of Canada" coming third from the bottom. That is with 76 per cent of respondents saying that we are doing a "Very Good" or a "Good" job.
10127 What this list says is that people are very satisfied with the way in which it is being done, but they are even more enthusiastic about providing national news and information or broadening international news and so on.
10128 But I can tell you, as somebody who spent 21 years in politics, if I ever got score figures like this, well, I wouldn't be here, I would still be in politics.
--- Laughter / Rires
10129 COMMISSIONER CRAM: The issue is, and that is under the lower side of the poll in terms of, well, you are not doing that as well.
10130 MR. BEATTY: I guess all I'm saying, Commissioner, is something has to be on the lower side of the poll, and I suspect if providing national news and information were there and this was at the very top we would be -- the question being: Why is providing national news and information third from the bottom?
10131 But these are figures in and of themselves which are exceptionally encouraging. Indeed when you look in the poll ask people to compare the programming on CBC with five years ago, you will find again across the board people are saying it is better programming today than it was at that time. Something which is very encouraging still.
10132 MS PLATT: Could I just add that I think it is really important to maybe do a little listing and just think in terms of the shows that people are seeing on CBC television.
10133 If you look at drama for example, which is one of the two sort of big carriers for a prime time schedule, you think of names like "Dooley Gardens" and "Emily of New Moon" and "This Hour Has 22 Minutes" and "Black Harbour" and "North of 60" and "Da Vinci's Inquest" and "Nothing Too Good For a Cowboy".
10134 I mean, the sense -- and I think we saw it reflected in the video -- on people's parts I do believe, not just in drama programming but in all of our programming, is that they are seeing the country reflected, they are seeing artists from all over the country, and I feel very proud of that.
10135 So I hope I didn't go on too long in the wrong direction, because I really am very passionate about trying to reflect the country to itself, as is everyone who works with me. We try to do that in collaboration with independents to a large degree now because we are doing more and more of our work with the independents, thus our interest in helping strengthen their communities.
10136 But again, if you think of the titles and what you actually see on the network, it is very patent Canadian.
10137 MR. REDEKOPP: Could I ask Bob Culbert to just say a word about this?
10138 Bob obviously is head of news and current affairs, and he is responsible for the regional supper hours, and they have just been through a rebuilding process and he can talk about the kind of daily contact that we have with our audiences that we are building on.
10139 MR. CULBERT: Yes. I just think it is important to remind you, I think my programs, the network shows, occupy about 42 per cent of the prime time schedule, that is network news and current affairs.
10140 By the very nature of the programs they are regionally reflective because they follow the story, and the story is seldom in Toronto and seldom in Ontario. If you watch the programs they are always bringing stories from all over the country, either in documentary story telling or in the guests they choose for the programs.
10141 The other thing that has strangely happened partly because of the cuts is that the relationship between the network shows and the regional shows has changed quite dramatically and there are more co-productions and almost all the network shows have more co-productions going with network programming, part of their attempt to sort of survive the cuts.
10142 So you will see in all my programming a lot more regional stories than probably you would have seen four or five years ago. But even before that, by the very nature, as I say, of the programs, they are regionally reflective every episode they product. That goes for the news, the magazine, the current affairs show.
10143 COMMISSIONER CRAM: I would next want to move on to children and youth and go into 94/437. It moved that particular category from sixth priority to second and talked about, frankly, the issue of teens and pre-teen programming or youth and, in fact, went back to 1987 where they were still worried about the same age group then. I want to be clear, when I'm using that term "teens" and "pre-teens" or "youth" I am talking about 11 to 17 year olds for the purposes of this discussion, so we know.
10144 Your portion of the talk, Ms Platt, said you are now up to 9 hours per week.
10145 MS PLATT: I think if I could just --
10146 COMMISSIONER CRAM: I'm sorry, eight hours.
10147 MS PLATT: Yes. We had mentioned eight hours in our talk.
10148 One of the key issues for us is the coding of the programming, whether it is coded as youth or family. For example, we did bring in programming after the last decision to meet the expectation of programming for youth and in that programming there was a strip of Degrassi and there was a strip of "The Odyssey" which we felt very definitely was youth programming for that particular audience, but because those programs had run in prime time previously and they were being stripped for youth audience in the afternoon they were coded as family.
