CHPC Committee Meeting

     Good morning, everyone. I'd like to call this meeting to order, please.

    This is the 39th meeting of the Standing Committee on Canadian Heritage. Pursuant to Standing Orders 110 and 111, we are dealing with the order-in-council appointment of Konrad von Finckenstein to the position of chairperson of the Canadian Radio-television and Telecommunications Commission, referred to the committee on February 22, 2007.

    I welcome Mr. von Finckenstein here this morning.

    Before we take your presentation, sir, and the questioning, I would just like to remind the committee of our House of Commons procedure and practice when we interview a candidate such as Mr. von Finckenstein:

    With that, Mr. von Finckenstein, you have the floor, sir.

    Thank you, Mr. Chairman.

    Good morning Mr. Chairman and members of the committee.

    It is pleasure to be here today to talk about my appointment as Chairman of the Canadian Radio-television and Telecommunications Commission.

    When we appeared before you last week, we jumped right into the issues surrounding the Canadian Television Fund and so I did not have an opportunity to properly introduce myself.

    I was born and raised in Germany and came to Canada when I was 17. I have a bachelor of arts from Carleton University and a bachelor of laws from Queen's University. I joined the public service in 1973 and since then I have had a number of positions in the public service. In 2003 I was appointed a justice of the Federal Court of Canada, a position I resigned to take this position.

    On the Federal Court, I heard many interesting legal disputes involving various industries and areas. I handed down decisions on cases involving immigration and refugee law, intellectual property, particularly copyright, private law and administrative law.

    Before that, I had the privilege of serving as Commissioner of Competition and head of the Competition Bureau for a period of seven years. During that time, I was responsible for the enforcement of the Competition Act, as well as championing the promotion of competition in every field of policy-making. This involved, among other things, reviewing proposed mergers between companies, including banks, airlines, and broadcasting companies; and investigating allegations of anti-competitive behaviour, such as price-fixing and deceptive marketing practices.

    The Competition Bureau and the CRTC have a history of working together, given that their roles in certain areas are complementary. For instance, the bureau is a frequent intervenor before the CRTC on matters related to competition, and both organizations have the authority to review and approve certain transactions. In fact, during my term as Commissioner of Competition, an interface agreement was drafted to clarify the organization's respective areas of responsibility.

    My predecessor, Françoise Bertrand, and I both got involved personally in the interface agreement and are very proud that we managed to lay down the lines of interacting with each other. Some parallels can be drawn between my role and my past experience as a judge and the Commissioner of Competition. The common thread is the importance of maintaining impartiality and objectivity in seeking out the information required to make good decisions.

    I have also had the opportunity to be involved in some challenges facing our country from an international perspective. A few years ago, for example, there was a need identified by organizations that we had to bring the competition regimes around the world together. Competition is a bit of the flavour of the day, and there was a danger that everybody was going a different way.

    We have created something called the International Competition Network, which brought all the competition agencies and the practitioners from the world together to have the best minds in public and private employed in competition in laying out how competition regimes should perform and on what principles it should work. I had the privilege of being the chairman of that network. It's now in its seventh year. It's holding its conference in Russia this year.

    I hope that this brief outline of my qualifications has provided you with a good idea of my experience and depth of expertise in commercial and competition law, both in a national and international context. I have been proud to serve Canadians in my various capacities, and I'm honoured to have been appointed as Chairman of the CRTC at such an important moment in its history.

     I trust my comments have been useful. I will be pleased to answer any questions you have.

    Thank you, sir.

    Mr. Scott.

    Thank you very much.

    Welcome back.

    Thank you.

    My questions will be limited to any sense of previous position. I ask these questions respectfully; I think that's the purpose of this exercise, and I think it's a healthy one.

    During the course of the discussions we had earlier this week, one sentence in the text--I mentioned it in the questioning at that time--said that Shaw and Vidéotron had expressed some concerns about the operation of the television fund, and that those had not been addressed. I took that to be a bit of a statement of predisposition, because if the television fund people had been here I'm sure they would have said those concerns were addressed--and others weighed in as well.

    Again I do this very respectfully. You see the need for complete objectivity--you said that here and you said that then. There are some pretty fundamental questions here about the fact that in Canada we invest in a private broadcaster, the relationship with American broadcasters, how we have to protect our cultural sovereignty, and all of those questions. How would you respond to a question of your predisposition on those kinds of issues? That would be of concern to us. I would welcome reassurance.

    As you know, I'm a lawyer and a former judge. I approach these things through that prism.

    First of all, what is my mandate, the objectives of this job? The mandate is clearly laid down in the two key acts: the Broadcasting Act and the Telecommunications Act. Of course there's the CRTC Act for the governance of the organization and such. They are clear. If it's broadcasting, which is what you're talking about now, the objectives are clearly laid out. My job is to make sure we attain those objectives through the tools given by that job.

    Of course, we can't act in isolation. We have to take into account the industry reality that people in this industry expect to get a return on their money. While we regulate--and that's the objective--we also live in a free-market economy. We want to make sure that market forces, to the extent they are helpful, can be deployed to their fullest, because that's the best way we have for creating wealth and opportunity and having an expanding economy.

    But clearly the overriding objective is set out in the Broadcasting Act. It is to make sure that we have Canadian content, that the broadcasting system reflects Canadian society and Canadian values, and that Canadians see themselves reflected in the broadcasting offered to them. So those are the things we balance in trying to come up with the appropriate mix.

    As a national body mandated by Parliament and representing public interest, you would be aware of the fact that there are those of us who were concerned about the decision you announced earlier this week that the task force work would be done privately; that the report would be public but the exercise would be private. Can you explain your decision in that regard and how you square that with the obvious public interest this exercise speaks to?

     Yes, with pleasure.

    There are all sorts of assertions and allegations about the CTF, how it functions and what it does and doesn't do. The first thing is, let's have the facts. Let's find out what the facts are and have people speak to us in the comfort of confidentiality so that they can point out what their concerns are without the fear of reprisals or adverse consequences. That's why I said let's have a task force, headed by my colleague, Michel Arpin. Let's find out what the facts are.

    I mentioned to you or in response to a question from one of your colleagues that if you are a producer and you are funded by the fund, and then you sell your product to the BDUs or to the broadcasters, you'd be very careful what you say in public, because these are the very people who control your life as to you being funded or who will buy your product, and so on. However, if you really have serious concerns with the fund, hopefully you will lay them out to Michel. Michel then will gather all these facts and make a report saying these are the facts.

    It seems to me these are some of the possible solutions. Or maybe there actually is a consensus. Wonderful. If not, these are possible options.

    At that point in time, having the facts as he found them on the table, we will make the report public. You will probably summon Michel and me to come here and explain the report, and then we have to decide what is the best way of going forward. But first of all, I need a factual base. At this point in time, we have nothing but a whole set of assertions and allegations. I lack the factual background, the factual documentation in order to even attempt to find out how to solve this issue. As I say, it may very well be that there's a lot of common ground that gets lost in the exchange of recriminations and allegations and so on.

    My time is up.

    Monsieur Crête.

    Thank you, Mr. Chairman.

    Good morning Mr. von Finckenstein. I am delighted to see you again, in these different circumstances.

    In your written statement, you say that you are honoured to have been appointed as Chairman of the CRTC at such an important moment in its history. Indeed, the Minister of Industry has just issued an order concerning local telephone. He has also criticized how the CRTC operates.

    I would like to know how you intend to deal with the minister's most recent announcement of this measure which will come into effect in April, if the minister maintains his position.

    As you know, certain provisions in the Telecommunications Act allow the minister to issue orders. They must be general orders. They must be tabled at this committee and publicly debated. They can then be amended or left as is.

    Under the current system, the CRTC acts as an independent organization and carries out daily work concerning telecommunications. In the context of the government's general direction, Minister Bernier can decide to igive us orders. Once consultations have been concluded, the decision is final and we must comply with the orders. We are given broad instructions and use these as our framework. It is within this specific framework that we make specific decisions on a case-by-case basis.

    Under the act, your responsibility is to make sure that in the absence of true competition, the regulation must be applied in order to establish a truly competitive environment.

    However, the minister believes that the CRTC is not on the right path, and he wants to see it follow a specific direction. How are you going to deal with this? Is there a difference between what you are currently having to face and what you did face when you were Commissioner of the Competition Bureau?

    Pardon me, can you please repeat the last part of your question?

    We spoke about the need to allow for real competition in these markets. In this sense, is there a difference between your former role as Commissioner of the Competition Bureau and your role as Chairman of the CRTC?

