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37th PARLIAMENT, 1st SESSION

Standing Committee on Canadian Heritage

EVIDENCE

CONTENTS

Thursday, April 18, 2002

0910

The Chair (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.))

Mr. Ronald Lund (President and CEO, Association of Canadian Advertisers)

The Chair

Mr. Ronald Lund

Mr. David Harrison (President, Harrison, Young, Pesonen and Newell; Institute of Communications and Advertising)

0915

Ms. Sunni Boot (President, Canadian Media Directors' Council)

0920

Mr. Robert Reaume (Vice-President, Media and Research, Association of Canadian Advertisers)

Mr. Ronald Lund

0925

The Chair

Mr. Robert Reaume

The Chair

Mr. Jim Abbott (Kootenay--Columbia, Canadian Alliance)

0930

The Chair

Mr. Jim Abbott

Mr. Robert Reaume

Mr. David Harrison

Mr. Jim Abbott

Mr. Robert Reaume

0935

Mr. Jim Abbott

Mr. Ronald Lund

Mr. Jim Abbott

Ms. Sunni Boot

Mr. Jim Abbott

Ms. Sunni Boot

The Chair

Ms. Christiane Gagnon (Québec, BQ)

Mr. Robert Reaume

Mr. David Harrison

0940

Ms. Christiane Gagnon

Mr. Ronald Lund

Ms. Sunni Boot

The Chair

Mr. Dennis Mills (Toronto--Danforth, Lib.)

Ms. Sunni Boot

0945

Mr. Dennis Mills

Mr. David Harrison

Mr. Dennis Mills

Mr. David Harrison

Mr. Dennis Mills

Mr. Ronald Lund

Mr. Dennis Mills

Mr. Ronald Lund

Mr. Dennis Mills

Mr. Robert Reaume

Mr. Dennis Mills

Mr. Robert Reaume

Ms. Sunni Boot

0950

Mr. Dennis Mills

The Chair

Ms. Sarmite Bulte (Parkdale--High Park, Lib.)

Ms. Sunni Boot

Mr. Ronald Lund

Ms. Sarmite Bulte

0955

The Chair

Mr. Ronald Lund

Ms. Wendy Lill (Dartmouth, NDP)

Mr. Ronald Lund

Ms. Wendy Lill

1030

Mr. Ronald Lund

Ms. Wendy Lill

The Chair

Ms. Sunni Boot

The Chair

Mr. Claude Duplain (Portneuf, Lib.)

Mr. Robert Reaume

Mr. Claude Duplain

Mr. David Harrison

1035

The Chair

Mr. Ronald Lund

The Chair

Mr. Robert Reaume

The Chair

Ms. Sunni Boot

The Chair

Mrs. Cathy Loblaw (President and CEO, Concerned Children's Advertisers)

1040

Ms. Sunni Boot (Vice-Chair, Media, Concerned Children's Advertisers)

1045

1050

The Chair

Ms. Cathy Loblaw

The Chair

Ms. Cathy Loblaw

1100

Ms. Cathy Loblaw

The Chair

Mr. Alan Mirabelli, (Vice-Chair, Media Awareness Network; Executive Director, Administration, Communications and Information, Vanier Institute of the Family)

1105

Ms. Jan D'Arcy (Co-Director, Media Awareness Network)

1110

Mr. Alan Mirabelli

1115

The Chair

Ms. Christiane Gagnon

Ms. Cathy Loblaw

1120

Ms. Christiane Gagnon

The Chair

Ms. Wendy Lill

Ms. Jan D'Arcy

1200

The Chair

Ms. Wendy Lill

Ms. Jan D'Arcy

1205

Ms. Cathy Loblaw

The Chair

Ms. Sarmite Bulte

1210

The Chair

Ms. Sarmite Bulte

The Chair

Ms. Sarmite Bulte

Ms. Sunni Boot

1230

Ms. Sarmite Bulte

The Chair

Ms. Sarmite Bulte

Ms. Sunni Boot

Ms. Cathy Loblaw

Ms. Jan D'Arcy

Mr. Alan Mirabelli

1235

Ms. Cathy Loblaw

Ms. Sarmite Bulte

Mrs. Cathy Loblaw

Ms. Sarmite Bulte

Ms. Cathy Loblaw

Ms. Sunni Boot

Ms. Jan D'Arcy

1240

Ms. Sarmite Bulte

Ms. Sunni Boot

Ms. Cathy Loblaw

Ms. Jan D'Arcy

The Chair

Mr. Alan Mirabelli

The Chair

Mr. John Harvard (Charleswood St. James--Assiniboia, Lib.)