10149 So if you look at the afternoon programming block with "Avonlea" and "JonoVision" and "Street Cents" and our "Cocotte" figure, you do have that half hour strip of U.S. programming. But the actual hours in the schedule that we truly believe are appropriate for youth audience does come to that eight-hour figure.
10150 COMMISSIONER CRAM: Okay. That was the discrepancy in Year 1, wasn't it, that "Degrassi" was considered by the Commission as family and you considered that you had met the expectation because you considered "Degrassi" to be youth?
10151 MS PLATT: That's correct. It wasn't an issue of us flouting the regulations. It was really I think pretty clear to us that when we had programmed those shows they were designed for a youth audience. But also the time it takes to develop new programming was a significant issue for us and we immediately put "JonoVision", for example, into development and eventually brought it to air.
10152 COMMISSIONER CRAM: So the eight hours, the terminology you use in your speech today, "appropriate for youth audiences", does not necessarily mean that it is categorized as youth. Is that what you are saying?
10153 MS PLATT: That's correct.
10154 COMMISSIONER CRAM: Because my records show you are in fact at three hours. Is that correct?
10155 MS PLATT: If you go by the coding of the Commission, that's correct.
10156 COMMISSIONER CRAM: Yes, by our rules.
10157 So the issue I guess then comes down to you are not going to reach the five hours in the Commission's terms by the end of the term at all? That is August of this --
10158 MS PLATT: By the end of this current term? No, we will not.
10159 COMMISSIONER CRAM: How or when do you propose to meet the five hours?
10160 MS PLATT: We have a number of programs in development and in production. We have "Darren & Grace", "Back to Shearwood(ph)", "Jules Vern", "Our Hero", "Edgemont Road", "In the Mix", and "Radioactive", which are all designed for youth and in production. So certainly by the end of the next licence period, but we believe far earlier than that, by the second or third year.
10161 COMMISSIONER CRAM: So by Year 2 could you go up to four hours?
10162 MS PLATT: The issue again I think is one of volume. We are in production, as I said, on a number of shows. When they can be delivered and ready for schedule is somewhat dependant on financing, somewhat dependant on the schedules of the various independent producers. So I think we would need to look closely at that figure that you have just quoted to tell you when we could indeed get to that number, but we can do that.
10163 COMMISSIONER CRAM: So could you get to five hours in three years?
10164 MS PLATT: I would again ask if we could do the analysis before making that commitment.
10165 COMMISSIONER CRAM: By the end of the licence term could the numbers be higher than that?
10166 MS PLATT: Well, it depends a lot on the various priorities within the overall schedule.
10167 I think the comment that Slawko made earlier about there is only so much room in the schedule is a very important one. We have a number of commitments to meet within the schedule: Youth is a very significant one; pre-school children is a significant one; should there be some adult programming within the day as well? All of those are questions that we would be grappling with.
10168 MR. KLIMKIW: If I could add to that a little.
10169 What we tried to do is build the architecture in the schedule to get young people, the age group that you are talking about, to come to the CBC. It seems to me the thing we all want is young people to use the public broadcaster, so we built the architecture. We still have some American in there and the major reason we left that in there is so that those young people would flow through that particular two hours.
10170 Phyllis has done a terrific job. If we just counted up the number of hours they are producing and if I could put it on the schedule we would be at five hours very quickly. The issue is: What makes sense in that time block? Some of it must go into prime time, so we have to make that work. We are now trying to work out a way of actually I think putting these programs on the air but actually attracting people to watch them. So we have the block from 4:00 to 6:00 and we are now looking at what we do in early prime between 7:00 and 8:00 with some of that programming.
10171 So we haven't quite figured it out, but we, as you, want to get many, many more young people watching CBC television.