    As Commissioner of the Competition Bureau, I was the champion of competition. I looked at everything from a competitive point of view. My role was to spear competition, whereas my role as Chairman of the CRTC is to administer telecommunication systems and to develop regulations. One of our main objectives is to deregulate to the furthest extent possible. In the area of telecommunications, we must make sure that there is access, and interconnection. I do not see any contradiction between these two roles.

    If the minister maintains his order on local telephony, what do you have to do to make sure that it is applied?

    This is a matter of policy. There is no wrong or right way of moving ahead. It is a matter of degree.

    The minister has chosen an approach that is slightly different from that of the Commission, and this is his right. If you approve this order, the decision will be final. The decision, for us, becomes a guideline. The one we are currently following is slightly different, but nobody really knows which of the two is the better one. For our superiors, the goal is to deregulate the sector as much as possible.

    Are you under the impression that your role as Chairman of the CRTC will get you to look at how the market will react following the minister's order?

    We are going to enforce this order, because it is holistic in nature. Naturally, we enjoy some leeway in interpreting the order. Regardless, we are going to move to implement the order in accordance with what it clearly states.

    If the order is implemented, do you believe that the CRTC would have the mandate to comment on the repercussions of its implementation one year later?

    You're asking me to predict what will happen, which is always a bit dangerous. If, in one year, we see that the order, and the way it has been interpreted, are not working and go against the general policy, we will attempt to find ways to avoid the adverse consequences.

    Your time is up.

    Mr. Angus.

    Thank you, Mr. Chair.

    Thank you for coming back, Mr. von Finckenstein. We're feeling like old friends here; we keep meeting like this.

    I'd like to follow up on our discussion of the other day on the whole role of moving forward on closed-door meetings. We've already discussed the CTF, so I'm not going to go there, but I'm interested in the role of the CRTC and how it accomplishes its stated goal, which I found under “Accomplishments 2005-2006” on its website. It said the commission processes are “fair, transparent, and effective.” Yet since 2003 the CRTC has made at least 90 decisions involving transfers of ownership that have had no public process whatsoever, no publication, no gazetting, no intervention process.

    In order for justice to be seen to be done, I'd like to get your perspective on how we ensure transparency and openness when there's a major amount of change being made apparently behind closed doors.

    Mr. Angus, you caught me by surprise. I don't know what dates you're quoting, what cases are involved, etc. If you want me to, I can gladly give you, in writing, chapter and verse on each one of these cases. As you know, this is my first week in the job, and you are quoting from a report for the last year when I wasn't there. You're suggesting—and I don't know whether it's right or wrong, I don't know what the report said—that we had transfers of ownership in secret, without hearings. I just don't know anything about it, so I cannot answer that question.

    I will give you an example and get you to comment on how you might move forward on these.

    In 2005 the CRTC let one station pick up assets from four other companies in B.C. That involved a transfer of about 18 stations. Then four months later they allowed another company to pick up 11 stations. So within a four-month period, one-third of the stations in British Columbia changed ownership. That also really increased the media concentration in the British Columbia market.

    You were not there at the time, but--

     No, but you're making the suggestion that we didn't follow due process.

    No, I have not made my suggestion.

    I'm sorry; my apologies.

    My suggestion is that.... We're seeing major amounts of media concentration. As I said, these have taken place without much public comment. So I'm asking you now, as chair: what is your position on the clear growth of media concentration that's happening, and what is the CRTC's role in dealing with these kinds of major mergers that are taking place?

    Media concentration is obviously a concern. Diversity of voices is one of the things we have to encourage as part of our mandate under the Competition Act.

    You are looking at the one side, which is the concentration of media. We also, at the same time, have an explosion of fora in which you can express your views. When you look at whether major radio stations combine or not, and at whether this restricts the diversity of voices, you have to take into account at the same time that there are new avenues—I don't have to say the Internet, but blogs, and all of those—whereby people can express their views and communicate, and they do. We also look at the economics; we look at the market, etc.

     In the decision we make on whether to approve, clearly one of the ingredients is diversity of voices. It's not the only consideration, but it's a very key and important one.

    If we were still in the yesteryear, where we had very few outlets of communication for our voices, this would be a great concern. In our multi-platform world, this concern has to be looked at in that context. Therefore, what may at first blush sometimes appear to be a dangerous concentration does not on closer examination so appear, when you consider all the alternatives.

    I'm just speaking generically. I'm not speaking about your specific case.

    But respectfully, my children can go onto YouTube, but I don't think that's in the same realm as the kinds of mega-mergers we're seeing in television. The fact that my kids can post something on YouTube doesn't provide diversity of voices.

    What I'd like to put to you is that what we're seeing in the CRTC, in a lot of these decisions that have been made, is families transferring assets among themselves. We have a few dynastic families who are basically controlling media in this country.

    If Parliament had decided that it was good news just to have two or three families controlling all the media in this country, they wouldn't have created the CRTC; there wouldn't be a need. The CRTC has a mandate to ensure that the best people and the best projects are picked for controlling licences; yet that doesn't seem to be happening.

    In light of the massive media mergers that are taking place, the dynastic control of a few families—and YouTube and MySpace aside—what role do you see for ensuring diversity of voices within the broadcast industry today?

    Any merger goes to a dual examination. First of all, you have to get it past the Competition Act: that it doesn't lead to a lessening of competition. The Competition Bureau basically looks at the market. For the market, they look at it as advertising: does it really restrict the ability to advertise? Or does it let people control the market?

    We then look at the other part. We look at it from the broadcasting viewpoint and the objectives of the Broadcasting Act. Are the objectives of the Broadcasting Act, which are numerous—it's a long list—going to be imperilled by this merger, or put in danger?

     One of the objectives, clearly, is diversity of voices. Another one is the offering of Canadian content. Another one is vitality of the industry, etc. It's not just diversity as the only one and the overriding objective. There's a whole bunch of them, and we have to strike the appropriate balance.

    Thank you.

    Mr. Abbott.

    Thank you for coming, Mr. von Finckenstein.

    I thought that some of the testimony related to the CRTC last week was really quite instructive and quite helpful, particularly for this hearing. If we could move some of your comments from that, in another forum, to this one....

    Mr. Angus and I have had a respectful dialogue, sometimes a difference of opinion, over the role of the CRTC, the CRTC commissioner, the government, and the minister. At the meeting last week, you very clearly enunciated that. It might be helpful to bring your testimony from that meeting into this meeting, as it is part of your having....

    I'm trying to give you an opportunity to establish your own standard, so to speak, so that we as parliamentarians will be able to measure your performance against your own stated standard.

     At the CRTC we regulate according to the mandate given us by statute. That mandate requires an awful lot of discretion and judgment, because it is really stated in principles rather than in specific tasks what to do or what not to do. We're basically told to do whatever is necessary to achieve the objectives. We have various tools. One of them is licensing, if you're talking about broadcasting, but it's not the only tool.

    Secondly, we are a collective. As you know, there are eleven commissioners right now. We make the decisions through due process, by which we ask people to make applications. They make some public notices. There are interventions. We then decide whether to hear them. If there are sufficient interventions and controversy, that requires a public hearing. When it's a relatively straightforward one, we have a paper hearing to deal with it. Then we publish our decisions and explain them. We're trying to follow that.

    I had the opportunity last week to speak before the Canadian Film and Television Production Association, where I was basically asked the same thing. I said to them that as a regulator I really have four principles under which I operate. I did that as the competition commissioner, I will do that here, and my staff will follow those principles.

    The first one is transparency. Everybody should know what we are doing, what our process is, how we come to decisions, and how they can interact with us.

     The second one is fairness. What we are really being asked to do is choose between competing interests, and to do it in such a way as to attain the objectives of the Telecommunications Act or the Broadcasting Act, whichever it may be.

    The third one is predictability. You can't have a regulator that goes all over the place. There have to be clear principles that you follow and apply from case to case. If you depart from them, you owe it to the people you are regulating to explain what it was in the economy or in this particular situation that caused you to depart from your stated principles; to what extent it was an isolated case; or whether you have, in effect, switched direction.

    Finally is timeliness. In a bureaucracy, time is an ever-expanding quality and you can take as much time as you need to get it right. But of course in industry it's just the opposite: time means money and opportunity cost. Therefore as administrators it behoves us to make our decisions as quickly as possible, while still acting in a responsible manner.

    That's how I intend to run the CRTC. Hopefully we'll make it clear to the industry what we do, how we do it, and why we do it.

    How do you see your relationship, as the chair of the CRTC, with the government and the minister of the day? I'm not speaking about the current minister.