1245

Ms. Cathy Loblaw

The Chair

Ms. Sunni Boot

The Chair

Mr. David Harrison

The Chair

Ms. Wendy Lill

Ms. Cathy Loblaw

1250

Mr. John Harvard

Ms. Cathy Loblaw

Ms. Sunni Boot

Ms. Linda Millar (Director, Education, Concerned Children's Advertisers)

The Chair

Mr. Rodger Cuzner (Bras d'Or--Cape Breton, Lib.)

1255

Ms. Cathy Loblaw

Mr. Rodger Cuzner

Ms. Cathy Loblaw

Ms. Sunni Boot

Ms. Cathy Loblaw

The Chair

Ms. Jan D'Arcy

The Chair

1300

Ms. Cathy Loblaw

The Chair

Ms. Sarmite Bulte

Ms. Cathy Loblaw

Ms. Sarmite Bulte

The Chair

CANADA

Standing Committee on Canadian Heritage

NUMBER 052

1st SESSION

37th PARLIAMENT

EVIDENCE

Thursday, April 18, 2002

[Recorded by Electronic Apparatus]

¿ (0910)

[English]

The Chair (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): I'd like to declare open the meeting of the Standing Committee on Canadian Heritage, which meets today to continue to study the state of the Canadian broadcasting system.

[Translation]

The Committee meet today to pursue its study on the state f the Canadian Broadcasting System.

[English]

Before I turn the meeting over to our witnesses, I'd like to inform members that we will break for a short time at 10 a.m. because four of our soldiers have been killed in Afghanistan and eight of them have been injured. The Prime Minister will make a brief statement in the House at 10 a.m. that will last five or ten minutes. We would like members to be able to be there to join in the tribute to the soldiers who were killed. We'll therefore suspend for a brief time at 10 a.m.

Today our study is involved with the world of advertising and communications, and we're pleased to greet the Association of Canadian Advertisers, its president and CEO, Mr. Ronald Lund, and Monsieur Robert Reaume, vice-président, médias et recherche.

We also welcome, from the Canadian Media Directors Council, Ms. Sunni Boot, president of Optimedia Canada, as well as the Institute of Communications and Advertising, represented by Mr. David Harrison, president of Harrison, Young, Pesonen and Newell.

We greet you all, and we'll start with Mr. Lund.

Mr. Ronald Lund (President and CEO, Association of Canadian Advertisers): Good morning.

The Chair: Mr. Lund, you know the format: a statement for ten minutes or so, so that we have time for questions.

Mr. Ronald Lund: Absolutely.

Good morning. Bonjour. Mr. Chairman, members of the committee, we're very pleased to have this opportunity to participate with our comments in your committee's review of the Broadcasting Act. Our group here today represents three different organizations, as you've pointed out, Mr. Lincoln.

Ms. Boot is with the Canadian Media Directors Council; Mr. Harrison, the Institute of Communications and Advertising; and Mr. Reaume and myself with the Association of Canadian Advertisers. Together we represent Canada's interests in the advertising industry: the professionals who plan, create, produce, purchase, and, yes, pay for the advertising of the vast majority of products and services in our country.

We're appearing jointly before you today because broadcasting is essential to all of our members' interests. It is our hope that we can impart to you today just how very important broadcasting is to advertising in Canada, and at the same time how vitally important advertising is to broadcasting.

There is no doubt that culture, policy, ownership, the public-private sector, and production-distribution, as noted in your committee's terms of reference, are vitally important to the Canadian broadcasting industry. However, we maintain that commerce is the key to uniting these components. As such, it is advertising that helps make the industry thrive, yet there was no provision in the standing committee's terms of reference to include it. For these reasons, we believe the essential role of advertising in the Canadian broadcasting system requires serious consideration during this review.

Advertising is a very significant force in the world. In virtually all well-developed countries, advertising is considered an important and necessary component of the communications infrastructure. It is estimated that the total worldwide disposable advertising expenditure topped $1.2 trillion in U.S. dollars last year. In Canada, the aggregate expenditure in 2000 is projected to have been $16.79 billion. Direct and indirect employment in this sector represents approximately 250,000 jobs, or 2% of all jobs in Canada.