10172 COMMISSIONER CRAM: So you have the programming you just can't put it anywhere?
10173 MR. KLIMKIW: No. We have developed a lot of programming.
10174 COMMISSIONER CRAM: It's in development.
10175 MR. KLIMKIW: Some of it Phyllis has just talked about; other things we are developing. It is just a question of creating the mix.
10176 Now, it was much like your question about how well we are doing in the regions. I mean, it really is a question of a schedule mix that is going to attract as many Canadians as possible.
10177 But we are dedicated, I think as Harold will tell you, to getting more youth programming on the air but really finding a way for those kids to watch our network. I guess that is what we all want.
10178 MS PLATT: Just to add to that, I think it is worth recognizing that kids do watch our network, particularly comedy programming and family programming in the main schedule. If you look back at the last licence period, programs that were in the prime time schedule that attracted youth viewing were fairly significant.
10179 So we are not, I don't think, so worried about having young people watch the CBC. We are concerned about creating targeted programming for them particularly within the afternoon time period. That is why the shows that I mentioned, which are either produced or in production, have been triggered.
10180 COMMISSIONER CRAM: So is it your point that they watch CBC in the 6:00 to 12:00 time slot or the prime time time slot?
10181 MS PLATT: As well as in the afternoon in the block that we have created, yes.
10182 MR. BEATTY: Commissioner, when we were going around visiting with Members of Parliament, with caucuses, to tell them about our strategic plan, one of the Members of Parliament said to me she was visiting one of her friends the other day and that her 11-year old daughter started talking to her about politics. She said, "Do you watch the news?" She said, "No. I watch Royal Canadian Air Farce."
10183 That is what it does. Programs like this have a very broad reach, including the younger children even though they are not specifically designated as children's programs.
10184 COMMISSIONER CRAM: In terms of children, and that is age two to 11 in what I will be talking about now, some of your replication says you have 15 hours, but I added it up to 17 hours a week. Page 30 on the application.
10185 MR. REDEKOPP: That's correct. Fifteen hours Monday to Friday and then two hours on Saturday.
10186 COMMISSIONER CRAM: The Saturday, yes.
10187 In terms of your plans, I didn't quite understand what your plans were for the future.
10188 MS PLATT: We are looking at extended that playground time period.
10189 COMMISSIONER CRAM: The time? Not the range of it but the time of it?
10190 MS PLATT: I'm sorry? By "range" you mean?
10191 COMMISSIONER CRAM: Having different subjects within the block?
10192 MS PLATT: Oh, yes, adding new programming to the block as well.
10193 COMMISSIONER CRAM: When are you looking at doing that?
10194 MS PLATT: Over the period of the next licence, but we think we can extend preschool programming within the first two years.
10195 COMMISSIONER CRAM: And "preschool" is that 9:00 to 12:00 block?
10196 MS PLATT: That's correct. We call it the playground.
10197 COMMISSIONER CRAM: Yes. You would extend it by an hour. Is that what you would do?
10198 MS PLATT: That is what we are looking at. I think Slawko can speak more to that.
10199 MR. KLIMKIW: Right now it actually goes from 8:30 to 11:30. We think we will extend it by a half hour for sure in the next year or so. We are looking very hard at actually having more children's programming on our block, both on the weekends and during the week. We are even looking at the potential of having some in the afternoon.
10200 So we are looking at all of those things because it not only brings young people to the network, kids/young children to the network, it brings a loyalty from their parents. It really serves our mandate exceptionally well and I think we do it better than anyone else.
10201 COMMISSIONER CRAM: Self-serving evidence: I think I'm better than anybody else. I don't -- I may in fact agree with you.
10202 I heard SRC talking last week about having done a survey in terms of children and youth watching TV and about the loss of -- wasn't it that young children watch six hours less a week of television. Have you done any surveys on viewership and trends and what is happening with them?
10203 MS PLATT: We do regular surveys, focus groups, work with children's experts in the field and it is certainly true that youth audience in particular is an audience in transition, particularly because of their use of the Internet, the fact that they are viewing up to older levels and are engaged in a fair amount, as I said, of extensive prime time viewing. So we are looking very carefully at how we can design youth programming to meet the needs of that audience when they are available against the competition that is already in the field.