    As you know, the CRTC is an independent body that makes judgments on the basis of what we see as best.

    Both ministers of heritage and industry have the power under the respective acts to give us directions. But the directions have to be public, they have to be debated, and they have to be tabled for the most part. But clearly, when they do that we will abide by them, as was the question from Mr. Crête.

    Over and above that, an independent regulator administers in the forum set out in the legislation, and obviously there has to be contact with the minister. I do an annual report for the minister. She presents it to the House of Commons and tables it, because I have no means of tabling it.

    I think it's necessary that I understand her goals and aspirations and where they're going, just as she understands mine. I don't try to influence her and she doesn't influence me. But given the different mandates and policies, it makes sense that the two of us go in the same direction. I don't see any benefit in us going in opposite directions.

     We both have the same idea in mind here. We talked about broadcasting of Canadian content, telecom, and trying to make sure we have an efficient, modern, competitive system, to the extent that's possible.

    That's how I intend to administer this organization.

    Thank you.

    Thank you very much.

    Ms. Keeper.

     Thank you.

    Thank you, Mr. von Finckenstein.

    I would like to ask you about the new world of new media. I know that this was a concern that was raised as we moved through the past weeks in terms of the concerns of Vidéotron. One of the things I personally feel concerned about is that it is a new world. I feel like we're on a frontier in terms of government role in terms of this new frontier, and I know you've mentioned it a number of times, talking about new media, multi-platform.

    The CRTC did release a report in December 2006 about this issue, “The Future Environment Facing the Canadian Broadcasting System”, around new media. The past CRTC chairmen had indicated that they didn't feel that there were regulations needed yet—quite yet. I would like to ask your position about new media and the role of the CRTC.

    This is clearly the challenge of the day, I think you're absolutely right. There are very much divided ideas as to how quickly this new media will come on, and to what extent it will displace or undermine or bypass the existing structure. So we really have the chance of, number one, administering our existing system, which has been a great success and we have a vibrant industry, on the one hand, but at the same time keeping in mind that technology is creating this new media, these alternate platforms, which have the possibility, the potential, of completely technologically bypassing the regulatory system that we have. Is it going to be a reality, and when will it be?

     Secondly, so far we have taken a hands-off position and said we are not going to try to regulate new media, and, new media is essentially just an alternate platform. As it develops, as it becomes more and more powerful, there will be a question whether we have to re-examine that position or not, and, if so, can you actually impose some sort of regulation? What kind of regulation would it be? Would it be what we do right now, or do you have to do it quite differently? And most importantly, can you actually enforce it? There's no sense in setting up a regulatory scheme if you can't enforce it.

    I don't know the answers to that. I'm acutely aware of it. The report we made for the minister, and which was tabled last December, which you referred to, was basically a snapshot of the situation as it is right now, but as we know, it's not stable; it's evolving. It's evolving very fast, etc.

    One of the other things that I have said publicly, and will repeat here, is we have to get our head around the new media, we have to understand, we have to make educated guesses as to where we think it's going, what form it will take, and also how we use that media in order to live up to our central mandate, which is to make sure that there's Canadian content in the broadcasting world, in the new media, so that Canadians have the opportunity to see it, and so that we don't get lost in this new media world, so that Canada has its appropriate place.

    This is talking at 10,000 feet, I know that. I'm doing it because I don't know any better. But we are studying it, we are working on it, and I think this is going to be the key challenge.

    Thank you.

    I thought that it wold be clearly one of the most significant challenges of a new CRTC chair.

    It's a daunting challenge.

    Yes, it is. I agree.

    I would just ask one more quick question, and that would be about foreign ownership, in terms of the competitive world of broadcasters. Could you just give me some reflection, in terms of foreign ownership and the CRTC's role in terms of ensuring Canadian ownership of broadcasters?

    The last word was “broadcasters”?

    Yes.

    Yes, okay.

    Canadian ownership is clearly a very important key to Canadian culture, communications, etc. I was before this committee at one point in time as Commissioner of Competition and I talked about Canadian ownership. At that point in time, I talked about the transportation of signal, and I suggested if we wanted to loosen the Canadian ownership rules you could do it where you talk purely transportation of signal. Whether the signal is a broadcasting signal or a telecom signal, to the carrier it makes no difference, he just wants to carry as many signals as possible.

    Therefore, in terms of ownership, I think the considerations are quite different when you talk about telecom from when you talk about broadcasting. It is our mandate at the CRTC, which is clearly on the broadcasting side, to ensure Canadian content. I don't see how you can foster Canadian content and have it part of your DNA if you're not Canadian. I just don't see that. I think the broadcasting industry and the Canadian ownership is absolute. But if you did separate totally telecom from broadcasting and just talked about carriage of signal, I don't see why you couldn't loosen the rules and ensure a greater access to foreign capital.

     That's not part of my mandate, I understand, but the researchers have done some research. I made those statements previously, and I have not departed from those. They are very much restricted to the carriage of signal.

     Thank you.

    Mr. Kotto, try to be as brief as you can.

    I will ask very short questions and I expect to also get short answers. My questions are in the same vein.

    Do you care about Quebec and Canadian cultural sovereignty?

    Absolutely.

    It makes up a significant portion of your mandate.

    As my colleague Mr. Crête reminded us, we have noted that the Minister of Industry wished to significantly deregulate the telecommunications sector. We have met with industry and broadcasting players who are also calling for a similar deregulation.

    Do you acknowledge that the broadcasting and telecommunications sectors are increasingly interrelated? Do you believe that we should consider this aspect when it comes to regulating these two sectors?

    You are right: they are the products of the regulatory structure currently in place. If the system becomes different for signal transmission and broadcasting, I am certain that the industry will undergo restructuring to adapt to the new structure.

    The trend we are currently observing is the opposite. As you are saying, content and signals are converging. In these conditions, there has to be a uniform regulatory system, and priority will be placed on protecting Canadian culture and content.

    Do you advocate neutrality of the Internet?

    Firstly, you have to tell me what you mean by neutrality. This term is used by people often, but its meaning varies widely.

    As far as we are concerned, it is a matter of determining whether or not we should regulate, or allow for free market forces to reign, as though in a jungle. And in this jungle, we are but small players.

    That is too categorical. I do not question whether or not this is a good thing, but rather if this order fits in with our mandate. This is a statutory responsibility. I must make sure that it is fulfilled. If that is how I decide to deal with the issue, I must do so from the perspective of my mandate. With respect to Internet neutrality, we have to determine if such measures are needed, and if this is the case, decide how to proceed.

    I cannot answer your question in a general way. Give me a specific example as it relates to my mandate and I'll be able to answer you. It is useless to give you an answer now, because I do not know what all this will involve.

    I was talking about that in terms of a new platform.

    Yes, I know.

    Thank you very much.

    Mr. Fast, last question, please.

    Thank you, Mr. Chair.

    I'd like to look forward a little bit and anticipate what this committee might be working on in the future. As you know, this committee hasn't dealt with any legislation over the past year and a little bit. However, we expect that in the near future we'll be receiving some copyright legislation. Now it will be both the Minister of Canadian Heritage as well as the Minister of Industry who will be involved in that process. I was intrigued by the comments you made in your introduction that in your role as a federal judge you had actually addressed the issue of copyright and patent on a regular basis. Ms. Keeper had already referred to new media as being a huge challenge in the future. Obviously, new media has an impact also on the whole issue of copyright, new ways of marketing content, new ways of monetizing content.

    Do you expect that the CRTC, and you in particular, will play a significant role in addressing many of the issues that are raised by what we anticipate will be copyright legislation?

     No, I think we will have a subsidiary role, but clearly the key role is with the Department of Heritage and the Department of Industry.

     It's a fascinating issue. I was involved in copyright in various stages of my career. As you know, when we did the Canada-US. Free Trade Agreement I was actually the person who was in charge of drafting and implementing it, and that required amendments to the Copyright Act. So did NAFTA. So did the WTO. There were some very painful and difficult choices to make, because always, when you change something you have a direct impact on the rights between creators and users of the content.

    But our copyright system is based really on national territory. You get your copyright in Canada and then you can apply for it in other.... Our whole intellectual property regime is based on that. When the Internet.... We certainly talk about a boundary-less world. How do you change those rights? What is an Internet right? How do you monitor all of this? There is an awful lot of more nominative work that has to be done, and I would imagine we will do some of it here in this committee and in this Parliament, but a lot of it will also start on the international basis. In the same way as we have international treaties for patents, for copyright, etc., we will deal with the whole issue of the Internet and its impact on intellectual rights.