Moreover, approximately $8.67 billion in direct and indirect labour income and an estimated $4.51 billion in direct and indirect business income was generated by the Canadian advertising industry last year in Canada, for a total value added of $13.2 billion. Importantly, approximately 79% of total advertising expenditures in Canada remain in the Canadian economy as value added. Compared with most Canadian industries, this is a very high level of domestic content. Clearly, advertising makes a significant economic contribution to our country.

But it does more than just add dollars and jobs. Advertising is a force that provides a connection between healthy competition in Canadian goods and services, the benefits of innovation, wider choice, lower prices, and better service. Advertising is a powerful catalyst for competition, providing consumers information and thereby lowering consumer prices. Advertising also increases government revenues through the income tax derived from the jobs it creates and from the greater sales tax base that results from it.

In short, the Canadian economy would not be as vibrant without the ability by advertising to communicate and establish strong brands under differentiating benefits.

Mr. David Harrison (President, Harrison, Young, Pesonen and Newell; Institute of Communications and Advertising): Although advertising is essentially a commercial activity, it can also be a very potent cultural force. Television and radio commercials convey the moral principals, social values, traditions, and lifestyles of our culture to ourselves and to others. Everyday Canadian life is played out in 15-, 30-, and 60-second installments.

Sometimes a commercial captures the essence and imagination of a nation and assumes iconic proportions, as happened with the Molson's “I Am Canadian” rant commercial last year, which the Minister of Canadian Heritage, the Honourable Sheila Copps, actually used to illustrate the Canadian difference last year in a speech in Boston.

Sometimes commercials simply touch our hearts as Canadians in a very special way, as in Bell Canada's depiction of a young man phoning his grandfather back home in Canada from Dieppe, “just to say thanks”.

Of course, this Canadian cultural approach is never a guarantee of business success. But when it does make good marketing sense, advertisers can reap the wonderful unity of commercial and cultural energy.

Advertising is also the primary resource sustaining the Canadian broadcasting system. Net advertising media spend was estimated to represent $10.3 billion in revenue flow to Canadian media companies last year. Of this amount, approximately $2.5 billion is invested annually in television advertising and about $1 billion in radio advertising.

Of course, revenue inflows from several other sources as well support the broadcasting system in Canada. In television, approximately 14% of total revenue comes from subscription revenues from pay and specialty channels, 24% from public funding, 1% from the cable production funds, 3% from private sources, and 6% from all others, but fully 51% comes directly from airtime sales of advertising. That's over half of all the revenues to support broadcasting coming from advertising, and it makes advertising the single largest contributor of funds to the Canadian broadcasting system.

Considering these substantial revenues, the role of advertising is critical to a healthy and robust broadcasting system in Canada. It is advertising that pays for content. That's always been the pact between advertisers and the public since the very earliest days of broadcasting. It is advertising that pays for the programs that entertain, inform, and educate Canadians. Without advertising revenues, the broadcasting system could not survive. And it is the advertising that makes it possible for the system to fulfil the public objectives established by the Broadcasting Act.

In short, advertising brings economic strength to the system. It is the foundation on which we have built an exciting industry of which all Canadians can be proud.

At the same time, a healthy broadcasting system is critical for advertisers in Canada. For many advertisers, conventional broadcasting continues to be the workhorse of brand building. However, advertisers' interest in broadcasting is still essentially commercial, with our role being somewhat like that of a silent financial partner. As financial partners, we feel we've made a long-term investment in television and radio as advertising media, and we wish to protect this investment.

The accepted wisdom seems to be that advertising revenues will always flow to television and radio; however, advertisers today have more choice than ever of different vehicles through which to reach consumers. The fact is that advertisers will only continue to utilize the broadcast media if, on careful reflection, the number and quality of viewers and listeners remains acceptable for the price paid. If the value of that audience is diminished, some advertising revenues will naturally flow to other media.

¿ (0915)

Ms. Sunni Boot (President, Canadian Media Directors' Council): We can see that television and radio have so far been great marketing tools for advertisers, but we want to ensure that they remain so. For the sake of a healthy broadcasting system in this country, we respectfully suggest that you should also want them to remain so. This means ensuring not only a nourishing system for culture but also a powerful marketing system for commerce that remains competitive, uncluttered, effective, and efficient.