10204 COMMISSIONER CRAM: You had an intriguing paragraph, 307, in your application -- not that it wasn't all intriguing.
"We see a leadership opportunity for CBC Television in both children's and youth programming. Parents are beginning to rebel against the motivation of merchandising ...." (As read)
10205 It is at page 90:
"Parents are beginning to rebel against the motivation of merchandising now prevalent in children's programs. They are increasingly looking to the public broadcaster for quality children's shows that promote Canadian characters and Canadian values in Canadian settings." (As read)
10206 A couple of questions. Does that mean that the demand for the programming has increased? Have you noticed a demand, an increase in both children and youth programming?
10207 MS PLATT: We have noticed an increase of viewing to our playground certainly. It is up about 16 per cent from the previous year and had been up the year before that as well. We are hearing from parents that they find this to be a safe haven for their kids.
10208 One of the things we have done to try to address that, that interest in preschool programming, is to initiate an outreach program that is quite significant called "Get Set For Life", a partnership with the Get Set For Life Foundation. It has been quite extraordinarily successful.
10209 It involves everything from interstitial programming to a video to community events to information that is given to young mothers in new mother kits and disseminated in a variety of other ways, in soap boxes and that sort of thing as well, because it is a major partnership with other entities.
10210 So, yes, we feel that there is quite an extraordinary interest in and demand for more information about not just what the safe programming for your child might be but also help in raising your child. This was based on very formative research that was done on how young children develop and we were able to do this, as I said, in partnership with a number of other organizations.
10211 COMMISSIONER CRAM: So your market share for playground has gone up. Is that what you are saying?
10212 MS PLATT: That's correct.
10213 COMMISSIONER CRAM: Does this paragraph also mean that youth programming as opposed to children's programming will also be advertisement free?
10214 MS PLATT: The CBC's internal policy for youth programming in that age range is that it can have sponsorship support.
10215 COMMISSIONER CRAM: So there is no advertising in the youth blocks except sponsors?
10216 MS PLATT: If you are talking about that age range that you were mentioning earlier, that's the one I'm --
10217 COMMISSIONER CRAM: The 11 to 17.
10218 MS PLATT: I'm sorry. I thought it was -- I'm thinking of nine to 11. It is my mistake. That's my mistake. That's the one where you can have sponsorship underwriting. The older ages, yes, there is advertising.
10219 COMMISSIONER CRAM: Okay. So 307 doesn't mean that it is -- because you were talking about child and youth programming in an environment free of merchandising doesn't mean that there will be no advertising in the youth block?
10220 MS PLATT: The reference to merchandising is really more addressed to the idea that more and more children's programming is designed with merchandising in mind, you know, the Hasbro toy comes first and then the show comes along. So that is really what we are concerned about.
10221 COMMISSIONER CRAM: As I see your program development expenses there are increments in the years 2000, 2002 and 2006. So clearly that is when you would mean to add the programming to the youth and that extra half hour or hour on playground?
10222 MS PLATT: They are not really connected. Development spending is sometimes cyclical and sometimes meets specific needs and agendas. We always fund our development in quite a significant way for a Canadian broadcaster because we feel that it is really the only way to develop enough programming of quality that will eventually make its way to the schedule.
10223 COMMISSIONER CRAM: But the increases, then, are for the extra two hours in youth and the extra hour in children you are proposing?
10224 MS PLATT: The increases are for everything from an increased emphasis on youth programming, yes, to the new feature film initiative. We are addressing a number of issues on a regular and ongoing basis: children's and youth, arts performance, the things that we highlighted in our opening remarks. So the development is targeted to what our priorities at the time are as well as our ongoing commitments.
10225 COMMISSIONER CRAM: Thank you, Ms Platt.
10226 Now I'm going to go to Mr. Culbert, I think.
10227 News and information. 1987, the Commission spoke about reducing public affairs slightly, in order to diversify. 1991, we had the same concern that CBC would not be dominated by news and information, to the extent that it impinges on balanced programming, and they felt it was inappropriate to add news and information beyond the present level. 1994 said the same thing.