    Sooner or later, I think, on an international level, you will have to deal with the principles that apply to this new world, and then you will have national legislation in each country to enact it. It's going to be a long process, but it's fascinating--intellectually, just trying to focus on it. What is the issue, and then what are the solutions, and then how do you implement them?

    I'm looking forward to the challenge. Thank you.

    Thank you. I thank you very much for being so candid here this morning.

    We will recess for five minutes before our next witnesses.

    Thank you.

     I'll call the meeting back to order.

    Pursuant to Standing Order 108(2), our next item of business is a full investigation of the role of a public broadcaster in the 21st century.

    This morning we have with us, from the Department of Canadian Heritage, our witnesses. Welcome to you this morning.

    Once we start the presentation, if you see me leave, Mr. Scott will take the chair, and I will be back. I do have something to do in the House for a few minutes. It's not that I don't want to hear what's going on; I do have to be there for the proceedings.

    Jean-Pierre Blais.

    Thank you, Mr. Chairman.

    Thank you and good morning ladies and gentlemen. I will be making my presentation from the deck that you have before you.

    We've interpreted your request here as that of setting the stage for further study of the public broadcaster and helping you embark on that review. The deck will set out some context pieces. I wasn't proposing to give you the answers, because those would be premature at this stage, but I will help structure and feed your own reflection. Of course, as the chairman knows, it would be difficult for me to speculate on future government policy on this, but I'll help you as much as I can with the information we have.

    Firstly, on page 2 of the presentation, I provide an explanation on the public broadcaster's position within the Department of Canadian Heritage.

    The Department of Canadian Heritage and CBC/SRC make up the Canadian Heritage portfolio, but neither is a subordinate of the other. The two form a single entity. Here we are representing the department. Obviously, we support the Deputy Minister when she takes a position, but we do not represent la Société Radio-Canada nor do we have a direct link to it. I wanted to point this out.

    On page 3 of the presentation, there's a brief, and obviously incomplete, history of the public broadcaster, but I'll leave you to read that at your leisure.

    There are perhaps three points worth remembering in this context. The first is that right from the origins of the public broadcaster at the time of the Aird commission and the first legislation, it was always understood in Canada that we would go toward a mixed system. There were other models available, but we have a mixed broadcasting system today that has private, public, and community elements within it.

    The second point is that we're currently operating under the 1991 act, which itself is based in large part on the Sauvageau-Caplan report of 1986. You can imagine that the context then, or the technology existing in 1986, has moved considerably since then.

    The third observation that hit me this morning while preparing for this is that you'll notice the 1957 report ended up in legislation in 1958; the 1964 report took four years to implement, or until 1968; and 1986 recommendations took form only in 1991. So every time we do this it seems to take a little longer, because I think it gets a little bit more complex every time we tackle this issue.

    I think that's the reason they gave us a century.

    Yes, the entire century.

    On page 4 there is an important pillar of the current system that is worth reminding ourselves of. The Broadcasting Act quite clearly sets out the importance of all broadcasters exercising freedom of expression and journalistic independence. Of course that definition includes all broadcasters, but it's actually repeated for good measure elsewhere in the act to give you more independence. And there is always this healthy tension between independence on the one hand and accountability to Canadians on the other hand, and I'll get to that in more detail in a moment.

    The CBC's accountability framework is spread out. On page 5, the framework is described in detail. Obviously, the Minister of Canadian Heritage is responsible for the CBC before Parliament.

    Even though the CBC's business plan is tabled with the minister and the Treasury Board, it is not approved by the minister. The minister receives the business plan, but does not make any comments. This also applies to the annual and pluriannual report.

     Similarly, along with a lot of other crown corporations and crown agencies, such as the National Arts Centre and Telefilm, they are exempt from part X of the Financial Administration Act. That part includes powers, including the power to give direction. So that regime does not exist in this particular case.

    The Auditor General is responsible for auditing the CBC/SRC. She carries out audits on a regular basis, and the most recent one dates back to 2005. I am sure that this committee's research analyst can provide you each with a copy of the audit.

    Continuing on the governance structure, you know that there are 12 board members. They are GIC appointments. It may be surprising--it's constant in other boards, but there is an issue there--that both the board members and the president of the corporation are named. It's not the normal model that one would see in the private sector, where the board would name their own president. I'm aware of only one crown--it's the NAC--who names their own president and CEO. On top of that, when there is no chair of the board, it's not another board member who sits in. The regime in place is that the CEO of the corporation sits in on this. Ultimately, though, it is the board of directors that has the power of approval over corporate plans, budgets, strategies, and so forth.

    There's also accountability vis-à-vis the CRTC. Every seven or eight years or so, depending on the length of the licence terms, there are reviews and renewals of the various licences of the corporation. The next round will be in 2008, and that will involve a public hearing throughout the process.

    There's an odd thing in the Broadcasting Act that says the CRTC can't suspend or revoke the licence of the CBC as a special regime. On the other hand, to my knowledge, I don't recall the CRTC in recent history having revoked anybody's licence except at the request of the licensee. So that's a bit of a peculiarity in there.

    Also, the whole process of imposing conditions of licence on the CBC requires a consultation with the licensee. That regime is a bit different from that for other licensees. Certainly for the commission, a key competency has always been its public hearings and consultations. At the time of renewal, the CBC always runs rather large processes across the country.

    The 1991 act sets out the current mandate of the SRC. As is indicated on page 7 of the deck, our mandate encompasses general as well as specific goals of the broadcasting system.

    For instance, contrary to private sector broadcasters, you'll see that we talk a lot about predominantly and distinctly Canadian. So it's more than 50%. It has to be much higher in content. There's special mention of the realities of both language markets, majority and minority, at subparagraph 3(1)(m)(iv). The specificity of language in there makes it quite clear.

    Interestingly, you'll see in subparagraph 3(1)(m)(ii) that there is a clear mandate with respect to “regional” voices. The word “local” doesn't appear there. So this is both creating a window of regional voices to the nation and presenting a mirror to the region so that the region sees itself. The mandate is thus twofold. This reflects also the diversity of the Canadian social fabric.

    On page 8 we give you just a snapshot--you'll probably want to delve more deeply into this--of the reach of the CBC, of its audiences. This focuses on prime time. It's an incomplete picture, of course, but most people view during prime time. You'll also see that we've set out on page 8 some of the availability. That's over-the-air availability; it doesn't factor in the reality that sometimes these services are rebroadcast through broadcast distribution undertakings or through cable companies.

    New distribution platforms, the Internet, and other mediums whose advent we had predicted to a certain degree in 1986 and in 1991 now make up the daily reality for our public broadcaster. For example, the SRC/CBC is now a world leader in public podcasting, and is particularly successful with younger audiences.

     Page 10 is really imperfect. One could have sliced and diced this differently. The point here is, and section 3 of the Broadcasting Act says, there's a single broadcasting system. There's no parallel universe for public broadcasters. The public broadcaster works within a system. You'll see in red there that they have a television, Internet, and radio presence right across the spectrum, which will make your task even more difficult as you do this, because inevitably when you ask questions about the public broadcaster, you have to situate it within the broader system. It will be quite difficult to deal with that whole approach.

    Your mandate is a multifaceted one, and we suggest that you divide the issues as shown on page 11 and onwards.

    The first issue is on the mandate that Canadians wish to give their public broadcaster. Ultimately, it is Canadians who are the shareholders of the CBC/SRC. Under the act, yourselves, myself and all other Canadians give the corporation its mandate, from which everything else stems.

    There are programming issues, obviously, and everybody who watches, listens, accesses their broadband has views on what the corporation should provide in terms of programming. That, to us, is another bundle of issues, from sports rights, kids programming, standards of programming, whether it's news and other types of programming as well. Right now, the mandate in the 1991 act is extremely broad; it says a broad range of services that inform, enlighten, and entertain, which is copied in large part from the BBC legislation of the mid-twentieth century.

    The services are currently defined in terms of radio and television. Since then, there's been an explosion in specialty pay services, satellite services, so there's a question that some have asked. I don't know the answer, but things have evolved as they have. What is the role of the public broadcaster with respect to those new services?

    Included in the notion of service to the public is the whole notion of closed captioning and descriptive video services. Does the public broadcaster have a particular role to play with respect to that in terms of the fact that all Canadians in one way or another are paying for their public broadcaster?