We are very conscious that the Broadcasting Act mandates the development of Canadian expression, and that is one of its main tenets. We are supportive of the government's objectives in this regard and its legitimate use of the broadcasting system for cultural policy. We make this statement with the full understanding that advertisers' purchase decisions are made for the most part on a cold evaluation of audience size and composition, regardless of the cultural orientation of the content.

As commercial undertakings with responsibilities to shareholders and others, we are charged with marketing our products and services to the best of our ability. As a result, we primarily concern ourselves with the efficiency and efficacy of media. We must base our decisions first on analysis.

However, we do recognize that without a substantial base of domestic content, the need for an indigenous Canadian system at all would be tenuous. Therefore, we would encourage your committee and the CRTC to view the area of Canadian content as one of the key business opportunities for the broadcasting system as we look to the future and to develop policies to expand this entire area. Importantly, however, those policies should never attempt to try to legislate viewership. Ultimately, it is the viewers alone who will decide what they want to watch.

In today's world the appetite for global content is enormous. We believe that Canada has the talent, technology, and business environment to become a major participant in the emerging global content business. To that end we should all support and encourage productions that not only express Canadian voices and choices for our domestic market but that reflect global entertainment values for an export market.

Advertisers also support universal choice. Today advertisers are seeking ever more narrowly defined target audiences for our various products and services. They require a depth and a breadth of choice in media vehicles in order to reach a variety of audiences. Most specialty services that have been licensed by the commission to date have been extremely well received and well supported by advertisers.

But there are yet some additional opportunities for new services to deliver other markets to us. What we are looking for in particular is local television services. These have suffered in recent years because many conventional broadcasters are looking for regional status. Today almost all stations in Toronto, for instance, cover most of the province of Ontario, with very little inventory available for local advertisers. In most markets in Canada, new, truly local conventional stations would be most welcomed by advertisers.

Advertisers also favour universal access to broadcasting. We believe that all television and radio services should permit, and indeed would benefit from, commercial advertising. Therefore, any and all newly licensed services should be advertiser supported.

¿ (0920)

Mr. Robert Reaume (Vice-President, Media and Research, Association of Canadian Advertisers): This advertising-supported example should extend to the CBC as well, we believe. Advertisers have always supported the CBC, and we are proud of the role we have had in its success. Advertising support of the public broadcaster allows governments to be fiscally prudent while still advancing public policy goals.

CBC television, both English and French, currently supplies substantial amounts of commercial inventory to the advertising marketplace. Some have suggested that CBC-TV should reduce its reliance on commercial revenues, currently at some $350 million per year. This would greatly reduce necessary and healthy competition and should not be seriously contemplated. In our opinion, there are currently not enough conventional outlets operating, especially at the local level, to safely replace this market inventory. Without replacement inventory and adequate competition, the cost of TV advertising would be driven up, and advertisers would naturally divert some portion of their spending to other less costly media. This would only serve to diminish overall advertising funding and would end up weakening the broadcasting system.

We also believe that this commercialization policy should be extended to CBC Radio. Currently totally non-commercial, CBC Radio represents a direct out-of-pocket expense for the Canadian taxpayer. Many unique, desirable, and commercially viable audiences are generated by CBC Radio, audiences that could be easily monetized to help contribute to the achievement of the public broadcaster's goals. This need not necessarily be traditional 60-second intrusive advertising, by the way, but rather simple corporate recognition spots, as are employed, for instance, by National Public Radio in the U.S.

Mr. Ronald Lund: In conclusion, advertising represents, as we've hoped we've demonstrated to you, a critical element and performs a crucial role in supporting a vibrant and healthy broadcasting system in Canada.

It is the financial strength provided by our industry that has built what we have today. Advertising makes a significant economic contribution to our country. Advertising pays for the content, the shows that entertain and inform Canadians. As such, it is important that it remain an effective marketing tool for advertisers--competitive, uncluttered, and efficient. Accordingly, we support universal access to broadcasting and choice. We advocate that any and all newly licensed services should be advertising supported. Finally, we propose that an advertising-supported CBC Radio could greatly benefit that service, as well as the Canadian taxpayer.

Your committee has undertaken a task of reviewing the efficacy of the Broadcasting Act, but if there were no advertisers, there would be no need for the act. Advertising is the essential ingredient and the guarantee to Canada's broadcasting vitality.

With the continued marketing effectiveness of the television and radio media, the financial foundation of advertising, and the innovative and creative talents of so many Canadians, together we can continue to build a broadcasting system in Canada that will meet the needs of the 21st century.