10228 Since that time, though, it's true that news and information programming has actually increased, as a proportion. Is that not correct?
10229 MR. CULBERT: I don't have those numbers myself. I will check if that's the case.
10230 MR. HARRIS: I think the balance of schedules remained largely stable since 1994. There may be an additional half hour of news and current affairs in the schedule, but I think the proportion has remained the same.
10231 COMMISSIONER CRAM: So a slight increase in news and information, overall, but not proportionately. Is that --
10232 MR. HARRIS: Yes. I think what's decreased, largely, is American programming, and that's been largely replaced by under-represented programming.
10233 COMMISSIONER CRAM: You said before, Mr. Culbert, that it is on the grid. News and information is about, you said 42?
10234 MR. CULBERT: 42 per cent is correct, Slawko?
10235 MR. KLIMKIW: Correct.
10236 COMMISSIONER CRAM: And my numbers, in terms of total programming, overall, is news and information is 36 per cent?
10237 MR. CULBERT: That is correct.
10238 COMMISSIONER CRAM: Tell me, is the plan to maintain this approximate level throughout the new term?
10239 MR. CULBERT: I should say, Commissioner, it will be very hard for me to argue to have less news and current affairs on the schedule. That is a constant back-and-forward between the --
10240 COMMISSIONER CRAM: Maybe I should ask somebody else that question.
10241 MR. CULBERT: I was thinking that myself.
10242 MR. REDEKOPP: If I may, I think we should ask Slawko to speak to that; he is the program director. Before you know it, we'll have them all programming the schedule from the back row.
10243 MR. CULBERT: But even us in news and current affairs recognize that it has to be a balanced schedule, and it's a constant source of, each season, sort of looking at what's coming on stream. Sometimes it depends on how successful a development program has been and maybe -- I have been in the position of argued forcefully for another program because we thought we had something good to put on the schedule. So it's sort of an annual debate; it begins about Christmas and ends about June.
10244 COMMISSIONER CRAM: But it's not your decision.
10245 It's your's, Mr. Klimkiw?
10246 MR. KLIMKIW: Well, when they let me make it.
10247 MR. KLIMKIW: Now you know a little bit about my life. It's a rigorous debate about the mix of the schedule.
10248 I think Michael was right. I mean we went out of our way to, obviously, replace American simulcast. Information has stayed about the same, for a couple of reasons: One is, we created some new documentary programs which we thought were important; two, in terms of keeping the balance cost of the schedule, you simply have to balance things off, in terms of costs, the amount things cost, between, you know, drama, information programs, acquisitions and other things.
10249 So, as I said earlier, as we tried to build a well-balanced schedule that would attract as many Canadians as possible to watch Canadian shows, we had to do it with what we could afford. I think this schedule, in my view, is well-balanced, but it also reflects both the economic and mix reality that we are tried to deal with on a daily basis.
10250 COMMISSIONER CRAM: Have you any statistics, log statistics, on the percentage of news and information in prime, over the whole year? Because we have the grid, and I know it's 42-43 per cent, but come prime time, in May and June, or April and May, there's barely time for three sentences of news and then it's on to something else.
10251 Do you actually have any number, based on the logs?
10252 MR. KLIMKIW: Michael, you might answer that. Although I think there's more than three words used during the hockey but...
10253 MR. HARRIS: You are looking for the full fiscal year percentage of the news and current affairs as the prime time schedule?
10254 COMMISSIONER CRAM: Yes.
10255 MR. HARRIS: I believe that's the -- Christine should answer this with more authority.
10256 MS WILSON: Well, perhaps less authority because I will find the numbers for you but I don't have them at my fingertips. Thank you.
10257 COMMISSIONER CRAM: So if I have it correct, you are not going to go any higher in news and information programming -- at least you don't plan to now. Is that correct?
10258 MR. REDEKOPP: Well, Commissioner Cram, perhaps we had better identify our terms a little more precisely because in the calculation of current affairs, we have included programs such a "Life and Times", which is a biography series.