    The fourth question relates to platforms and distribution, not only of course when we talk about platforms. People obviously think of

new media, platforms, broadband distribution and other issues relating to Radio-Canada's distribution system. CBC/SRC is the one Canadian broadcaster that owns the highest number of off-air antenna, and maintaining this infrastructure is expensive. Since we are also on cable, and have access to satellites that makes service available, some have discussed the possibility of using other means of access. Obviously, there are associated costs. Since everyone, one way or another, finances Radio/Canada, we are questioning whether it would be fair to have to pay more in order to receive service.

    The final cluster, which in our view is the key to all this, is accountability and governance. I'll be so bold to suggest that maybe focusing on this, a lot of other things flow from that. Once you have the accountability and governance structure fixed, the system becomes self-regulating. Do we have the optimal, self-contained system that corrects the course of the public broadcaster as it goes forward?

    You will no doubt be very interested in looking at the models the British have adopted with respect to the BBC. In a nutshell, it is a system whereby the BBC's royal charter expires every ten years, and it provides an occasion for the British public, parliamentarians, and the government to set in a sense a new contract with their public broadcaster on a ten-year rotation basis. It is another model; it's not the Canadian model. We usually use the CRTC licence process to set that process, but many people have suggested that maybe the BBC model is one that's worth exploring, adapting it to our own particular realities.

    Because at this point the CBC's corporate mandate is set integrally in the Broadcasting Act, some have asked, should there be a separate piece of legislation that deals with corporate governance at the CBC

and the SRC?

    That is also an option that's been proposed to really focus on the accountability framework around the governance. In past reports, your own committee has mentioned the need for accountability on the part of the CBC. They've made efforts, and you will no doubt want to look at any improvements they've had with respect to telling Canadians the differences they've made.

    In conclusion, Mr. Chair, I simply want to say that we at the department are here to support you in your study. If you need additional documents, please do not hesitate to ask us.

    I would suggest that you have a look at the monitoring of the CRTC report, which is published annually and provides a good picture of the broadcasting system.

     Some members mentioned the section 15 report that was tabled in December and looks at the entire broadcast system in the future. I think that's another basis...and if there is additional information you need, we are there to assist you.

    It's a large and complex file to study. Not only are you looking at a complex corporation, you're also indirectly looking at all of broadcasting. You may want to look at how to slice and dice in terms of manageable chunks as you move forward on this. Having tackled these issues from a number of perspectives over the years, that would be practical advice on how you could look at this.

    The final point is accountability and governance. It's key on how the system works. Once you have that working, other things will flow from it.

    Those are my general comments.

    Mr. Chair, my colleagues who work in the broadcasting policy section and the department's portfolio affairs, and myself are now ready to take your questions.

    Thank you, Mr. Blais.

     Ms. Keeper will ask the first question.

    Hi. Thank you so much for your presentation.

     It is apparent even from your presentation that it is going to be a very complex undertaking. Nonetheless, it's exciting. I think the work we have ahead of us is very interesting.

    From your perspective, how have you seen the impact of the Internet on the CBC evolve in terms of broadening the work it does or the type of media it provides, and what impact has it had?

    I won't repeat what was in the presentation specifically. I think they've had some great successes at the corporation.

    I can tell you that there was the same reaction in my programs with cultural affairs, but for my team it's very important that we stop seeing the Internet as a threat and that we also see certain opportunities. Distribution costs go down and we can have a broader reach to all Canadians.

    The phenomenon we're seeing, as well, is that although, for instance, television viewing is globally going up, if you look at the youth demographics, they're going down.

    As our aging population is growing.

    Younger Canadians are there. In a sense it's oversimplifying, but it's almost as if you have two markets to deal with. If we want to keep building our cultural sovereignty and our support to culture, both from a creation and access perspective, it's key that we're where the younger and newer generations are.

    It seems to me that it's not just the CBC, but all broadcasters aren't playing on that front at this point. There have been some suggestions that the act should be clarified to reinforce that. The CBC has a role to play there.

    It also seems that it's an opportune way, as well, in terms of cultural sovereignty. I don't know what it is, but I do know it serves the world. But in terms of Canadian content and speaking to Canadian issues....

    Absolutely.

     I don't know if you're familiar with the whole economic notion of the long tail, but the idea is that the Internet allows you to have catalogues available. Normally when you get out a movie or TV program all the hits are at the beginning and then it dwindles off. But the idea of the long tail is that because you can keep inventory available at low cost, you can keep doing sales over time. There's a tremendous opportunity for Canadian content in that long tail. In the long tail, from a calculus perspective, there's actually more room and more sales that are possible...more access to Canadians in that long tail than in that first hit. There are opportunities. It's cheaper distribution, and it's ubiquitous.

    I'm going to share my time with Ms. Fry.

     You still have two minutes.

    Ms. Fry.

    Thanks very much.

    I just wanted to ask one question. I know you have partly dealt with Ms. Keeper, but if the CBC is going to be sustained with regard to audiences, not just with regard to funding, one needs to be creating a whole new generation of avid CBC supporters and watchers. That means appealing to that demographic of about 14 to 25. What percentage of CBC listeners and viewers fit into that demographic, and what are you doing to create programming that would actually get that demographic involved? Because I think that's key to sustainability for the CBC.

    The second question, quickly, is what do you see the CBC's role is in being a newscaster? It really isn't the most popular newscaster. Do you think that's a problem, and what do you think you could do to increase its ratings?

    There are some questions there that are beyond my area of responsibility, certainly in terms of demographics. We'll do what we can to find that information for you, perhaps working with our colleagues at CBC-Radio Canada to break that down for you. They would be in the best position to explain how they have reached those new audiences.

    I know they have; there are a few noted here. A number of people would agree with your point, that you have to, and it's not just CBC-Radio Canada that has to do it, it's all broadcasters, because they're all facing this generational divide. How to keep the new generation plugged in, connected, in touch with their Canadian content? They are doing it in different ways, but it's the people there.

    Similarly, when you talk about the news and information, again that's a question that I'd suggest you ask the CBC rather than us. What I can tell you is that the current Broadcasting Act certainly sees it as key. I can tell you that our information, when we've done any consultations or discussions on this, people really see the CBC as a point de référence in terms of news and information. The cross-support they have with their all-news channel makes the quality of the news there.

    But their very presence in the marketplace--and this is probably particularly true in the French-language Quebec marketplace, but not only there--has actually brought the standard up, even of the private sectors, because there is a healthy dialogue as we're trying to get audiences. Both the private networks and the public networks are striving to increase the quality of what they're broadcasting.

    Thank you very much.

    Mr. Kotto.

    Thank you, Mr. Chairman.

    Good morning and welcome. I'm very pleased to see you again. Firstly, I wish to congratulate you for your very clear and well-written documents tabled with this committee.

    Would it be possible to obtain a historical overview from the regions' information services? This is a topic that I would like to eventually bring up with the committee, so that we can assess the decline or improvement of services. We sometimes receive complaints from people living in remote areas, claiming that they wish to change services because they no longer feel represented in what is broadcast locally.

    Would it be possible to carry out a comparative study of the respective performances of Société Radio-Canada and the CBC? Some critics would have us believe that in the world of public audiovisual broadcasting, the CBC is a lame duck in comparison with the Société Radio-Canada, which performs well year after year, in spite of the meagre resources that are allocated to it.

    Thank you.

    With respect to your first point, we will certainly try to find that information. Once again, we will see with our colleagues at Radio-Canada if they have the documents that we can then pass on to this committee.

    To my knowledge, there has been no comparative study that shows that the CBC is in greater difficulty. It is certain that I have often heard people talk about the problem with CBC/SRC being centred on English-language television. However, it would be dangerous to single out this one factor as the whole explanation for the problem. The tiny fragment which is the francophone market, in a context of globalization, the cost of high definition and technological change are such that the market could, within 5 to 10 years—and this where the committee's mandate comes into play—face new challenges such as funding and content distribution.

    I can answer your other questions, but I am not aware of the existence of a comparative study of the respective performance of the Société Radio-Canada and CBC.

    Are there any statistics on this subject?

    The annual report contains much data and performance indicators on this subject. We have a copy here and we can send you one as well. This report is available on Radio-Canada's website. The corporation collects a high volume of data on how different services provided perform, in both languages.

    All right.

    However, this is a quantitative and not qualitative analysis.

    Quantitative.

    And non-qualitative. Very well. Thank you.

     Mr. Angus.

    Thank you for coming before us again. I found this presentation a very good overview of some of the issues we're going to definitely be looking at.