We do wish your committee well in your deliberations, and we thank you for the opportunity to contribute today. It is our hope that your efforts will benefit all Canadians.

We would now be pleased to take any questions you might have.

¿ (0925)

The Chair: Mr. Lund and colleagues, I think you've put your case for advertising very concisely, yet extremely clearly. So we certainly got your message.

Before I go to a colleague for questions, I'd like to ask, for our research team, if you look at page 4, under “Advertising's Essential Role in Canada's broadcasting System”.... This is the brief from the Canadian advertising industry. If you look at the bottom of page 4, where you referred to various statistics and percentages, there's reference in your end-notes to items vii and viii, the latter of which refers to the Television Bureau of Canada, CBC, the CRTC, and Statistics Canada. Because I suppose you got to these figures by using various statistics from four or five different sources, it would really help our research team if you could get us some material, a breakdown, so that our research team can follow the figures more clearly.

Mr. Robert Reaume: We'd be happy to send that to the committee.

The Chair: If you could send that to our clerk...thank you very much.

[Translation]

These are percentages and numbers we would like to have.

[English]

Mr. Abbott.

Mr. Jim Abbott (Kootenay--Columbia, Canadian Alliance): Well, thank you very much. As the chairman has said, you've made a very concise presentation. I think I'm probably going to leave the question of commercials on CBC Radio to others. I'll leave that one alone. You know, I will admit that one has crossed my mind and stayed there for all of a nanosecond.

I would suggest--I really don't want to be aggressive or controversial, so please--

Some hon. members: Oh, Oh!

Mr. Jim Abbott: It seems to me the advertising business is part of a serious problem that we have in Canada, which is local access. When we were at A-Channel in Edmonton, for example, all of us, I think, were exceptionally impressed with the fact that this channel had the ability and the reach of really letting Edmonton see themselves on TV. They have an awful lot of local content, a tremendous amount of local content. They outdo CBC, and they certainly outdo CTV and Global in that respect.

When I asked the question, “Because you are doing such a great job of giving local access and telling local stories, you must have access to local advertisers”, the answer was, “Well, yes, perhaps we do, but the media buys actually happen in Toronto”. That's the backbone of how A-Channel in Edmonton--and in Calgary and other places--which is trying to do a good job of local reflection.... The reality is their hands are tied. In other words, shouldn't they be able to get out to the local market?

Then I take a look at something I've been after the Canadian Association of Broadcasters about, the fact that you have a consolidation of ownership, particularly of radio stations in rural areas, that comes about as a direct result of the fact that with the consolidation, the advertising agencies, which are looking for the best audience they can get, can go to a seller of radio time. And if the advertising business were told, well, for so many dollars a minute--or whatever the case may be--they could be on a radio station in Revelstoke, or on a radio station in Sydney, Nova Scotia, but here's a whole package.... The whole point of the consolidation of radio has been in response to a demand, a squeeze and a pressure, from advertisers in Canada.

So I would suggest to you that it's the advertising business in Canada that demands these major buys in both radio and in television, that you are a serious part of the reason we have the consolidation, and very simply, the broadcasters are responding to your pressure to the detriment of local access to radio and television in Canada.

¿ (0930)

The Chair: Is that a statement or a question?

Mr. Jim Abbott: Well, I'd like their response.

Mr. Robert Reaume: Mr. Abbott, we're talking about sales here. I guess broadcasters will tell you that pressure from these large Toronto ad agencies has forced them to consolidate so that they can offer one-stop shopping, efficient buys, etc. Of course, this is all very welcomed by us, but it does not stop any station in Revelstoke, Sydney, or anywhere else in the country from walking down Main Street and stopping in at the local pizza place and saying, do you want to buy a radio commercial? I mean, it's a false argument. There's nothing stopping these stations from developing their local sales.

Mr. David Harrison: Could I just add something?

I would say in response that it sounds to me like we're doing our job well, because our job is to try to increase the efficiency of our clients' expenditures to the maximum possible. That is our job. We are charged with doing that. The fact that we have consolidated purchasing, agglomerated in larger groups, is really in response to the fact that the media have agglomerated into larger groups. That's a fact.

If we were meeting here 10 years ago, we might have had 30 media groups to deal with. Today, we might have 10 media groups. So the only choice we have is to try to combine our market power to effect reasonable and efficient buys.