10259 Now, I think that if we were to break this out another way perhaps it would look a little different so. I'm not quite sure how we should proceed with this. I think what we have taken is the programs that fall underneath the department called News and Current Affairs and have, in fact, given that a percentage. But if you look at the kinds of types of programs that fall in that department, some of them may -- they are more about storytelling than they are about straight news.
10260 MR. KLIMKIW: If I could add something to that. We are, obviously, respectful of what our conditions are and what our expectations are. But when we put "Life and Times" together, we did it because all of us in English television and Pierre and others thought a public broadcaster ought to have a documentary program that celebrates the infamous, the famous, great Canadians, less great Canadians, but something that celebrates those achievements on CBC Television. That's what drove us to do that. So, we, at that time, weren't looking at the issue of balance; we were looking, in some ways, at the issue of responsibility and what we thought was a responsible program, and I think a very good program, that should be on CBC T.V.
10261 COMMISSIONER CRAM: Is news profitable?
10262 MR. REDEKOPP: No.
10263 COMMISSIONER CRAM: Is information programming profitable?
10264 MR. REDEKOPP: Well, I mean if we are talking about do we make a profit on our programming in news and current, I would say that we -- first of all, we don't set out to make a profit. But, no, it isn't profitable for us.
10265 COMMISSIONER CRAM: The information programming? Like I broke it into news and information programming.
10266 MR. REDEKOPP: I believe that's correct.
10267 COMMISSIONER CRAM: In terms of where you are at, now, do you believe that it is appropriate to maintain this level of news and information if there's an imbalance in the other genres as, say, in prime time?
10268 MR. KLIMKIW: I think that part of the -- to be quite honest with you, part of the decision here is partly managing the balance in genres. It's also managing what we can afford. We have those responsibilities, along with the program and cultural responsibilities we have.
10269 This schedule, right now, the way it's mixed and the way we cost it, we can afford, and it's meeting our public policy goals, it seems to me, and it's meeting our cultural goals, so, obviously, I don't want to commit to doing less or more of any of these genres. But this year, for instance, we did take a half hour of information programming off the prime time schedule. The "Health Show" is not on that schedule -- and we did that because Mr. Culbert and his colleagues said, "Look we can reflect health issues in several other shows". So we did do that.
10270 So it's an ongoing discussion about mix and about the character of what English television schedules should feel like and look like.
10271 COMMISSIONER CRAM: For the purposes of this discussion, I will call you the main channel.
10272 What's the impact of Newsworld on the main channel, in terms of is there a higher availability of news and information coming from Newsworld so you can program on the main channel -- use the Newsworld information on the main channel?
10273 MR. CULBERT: "No" is my answer. Newsworld creates its own programming for the Newsworld channel. All the news and current affairs programs on the main channel are used by units that are in news and current affairs and there is no news and current affairs programming created on Newsworld for the main channel except, I guess, the long-standing arrangement for the morning news which is produced.
10274 MR. KLIMKIW: If I could add to that. If we do find a program -- if a program finds its way on the main channel from Newsworld, we acquire it.
10275 COMMISSIONER CRAM: You would buy it from them?
10276 MR. KLIMKIW: That's right.
10277 COMMISSIONER CRAM: Drama -- and I'll say it -- a success. So I'm not being totally negative here. A success both as to the expectations, success of the drama itself and of its audience. I wonder, though, if the success was an issue of perception, as opposed to anything else. And, Mr. Redekopp, you said, on Tuesday, that Canadianization was proof that commercial imperatives were second. I wonder if it's that we all underestimate the demand for Canadian product and underestimate the quality of Canadian product.
10278 MR. REDEKOPP: I think the person who should speak to that is Slawko. I think that going into this process there were risks and there were fears that there would be a bigger audience loss than there was -- and, in fact, we are all delighted with the kind of response that we have to our Canadian program, but let Slawko speak more specifically.