    I was particularly interested in the issue of accountability in governance structure, because you mentioned that as a key issue, and I definitely agree. I'm looking to see if you've looked into other public broadcasters on the role that they have in terms of their set-up for their governance structure. It seems to me one of the problems we've had with CBC is that with the governance structure of our board and the choosing of the chair, it remains as a child of patronage, and it does not seem to be the similar situation in other public broadcasters, where they've separated that and they have a head-hunting process to ensure that there's a level of independence and accountability in terms of the governance structure.

    Have you, in your department, looked at the other models?

    Yes, we have. On the appointment of the chair, obviously in Japan, with NHK, which is the largest public broadcaster, they have a different way of doing it, so we've looked a bit at that.

    The one we've concentrated the most on has been the BBC model, for a number of reasons. First, the Canadian model is largely based on the BBC model of the mid-twentieth century, so there are some similarities there. Second, from a public administration perspective, it's the model that's most similar to ours. I guess we could provide you an overview of the charter process in the U.K., which has been very open, with a lot of information on the web. We could maybe gather that information for the chair or through the committee to explain in descriptive terms--

    Yes. I would definitely like it if you could put together some stuff for our committee to look at, because I think governance structure is something we need to look at.

    Secondly, I want to follow up on this very interesting discussion of the “long tail”. I think we'll probably have to go for a beer to do that, as opposed to the three minutes I'm being allotted by our very strict chair.

    I was listening to CBC the other day while driving across northern Ontario, and we had a letter on CBC from a woman in Korea. She listens to the news at home now. She keeps in touch through the Internet, and it made me realize again the role of the new platforms in reaching out.

    I want to ask you about the LaPierre report of 2005, which was the charter for the online cultural citizen. It had nothing to do with CBC per se, and it's not going to be too specific on LaPierre, not to worry, but what LaPierre was talking about was really the need for Canada to look forward in developing an online cultural presence in the 21st century so that we are in the forefront of new media as it's happening. He had made the recommendation of setting up an agency with a similar budget to the CBC to ensure that kind of presence, and perhaps because of that request I haven't heard of his report again from anybody in government.

     I'm wondering about how useful it would be to have the CBC assume some of those roles in terms of ensuring market platforms for film, for music, so that people around the world can go on to a site and get access, as you suggest in the “long tail”, to Canadian products in a downloadable fashion that they can pay for. And since CBC already has a strong online presence and since it already has an international audience, has the heritage department looked at ways of perhaps even a one-time increase to the CBC to allow the creation of some kind of online platform system?

     No to the specific question you've asked, but certainly not no to the general trend.

    We're tackling this across magazines, books, and audio-visual, in terms of the challenge of emerging technologies and how we get there. Our objectives in the department and across the culture portfolio are to support the creation of culture, which we have good mechanisms for, and also the access. This is where the new platform is played, on the access front.

    It's quite interesting, though, that we have a number of institutions that can also play a role in this. We have the National Film Board that has a wonderful collection and is working on that. Yes, we have the CBC and their archives, and we have programs with Canadian culture online, where we partner with other departments and other agencies, including the CBC, to help them digitalize their content, whether it's for the virtual museum or other tools. So we are there, trying to support this.

    Is it just for the CBC? There are other collections available. Library and Archives Canada is doing a lot in this realm as well.

    We have noted with a lot of interest what the BBC has done. It has put a great deal of its digital information online in Britain. The philosophy behind it is that since the Britons have paid for it through their licence fees, it's a form of collective wealth.

    Those are interesting ways of getting Canadian content distributed through new platforms. We have a piece on that particular aspect that we can maybe share with you with respect to the BBC, but we have a lot of institutions that could play a role in this, not just CBC and Radio-Canada.

    Thank you.

    Mr. Fast.

    Thank you, Mr. Chair.

    Thank you for coming.

    It has been said that the CBC is the mirror in which Canadians view themselves. If that is in fact the essence of CBC's role, in my mind the challenge is to try to determine what that face looks like. In a country as diverse as Canada, that's a real challenge.

    I did notice that on page 13 you just briefly referenced that by asking the question, “How should the success of a public broadcaster be assessed? By market share? By the quality of its programming? By whether Canadians are satisfied by the services it provides?” You can ask Canadians across the country. Some feel the CBC is too progressive. Some say it shouldn't be as progressive. Others will say there's not enough variety in the content. Some feel it should be totally privatized. If you ask my wife, she's a big fan of CBC radio, of Eric Friesen, Howard Dyck, and the like. That's her source of classical music programming.

    My question to you is how we currently assess what the face that we see in that mirror looks like. What do you see happening in the future? Do you expect that this mandate review will look into that issue? Is there a more effective way of determining what that face looks like?

    As a manager in the public service, what gets measured is what gets done, so I'm always focusing on the results story.

    Some of that is occurring now in different venues. The CBC assesses itself in its annual reports on how they think Canadians view them themselves. That's a self-awareness, a self-assessment of that.

    As well, the fact that we have a periodic appointment every six, seven, or eight years with the CRTC is another opportunity for that to occur. Of course, parliamentary studies such as this are another one, and we've seen that there have been a few in the recent past.

    So they're there, but they may not be as systematic as they could otherwise be, and as clear. They're based on the mandate as it exists now.

    My point would be that as you do the study, you will hear lots of views. Everybody has an opinion, and that's healthy and good. But it's important not just to say what the mandate ought to be, but how we'll measure whether they are meeting that mandate for Canadians.

    There are tools now. The Auditor General, in her comments, suggested that maybe we could do a better job in measuring results. Certainly that's based on the current mandate. As you move forward and look at what the future holds, you'll have to come up with a whole list of indicators of success in terms of reaching the goal.

     Thank you.

    I have a second question. Is it safe to assume that the CBC doesn't operate on a level playing field vis-à-vis the private broadcasters, in terms of some of the restrictions that we've imposed on it regarding again reflecting the face of Canadian diversity?

    That's a value judgment I'm trying to avoid. Certainly all broadcasters have a duty to reflect the diversity of Canada. By “diversity”, I include ethnocultural diversity, linguistic diversity, aboriginal diversity, and regional diversity, because they're all part of the picture.

    Private broadcasters will say that their key strength is their proximité, their closeness to their audiences, particularly in radio. In private radio, that's the point. But others would say that's also the role of the public broadcaster, with a different sort of programming. Maybe radio is the clearest place where there is definitely a distinct voice, particularly in English markets, between the private and the public. There's good complementarity there. Television is a bit more of a challenge.

    As I said earlier, in the French market—but I also think it's true everywhere—the presence of having that mixed system brings in not an economic competition, but a reality competition. They each want to improve because they need to connect with their audiences. Certainly when services like Bravo! and Book Television came online within the CHUM group, that had an effect on the CBC. The CBC said that was their traditional niche, so they had to look at how they could do that sort of content even better. So there is some dynamic healthiness to having the two communities of players, the public and the private, mixing together like that and improving each other.

    I don't know. Does the CBC have more to do on regional and local? I think all broadcasters have a duty to reflect local news and regional news. That's why we have a Canadian system.

    Thank you very much.

    Mr. Scott.

    Thank you very much.

    Just for information, it would be extremely helpful to us if we could get a page on funding over time. Because it's a public broadcaster, the government would make decisions from time to time on that. To some extent, it has had both an expansive and a constrictive effect in terms of the public broadcaster, so I'd be very interested.

    I'm not sure of the relationship between the department and the ministry and the CBC in the context of some of the broader issues. I understand that with the more specific issues, the arm's-length nature is critical, but on the broader....

    For instance, I'd be very curious as to whether or not the department has a sense of what “regions” means. I think we all have an inherent understanding of the word, but I don't think it's necessarily a word that has shared meaning. Consequently, I'm sure in Ottawa, Fredericton and Halifax would be presumed to be in the same region, but you can't go back to Fredericton and Halifax and convince anybody of that. So I would be interested in how you see “regional” working, although I know you're trying to avoid value judgments.

    No, you're absolutely right. Everybody has a different way of defining “regions”. That's why the word “region”, in a sense, has been defined almost as “local” in radio for the CBC. When they have a local television station and the mandate is regional, obviously that means one thing.

    We don't have a clear definition, but you're absolutely right. There are different ways of getting to it. In terms of my own experience, I used to live in Montreal and I now live in the Outaouais. Certainly, when I look at all broadcasters that broadcast out of Montreal, I feel very much in a region, and not as served. We all have lived that reality.

    We don't have a definition. I would suggest, in fact, that the word “region” in section 3 of the Broadcasting Act was a clever constructive ambiguity that allowed that definition to have a flexible meaning over time, through licensing decisions by the CRTC.