Mr. Jim Abbott: In my hometown of Cranbrook, I wonder how the small merchants are making out against Wal-Mart. In other words, what we're talking about here is the drawing together.... I would suggest, with the greatest respect, that the backbone, the major portion of the support of a television station, comes from these massive media buys. This ends up, I suggest, working against the interests of attempting to reflect the smaller towns.

My Wal-Mart reference is very simple. People go to Wal-Mart in Cranbrook or any of the other smaller centres--it's an area population of 25,000--quite frankly to the detriment of the smaller merchants. So the smaller merchants have to find methods of selling their goods or services in ways that are going to continue to attract business. And that's business. I'm not opposed to Wal-Mart. I'm saying that's business. But I am suggesting, in the context of public policy--which is where this committee is trying to get to--that the advertising business has contributed aggressively. It becomes a chicken and egg thing, whether there was a conglomeration of the media in response to the advertising, or the advertisers are selling to the media because they can conglomerate it.

Mr. Robert Reaume: May I add briefly to this? We're not here to cast any aspersions on any other group, but I suggest that a purchase from a big Toronto advertising agency is easier for the broadcasting groups than going out and developing local business advertising. So some of that responsibility has to lie with them. It's easy money to get an order for $350,000 from Toronto rather than make 50 calls locally in order to match that figure. So we're not going to apologize for the efficiency of running our business.

¿ (0935)

Mr. Jim Abbott: One quick question. You were talking about Canadian content. I'd like to understand your presentation a little better. It seems to me that advertising is ultimately what freedom of choice is about and what entrepreneurialism is about, what capitalism in Canada is about, as is your choice in talking about business opportunity, universal choice, and so on. But then you talk about Canadian content. Is it your position as presenters that we should be setting some kind of Canadian content requirement on advertising? It seems to me that advertising, of all things, should know the distinction between Arby's, Wendy's, and McDonald's. It is something you do by choice, and you get to sell on the basis of your skill at making the distinction between those three fast food chains.

Are you suggesting we should be looking at possibly recommending that there be some kind of Canadian content to advertising?

Mr. Ronald Lund: Absolutely not.

Mr. Jim Abbott: Okay, thank you.

Ms. Sunni Boot: Perhaps I could add to that. We believe Canadians have a tremendous history of developing content for the global marketplace, but it isn't something we can mandate in terms of hours. What we're looking for more is encouragement. We have an excellent track record of that, in terms of children's programming, documentaries, and so on. What we would like to see is an encouragement to increase that so we can compete as a global industry, because the time now is right to do that.

Mr. Jim Abbott: Might I quickly ask what you mean by “encouragement”? Is it some kind of tax break, some kind of tax credit? What are you talking about in terms of encouragement?

A voice: The whole thing.

Ms. Sunni Boot: Yes, exactly. It's combinations of various components at your disposal to encourage it. But we would not suggest that there be any regulation in terms of hours of content or dollars.

[Translation]

The Chair: Ms. Gagnon.

Ms. Christiane Gagnon (Québec, BQ): [Editor's Note: Inaudible]…Advertising promotes cultural values and it should be considered as Canadian content. If it were considered as such, advertising would then be subject to CRTC’s rules on Canadian Content according to the Broadcasting Act.

I would also like to hear your opinion on the subject. Consumers would like to see fewer commercials. They are bothered by advertising. They do not like to be shown commercials on random products while deeply involved in watching a movie. How does one find a middle ground between these opposite views.

[English]

Mr. Robert Reaume: The movie itself would not have been brought to you without the contribution of the advertising. This is a pact--a contract, a bargain--whereby you get an hour program in exchange for listening to some commercials.

I suppose we could deliver those movies to the population on a pay-per-movie basis--and we do have channels in this country that do this--but it has been proven that their penetration is quite limited. In fact, the population has now and has always had an interest in free television, ever since 1952 when it started.

Mr. David Harrison: Last evening, we were actually trying to give some dimension on what the economic value of advertising is to the household. A rough estimate is that about $1,000 worth of television is being provided by advertising for every household in Canada. If you take the amount of money spent on television advertising and divide it by the number of households, the value of that advertising is roughly $1,000 per household.

So if you took advertising away from the system, you would have to find $1,000 from each household to support the programs people want to watch.

¿ (0940)

[Translation]

Ms. Christiane Gagnon: I am well aware of the impact. I know on one hand, advertising pays for television programs. On the other hand, is it OK to have this much? As a consumer, I find too much advertising creates a lack of interest, achieving exactly the opposite of it’s primary goal. One even ends up thinking: “No, not this product again!” That is just one opinion from a television and radio listener.