10279 MR. KLIMKIW: I will start this and my friend Phyllis Platt will finish it, I think.
10280 Let me just say this, that I think that if there's a holy crusade at the CBC -- we have had many of them over the years -- but if we have one now, it's to get more and more Canadians to watch our prime time schedule, and to especially watch our drama. But I don't think it's an easy task.
10281 I think that there are, as you know, enormous cultural reasons why people watch American drama and American sitcoms. So, between us independent producers, the industry in general, not only the CBC, I think our task is to get more and more people to watch those programs. So when I see the success of "DaVinci's Inquest" -- which is a real success, as is "Cowboy", as is a variety of other shows -- that is an enormous amount of work. It's an enormous amount of work on the creative side, which has taken years and year. It is an enormous amount of promotional dollars because, as the world fragments, you have to spend a lot more to promote those shows so people are ostensibly going to know about them and then find them in their living rooms. I think it's a very, very long and hard cultural fight because there's such an enormous habit, in this country, of watching American television. So we are all very proud of that. I think those programs will get more and more viewers as we promote them well and schedule them well. I think what you are also seeing is a critical mess that's developing that's producing, you know, obviously, a bias, but I think some of the finest programs you are going to find in North America to be in this country -- and I will let Phyllis talk a little about that. But my sense is it's been a great success, but it is a daily struggle.
10282 MS PLATT: I think the answer to your question is probably, yes, that there was a higher demand and that having quality drama to watch has led Canadians, in significant numbers, to Canadian drama and you don't hear that old refrain much any more of, "Oh, it's a Canadian show". That's a huge -- that's a see/change. I think it's a result of several things. One is, as I mentioned earlier, certainly the maturation of the independent productions sector over the last five years, 10 years, even five, there's just been, I think, again, a sense of critical mass building, expertise, developing sensibility that's resulted in some very high-quality programming. The Canadian Television Fund has given a huge boost to that, as well; with that amount of new money coming into the system, you have the money to make the shows. It's very expensive, as of course you know, to make high-quality drama, and to get it right, you really do need the bucks.
10283 You also, though, I would suggest, need the creative development process that the CBC puts a huge amount of effort into. There is a very strong department -- we have two drama departments -- one is dramatic series, one is movies and mini series and soon-to-be features -- where there is a very collaborative and close connection between our departments and the independent production sector and I think that mix has led to stronger and stronger and better and better shows and we are very proud, obviously, of what has come of that.
10284 COMMISSIONER CRAM: 8.5 hours in 1998-99 per week and I understand we all agree with that. The long-term you say depends on the CTF and you then said you would have a clearer idea now as to what maybe happening in terms of the CTF.
10285 MS PLATT: There are two significant Board meetings of the CTF coming up: One at Banff in June and the second in the middle of July.
10286 I think it is not that clear, frankly, it will become clear, I suspect, going through those two board meetings where the results of the last round will be discussed by the Board and there will be and active discussion about the impact of the removal of the CBC's guaranteed access.
10287 The CBC has prepared a position paper to go forward to that Board meeting that tries to examine the impact of that change on the industry on as a whole, not just on the CBC. So, unfortunately, we are not really in a position to tell you a great deal at this stage but by mid-July those two meetings will have been held and I think we will have quite a clear picture.
10288 COMMISSIONER CRAM: If I understand this correctly, when you had the guarantee CBC never really applied for the entirety of the guarantee anyway. Is that correct?
10289 MS PLATT: Not quite. When the Fund was created we had a first year -- because it started in September and it was late in the cycle -- where we were allowed to use a percentage of our LFP side money to access the Fund as a whole and we actually accessed, over the three-year period, an amount that reflected that upfront investment, if I can put it that way.
10290 The second year our access to the LFP was down because of that cash infusion in the first year. Over the three-year period we accessed our full amount of the Téléfilm side of the envelope and in the third year of the Fund, the LFP side was capped for the CBC at 38 per cent. So we have actually managed the Fund and our access to the Fund -- if I can put it this way -- quite aggressively because we felt that we really did need to maximize the use of taxpayers' dollars to try to create more Canadian programming and I think the success of that has been, again, significant because we accessed a bit less than 50 per cent and that has resulted in something like 65 per cent of the viewing to Canadian programming on Canadian television of Fund- supported projects.