    More broadly, and just bigger than the CBC in this case or the public broadcaster in this case, but in terms of the department, it is quite fascinating. Opportunity exists in the context of all of the inputs that would be available to the Government of Canada in terms of telling stories, given the access to the kinds of venues that are now available and would have been unheard of a very short time ago. What actions has the department taken that would be more horizontal than simply the CBC, to address that, if at all?

     When I mentioned earlier that we had five strategic objectives in the cultural affairs sector, one of them is reflecting our diversity, which includes regional diversity. So the vast majority.... I don't want to say all, because I'm not sure of every single one, but all of them have a regional component. For instance, our book publishing component and our magazine component helps regional development.

    Forgive me, I don't mean to interrupt, but I don't have very much time.

    I was thinking more about how the department would be responding to the issue that you raised earlier, I think in response to Mr. Angus, that it wasn't just about broadcasting in terms of all the inputs, all the content. You referenced archives, for instance. What has been done by the ministry, if anything, to explore the possibilities that are available because of technology, to make all those wonderful assets more available to Canadians?

    Certainly the virtual museum—I'll give that as an example—is one where we help local museums or collections put themselves in digitalized form to make available to the world a collection that would never have the legs to travel more broadly. In fact, a small museum in a particular community can take their collection, with the help of the department, and digitalize it and make it available more broadly. That's one example of the content.

    Is there anything by way of a broader strategy? That would inform this discussion very much.

    It's not a defined strategy but it's a constant preoccupation in the sense that it's there, everywhere. We don't say, okay, what are we doing for regions today, as a title, but every program, as they're delivered through their terms and conditions, has a regional component.

    I wasn't as much concerned about the regions in this line of questioning as I'm interested in how we can take a lead in terms of these new technologies as a small country with a huge challenge: big space and small numbers. It strikes me that we probably would be inclined to do this first and best on the planet because of the nature of our country, so I was just curious about that.

    Perhaps we can explain in more detail the Canadian culture online strategy, which in fact has several components of that nature, and provide that to the committee. But I think it gets precisely to those sorts of issues.

     I'm trying to be polite, Mr. Chair. Am I eating into somebody else's time?

    Yes, you are, a little. Thank you.

    Mr. Kotto.

    Thank you, Mr. Chairman.

    "Inform, enlighten, entertain" is the slogan used to define Radio-Canada's mandate. Who coined this slogan and which year?

    If we look at the legislative history, it seems to have been inspired by the act which created the BBC.

    In which year?

    During the 1930s or 1940s.

    From time to time, do you at the department receive complaints from Canadians concerning the CBC/Radio-Canada? If so, are these complaints archived? If so, is it possible to receive a concise compilation of some of the most common complaints?

    From time to time, we do receive complaints, and there is a mechanism by which we process these complaints internally at Radio-Canada. When we receive complaints, they go through this system.

    Okay.

    For example, if a viewer would lodge a complaint, normal practice is to send in a complaint, and ask for a reply from management. If the complainant is dissatisfied, the complaint is generally sent to the ombudsman for either the French-speaking section or English-speaking section. Sometimes complaints are studied depending on their complexity, by the CRTC. Perhaps the CRTC would be better positioned to provide you an index of the types of complaints received by both English and French ombudsmen.

    Thank you.

    Mr. Warkentin.

    Thank you, Mr. Chairman.

    Thank you very much for coming here today and explaining some of this to us. We have probably more questions than we have time to get answers, and obviously there will be other people who will want to talk to you about it. I would like to get into the threat of new media technologies. We'll get there soon, but I just want to ask a question.

    I guess I would assert and begin my question with a statement—that is, that the value of a public broadcaster is in how many people actually take it in, how many people view it.

    Maybe it's not even the department's responsibility, but I'm wondering if the department has looked into ways the CBC might be able to start to key in on niche markets where Canadians as a whole would be interested in the CBC. I'm thinking of if the CBC became the foremost authority on whatever, be it the weather or whatever, something that would draw people, general Canadians, to that, especially in this universe of a million-channel universe, specifically on the television side but certainly on the radio side as well. I'm wondering if the department knows of any initiatives such as that where we would key in on a niche type of thing that would draw all Canadians to the broadcaster for one reason or another.

    Certainly events in public life, like state funerals or the opening of Parliament, tend to draw Canadians. Many people think it's the role of the public broadcaster to contribute to that.

    What we have would be anecdotal at best. CBC has the best connection with its viewers, and its strategy could answer that question. From an anecdotal perspective, something like Canada: A People's History is certainly a key example of a strong cross-platform approach where the quality of the traditional content was able to live in other platforms and realities.

    But I really think we're a bit far from the programming. You would get the CBC to contribute to that.

    For sure.

    As the ministry conducts the review and continues to look into the whole issue of the threat of new media.... I shouldn't say threat; it's a positive thing. Canadians are moving in that direction regardless. I think it's just a threat to conventional types of broadcasting.

    How does the department assess what new mediums or media the CBC should take responsibility for? At what point does the department look at possibly setting up another--or is there any possibility? Is the CBC responsible for all media, regardless of what the new technologies will be?

    Back when this committee did the Lincoln report there was some discussion about those new platforms. The committee at the time recommended that the act be amended to make it clear that the new media was part of the mandate.

    In a sense, the department doesn't assess that. It's what the act says that allows.... So it's very much in your hands.

    I'm just thinking that at one point newspapers and magazines were the previous media, and the CBC isn't responsible for newspapers and magazines.

    No, it isn't, although strangely enough the BBC does publish magazines related to its shows. The CBC does some merchandising associated with its programming, but it's very much up to the CBC and its board of directors to decide whether they're within or outside of their corporate mandate. We haven't done that sort of analysis independently.

    The mandate is linked at its core to radio and television broadcasting, so the issue is how far does it go in other platforms and stop being what it's supposed to be. I think everybody would admit that new media is now seen largely as an extension of traditional media, and they cross-finance and cross-promote each other. It would be quite a different thing if it got into a new business line that was unrelated. I think that's an issue people will raise in your proceedings.

    Certainly we're going to be looking at ways to ensure that people of my generation and generations that follow will still be interested in what the CBC has to say. Younger people are turning to other channels, but they're also looking at new media. We want to ensure that we continue to have a strong public broadcaster that will speak to the new generation.

    Just out of curiosity, what is the federal contribution to the CBC? Do you know the number offhand, and what the private contribution is as well?

    You mean from advertising as well?

    I think in answer to your colleague's question, we'll do a financing, because it gets too detailed, with maybe a year-over-year comparison that we can provide the committee. You'd have to look at it as radio versus television versus specialty, and I'd do short shrift to the numbers.

    Thank you so much.

    Ms. Keeper.

    Thank you, Mr. Chair.

    I'd like to go back to the mandate of the CBC or the Broadcasting Act, and the relationship of the department to the CBC on aboriginal issues in terms of the diversity of that mandate. What is the department's role in that with the CBC? Has there been a shift since the emergence of APTN, and has that changed in terms of the department?

     It's not so much the department that looks at this. As I explained, we're arm's length. Now, arm's length, as the legal counsel and the department keep saying, doesn't meant you can't touch. But there is that arm's-length relationship.

    The entity that actually looks at this and that has done so in the past is the CRTC. These sections here, as you may have noticed, do not actually mention aboriginal; they mention multicultural and multiracial. However, they have to be read in the context of section 3 more broadly. I think it's paragraph 3(1)(d), by memory, that actually talks about aboriginal Canadians. The CBC, because it's part of that broader system, also has obligations to men, women, aboriginals, youth.

     So you have to see it in the broader context. It's up to the commission, in its renewal process in the current regime, to make sure that CBC is living up to that part of their mandate as well.

    I think I'll split my time with Andy.

    Yes. I'd like to continue to explore the idea around the broader opportunity presented by the technologies. I certainly would admit that my support for the CBC causes me to instinctively see other things as threatening to some extent.

     I think Mr. Warkentin said it is an opportunity. As we're looking at the role of the CBC in Canada, the decision we have to make is to what extent they should be the instrument that is available to the Government of Canada to seize those opportunities, or whether in fact they would have a more finite responsibility within that universe, which would be carved out. I think that's a legitimate question.

     I go back to just being curious about anything that has been done that we should be made aware of by way of.... As you said, it's constant preoccupation. Is there any manifestation of that preoccupation that we should know about?

    As I said earlier--

    I know there are programs and I know the list.

    When the BBC was renewing its charter, leading the digitalization in Britain was one of the key objectives. So that's an interesting way.