Before you answer, I would like to ask a second question.

Could interactive television help advertising? During commercials for a given product, could interactive television, for instance…? It’s obvious how advertising works. We are only fed whatever message is intended by the advertisers explaining the pros of a product when sometimes we would like to know more about the cons of using such a product. With Interactive television’s coming of age, could we envision such a thing? For instance, would we be able to know about the consequences, the impact of using a given product? It is sometimes useful to get a bit more information than what is volunteered since advertising is essentially commercial in nature. Its ultimate goal remains to convert one more consumer.

[English]

Mr. Ronald Lund: There are two things. First of all on, your first question about clutter, our perspective is that in fact there is too much clutter on television. We believe the 12-minute limit, with all the exceptions we have given to broadcasters, is in fact in excess. We continually monitor to make our case that too much clutter is diminishing the value of the medium for us. You would not get a major disagreement from us on this.

In terms of interactive television, the jury is still out. I don't know very many homes that have it. There is some potential in this vehicle because of the greater involvement it allows and the possibility of having a dialogue with the consumer. This would make the value higher.

Sunni, do you know of any tests anywhere in the world? It's early days yet for interactive television.

Ms. Sunni Boot: There are some tests around the world, and actually even in Canada today. I believe CHUM is one group testing some form of interactivity, and possibly one of the Rogers stations is doing it as well.

The jury is still out because it is relatively new. But optimistically, it should enhance the system for both the consumer and the advertiser. The idea is that consumers who are very interested in something--say they are cat or dog owners, for example--can interact with the system to get knowledge about new products for their pets. They will be far more interested in having this conversation, while for people without pets it would be just an annoying commercial. So there's hope for it, but it's still too early to tell at this stage.

The Chair: Thank you.

Mr. Mills.

Mr. Dennis Mills (Toronto--Danforth, Lib.): Thank you, Mr. Chair.

Do you have any concerns about the rapid takeover of most of our major Canadian advertising agencies by foreign operations? Does that concern you at all?

Ms. Sunni Boot: It's the global protocol. It really is what is happening. Advertisers are becoming global. They are seeking consistency throughout the world, so advertising agencies--because basically we're in a service business--are responding to our clients' needs. They are saying, we have a brand, that brand has really the same personality, and we really want a universal commonality.

¿ (0945)

Mr. Dennis Mills: Well then, my next question would be, what about the manufacturing of commercials in Canada, which is also on a downward trajectory and has been for some time. Does that concern you at all?

Mr. David Harrison: Well, it does, and in fact a little later in the morning I'll be sitting in on another panel, where that issue is to be discussed. But yes, it is a concern.

Mr. Dennis Mills: What do you do about it?

Mr. David Harrison: To be honest, we're not entirely sure, Mr. Mills.

Mr. Dennis Mills: For me it's a pretty scary thing because I see you slipping away as vehicles or instruments of our sovereignty. I see all these big numbers you're talking about here today, but I think it's like a Trojan Horse. Through the vehicle of advertising I see this great industry we used to have, where we had the skill of men and women making and manufacturing ads in Canada. Now we're essentially a paper-writing mechanism in the advertising system across Canada.

I wish that in your presentation you could have maybe touched on that in a more direct way, because even though most of your advertising members are owned by foreigners, I still think this is a committee where we're trying to be supportive and helpful of the industry. We should put the X-rays on the table and see if there is some way, through the leverage we have as a government, we could make recommendations that would try to rebuild some of that lost ground we've seen in the industry over the last ten years. I'm really concerned about this.

Now, the next point--

Mr. Ronald Lund: Mr. Mills, I'd just like to interject for a second. We share your concern. Again--

Mr. Dennis Mills: Why wouldn't you put it in your presentation?

Mr. Ronald Lund: Because there's another group that is addressing this particular point.

To your point, though, there's one thing we should feel proud about. We actually have an excellent infrastructure in the Canadian advertising industry; notwithstanding the agency side, we have an incredible body of performers who give us top-notch performances. We have incredible post-production facilities. In recent negotiations with the performers' union, both parties strove to look at ways of taking costs out to make us more competitive. One of the things we're finding now is, if we do become more competitive--and again, the next panel will address potential ways of doing that--we'll find that we'll be able to export some of our commercials. There is some good potential.