10291 COMMISSIONER CRAM: If I understand correctly, in 98-99 you received $60 million from the Fund, I think, as total? The two, the license and the equity one?
10292 MS PLATT: It sounds about right. I would have to check my numbers.
10293 COMMISSIONER CRAM: Is that about the average of what you have received over the years?
10294 MS PLATT: In the third year there was a borrow forward because of the Fund kind of blowing up, so I would have to look at the numbers in more detail before I give you an answer on that, if I could?
10295 COMMISSIONER CRAM: So then it was lower, essentially lower than your average, it would have been around 50, or lower than 60 in any event. Is that what you are saying?
10296 MS PLATT: No actually, because of the borrow forward the amount of money we took out of the Fund was at around the 50 per cent level but the borrow forward changed our percentage because money was taken from the next year to cover off the problem in that year so it looked as if our percentage was lower, but we actually, if you were looking at cash in the terms of the pre blow-up access to close to 50 per cent. I know that is very eye-glazing, too complicated.
10297 COMMISSIONER CRAM: Can you actually just provide us with the numbers?
10298 MS PLATT: Sure.
10299 COMMISSIONER CRAM: I guess my issue then is if you retained about the same as the average amount you had received from the CTF, would you say, as you said today, that very little would change in terms of programming?
10300 MS PLATT: If we were able to carry on with the level of access we have had, I think there is no question we can stay at the level we are currently at in terms of performance and we are hoping to be able to do that. We are prepared to complete, as I said in the opening remarks, on a level playing field.
10301 We have some concerns about the instability that the loss of the guarantee will create and it is difficult for us to tell at this point what the impact of that instability will be.
10302 COMMISSIONER CRAM: The issue, yes. You said in your deficiency responses, in paragraphs 8 and 9 that what you have given us in the application is a conservative estimate and that there would have to be a substantial reduction to threaten the commitments.
10303 What is substantial?
10304 MS PLATT: I think the question that you are looking at is the minimum commitments. Substantial would really have to be us down I would say half the level we are currently at or in the total takeout of the Fund, 30 to 40 per cent level rather than at 40 or 50. So it is that kind of range. But again it is a little bit difficult to give you a precise answer until we have a sense of all the turns and roundabouts. The Fund is a complicated beast and the rules have changed every year so it is kind of hard to predict.
10305 COMMISSIONER CRAM: So do I understand you correctly then that if retained about the same amount as you have been from the Fund you would be able to continue with 8.5 hours per week drama? Is that the issue?
10306 MS PLATT: We would certainly be able to continue at that level. There could be some shifts within the genres that we access -- or that we create out of the assistance from the Fund -- and that is really a question of what are the priorities of the day and we talked about youth programming a fair amount and there are a lot of very strong youth production partners out there that we would like to do business with and the question of how we meet that commitment. Maybe one will want to use the Fund to address to a larger degree than we currently are.
10307 COMMISSIONER CRAM: So will we ever get up to ten hours a week in the long-term commitment, the long-term expectations?
10308 MS PLATT: Well, I think I will pass this to Slawko in a second but my sense would be that ten hours is really a question of what that means to the balance of the schedule and whether that creates the best schedule for Canadians because there are other issues that we need to address -- performing arts --
10309 THE CHAIRPERSON: Do you want to break and we will pursue tomorrow morning?
10310 COMMISSIONER CRAM: Yes.
10311 THE CHAIRPERSON: That would give you a rest.
10312 COMMISSIONER CRAM: That is a good suggestion.
10313 THE CHAIRPERSON: And probably for you also to take a pause here and rest for tonight and we will start again tomorrow at 9:00.
10314 Thank you very much and we will see you in the morning.
--- Whereupon the hearing adjourned at 1815, to resume
on Tuesday, June 1, 1999 at 0900 / L'audience est
ajournée à 1815, pour reprendre le mardi
1er juin 1999 à 0900