    I think we have other institutions, as I mentioned earlier, that could also support that. The Film Board's library is one of the best and it is world-renowned. We have other institutions, the Library and Archives, our national museums, that can also play an important role and have played an important role in this digital strategy I mentioned earlier. I think we'll explain all the components to it a bit better in writing.

    As I said, in your study you may want to look at what led the British government to say no, we're going to use our BBC to be the leader to do all kinds of things. And in the BBC context, it's not just to deliver programming, it's also for health and information to citizens.

    Are there other models? You've mentioned the BBC a number of times. Are there other models internationally we should be made aware of that we could consider?

    That's the closest model. We tend to look at NHK in Japan because it is the largest public broadcaster. Another similarity is in Australia and of course in France.

    You've talked about the question of governance and so on before. What about speaking specifically to the approach that nations have taken in response to two things: one, that every nation would have some desire, I suspect, to tell its stories to its people...regional and all of the other things that are in the mandate; and two, every nation would be contemplating how to do that with all the new opportunities right now.

    What I'm curious about are the responses that exist elsewhere on the question of how to seize the opportunities this technology offers...to do something that I'm sure caused the creation of the CBC in the first instance. It was in response to the new technologies that existed then. What is the contemporary equivalent of that? What would be the entity, and would it be the CBC? How do other countries respond?

    Offhand, we're not able to give you the answer. There are others, I'm sure. We'll do that offline if that's all right with the chair. We'll provide you with those analogies vis-à-vis the digitalization in the collection. I suspect our rate of broadband penetration in Canada probably has put us in the leadership role.

     I would think that.

    So there may not be a lot of other models.

    Thank you very much.

    With that, I'm going to bring the questioning to an end. I thank you very much for being here this morning.

    We will recess for four minutes.

    Mr. Angus.

    It's almost a point of order, but actually just a suggestion.

    Because today's discussion on the new media shows that it's clearly an area we're going to want to explore, could I suggest that we ask Laurier LaPierre, the author of the 2005 government report on culture and the online citizen, to do a brief so that we can learn more about some of the information already brought to the government on opportunities and cultural issues? I think it does pertain to the CBC, as this is what we focused on today.

     That's just my suggestion.

    I will take that forward. I think there's a consensus around the table that we ask for that report.

    Thank you.

    Let's recess for about four minutes.

     We will reconvene the meeting.

    We have a bit of a quandary here this morning. We have some people who are going to have to leave. We do have some important work to do.

    The first order of business that we have to deal with is the order-in-council appointment of Mr. Konrad von Finckenstein. We need a mover that the committee has examined the qualifications of Mr. Konrad von Finckenstein as chair of the Canadian Radio-television and Telecommunications Commission, and that he has the qualifications and competence to perform the duties of the post to which he's been appointed, and that the chair report to the House. Would someone care to move that motion?

    I so move.

    (Motion agreed to)

    Our second piece of business is that we go back to our 17th report, Issues relating to the Canadian Television Fund. The other day, as we left the meeting, recommendation number 4 was....

    Yes, Mr. Abbott.

    I wonder if I might possibly move to the next motion that we have in front of us, on the dissenting opinion. I would like to move that the committee append to its report a dissenting opinion from the Conservative Party, and from the Bloc Québécois, should they choose to make that draft a dissenting report, providing it is no more than two pages in length and submitted electronically to the clerk of the committee no later than Monday, March 12, 2007, at 4 p.m.

    (Motion agreed to)

    Going back to the 17th report again, there were recommendations put forward by Mr. Angus, and I think recommendation number 4 was put on hold until we had some clarification from our experts.

    When I read our great lawyer expert's report this morning I think it explains things clearly that there is a penalty system in place for the CRTC. It suggests here that if we do accept recommendation number 3--as we did--I think the penalties are already there. If we put it in place and we want to change things, it might take longer. If everyone is in favour of the penalties that are there, I think number 4 could be redundant, because there is already a fining mechanism there. All we could do with that would be to increase it or something like that. It looks fairly substantial to me.

    Yes, Mr. Kotto.

    Mr. Chairman, even though we have received a document on the CRTC's power to impose administrative monetary penalties, I still have trouble... Bill C-73 from the last Parliament, was a bill that died on the order paper. It read:

    If the CRTC had this power, I don't even think that we would had to... The act exists, but does the CRTC have the power to penalize contraventions? It's the whole grey area that bothers me still. If this had been the case, we wouldn't have had to debate this bill during the last Parliament.

     Just before I ask the expert, I think it has to be clearer that both Shaw and Vidéotron did not violate any law. It was an annual payment that they had to make. That was obvious here. So they didn't violate, and this would not take effect. If what we have said in recommendation 3, “that broadcasting distribution undertakings must make monthly, rather than annual, contributions”, had that been there, these people would have been in defiance of the law. Then it would be my understanding that subsection 32(2) would be applied. Again, what I heard was that to pull the licence from someone is a very, very drastic thing. So these penalties are there.

    But my understanding, Mr. Kotto, is that they did not violate the law as it is written. If recommendation 3 did become law--and that is our recommendation--then I think subsection 32(2) then would be applicable. Am I correct? I could be wrong.

    I'll clarify a little bit. Under the Broadcasting Act, you already do have certain offences that carry certain penalties. A delegated authority such as the CRTC cannot make its own penalties. To do so, you would have to amend the Broadcasting Act to provide for those penalties.

    So with respect to what was recommended in recommendation 4, you would have to go back to amend the Broadcasting Act to give the commission the authority to impose those new penalties. However, as I mentioned, there already are existing offences and penalties in the Broadcasting Act that would apply. The authority is already there in the Broadcasting Act for those.

    I was somewhat right.

     Mr. Scott.

    My memory is faulty, but I believe that in the last meeting the place we arrived at had to do with the fact that Mr. Angus offered the question: Were there powers to fine for activities that were apart from operating without a licence? I think the logic in that discussion was that the removal of a licence is very severe, and we wanted the ability to offer a fine to someone who was operating in a fashion that was not consistent with their licence but that didn't require the removal of the licence. Isn't that where we were the last time?

    And I think we were told that we thought that the power existed--and you're confirming it today--that in fact you don't have to remove a licence to be able to fine somebody. I think that was the crux of the discussion the last time we had it.

    Mr. Angus.

    I just want to have it clarified for me. My understanding--and maybe I interpreted the issue wrongly--during the CHOI-FM debate with the pulling of the licence, what the media analysts were saying was that the CRTC didn't have tools at its disposal other than pulling a licence, as opposed to assigning financial penalties for a broadcaster that was ignoring CRTC directives. They still had a licence, but they were ignoring a number of issues. And whether or not there were sufficient tools in the CRTC toolbox to continue to apply pressure, for example financial penalties, short of pulling a licence, because, again, it's a drastic step.

    Is that the case? Do they have the tools? I don't know if you know this or not, but do they use those tools?

    I'm not familiar with the case you have referred to. But my reading of the Broadcasting Act is that under subsection 32(2) and section 33, there are these other enforcement powers that impose penalties.

    Hearing that, could someone tell me what to do with recommendation 4? I would suggest that it be struck.

    Charlie.

    Yes. We're not trying to rewrite the entire act. We're just trying to make sure that there are the appropriate measures in place. So I think if they have tools, then that's acceptable.

    Thank you.

    Recommendation 4 will be deleted.

    Hearing that, I think all the rest of the recommendations were carried the other day.

    All those in favour of the motion by Mr. Angus that the report be adopted as a report to the House, and that the chair or his designate present it to the House.

    (Motion agreed to)

    Yes, Madame Bourgeois.

    I just wanted to bring to your attention a few mistakes in the report on page 7 of the French version. It's just a grammatical error.

     It has just been brought to my attention by the clerk that we do have another motion for typographical and editorial changes. We'll be putting a motion forward to make sure that everything is correct.

    Along the same lines, I want to point out that the study was on the funding crisis of the Canadian Fund and not on the Canadian Fund itself. The title has to be changed.

    Do you want to change the title?

    I think that's correct.

    The title has been changed to “The Crisis of the Canadian Television Fund”--correct? All in favour?

    (Motion agreed to)

    Does the committee want a government response? It would say, “Pursuant to Standing Order 109, the committee requests that the government table a comprehensive response to this report.”

    It's moved by Mr. Angus.

    (Motion agreed to)

    Again, I'll go to the typographical and editorial changes.

    It says:

    This is moved by Ms. Bourgeois.

    (Motion agreed to)

    Now, we set forward the other day the notice of motion of February 26.

    I'd ask that it be let stand.

    Okay, thank you.

    With that, I think all business is done. Thank you.

    The meeting is adjourned.