Mr. Dennis Mills: I totally agree. I'm well aware of the industry. I spent a lot of time, as a couple of you know...that's how I came to Ottawa. When I first came here in 1980, we used to hand out approximately $90 million a year to Canadian advertisers. We were very sensitive about whether those firms were Canadian. Obviously, free trade has changed that, and we can't be as sensitive. We made sure those commercials were manufactured in Canada. We were very focused on making sure the infrastructure was built in Canada--and it is world class, which leads to my last question.

Ms. Boot, you talked about this global mandate, which we're hoping to be a part of. Do we have any concrete examples right now of organizations that are based in Canada--that are foreign owned, obviously--and that have received a world mandate for manufacturing commercials for a global corporation? Could you give me three or four examples of some commercials that are made in Canada and that have the global mandate?

Mr. Robert Reaume: One example that comes to mind is the Geoffrey Roche agency from Toronto, who got the IKEA account in Germany. They serviced the account from Toronto via the Internet, produced their TV commercials on Lake Ontario, which was supposed to replicate a German scene, and all that business came to Canada.

Mr. Dennis Mills: Could you give me a couple more?

Mr. Robert Reaume: We can get back to you.

Ms. Sunni Boot: Leo Burnett Toronto was assigned Cheer, the detergent from Proctor & Gamble, to handle on an entire pan-zone basis, which was really a major breakthrough for a company like Proctor & Gamble. We can certainly provide more.

¿ (0950)

Mr. Dennis Mills: That would be helpful.

Thank you, Mr. Chairman.

The Chair: Ms. Bulte, and after your questions, we'll suspend.

Ms. Sarmite Bulte (Parkdale--High Park, Lib.): Thank you very much.

Thank you very much for coming. Unlike Mr. Mills, I don't know a lot about your business, so thank you very much for coming and teaching me a little bit about it.

I want to talk about a couple of things. I want to follow up on the global side. When questioned by Mr. Abbott you talked about tax incentives. You haven't spoken about...I believe it's subsection 19(1) of the Income Tax Act and what is or is not deductible for the purposes of advertising.

I want to follow up as well on where you stand with the GATT. When you're speaking about globalization, does your industry feel this is something you want to take on as obligation? With the magazines, we claimed advertising was not a service we had taken on as an obligation under the GATT, but the Americans still got us under NAFTA. I'd like you to comment on that.

Then I also note Mr. Mills said you hadn't addressed something; I notice you didn't address it either in your paper or your speech. The CAB, as you know, was before us and was asking that we look at lifting the restriction on advertising drugs. Of course, we all laugh at the Viagra commercial we see on TV. We know there's a battle going on with Health Canada, according to what you read in the media. They claim--I may have the figures wrong--that the lifting of this ban would result in anywhere from $240 million to $245 million in sales. Could you comment on that? Do you agree with that comment?

Last but not least, again you were talking about the encouragement of Canadian content. I'm not aware...is there something your industry specifically does to support or promote Canadian content in its cultural objectives? What I mean by that is the cable industries, through their broadcast undertakings, contribute to the Canadian Television Fund and things like that.

Thank you.

Ms. Sunni Boot: There were a number of questions. So why don't you--

Mr. Ronald Lund: I'll start off with one.

There was of course Bill C-55. You may or may not recall--you were there; Ms. Lill was there--we actually supported what was, in the original Bill C-55, to be taken off the table. We in fact believe in an open market. I think everything we said--that the walls weren't going to come tumbling down, there was no Armageddon--in fact has proved to be true in the magazine industry. There has been no onslaught of foreign publications, more particularly American publications, skimming off the top of the Canadian magazine industry. So our perspective is certainly not protectionism in that regard.

In terms of your first question, which was section 19 of the Income Tax Act, we believe that in fact--and we haven't pushed this yet--border stations should be deductible. They are currently not deductible, which is quite an anomaly considering that we can now deduct up to 50% if there is zero Canadian content of foreign magazines. That's an anomaly within our tax situation, and we think it's something that should in fact be corrected, because it does keep the competition out.

That's for those two questions. If you want to--oh, I'm sorry, the drug one.

We support the drug position 100%. I don't know if their numbers are 100% right. It's not only income, however, that's important. Studies have found that the whole system's costs go down when there is advertising. People self-diagnose. Does that mean they can give themselves prescriptions? No, it doesn't. They still have to go to the doctor for their prescription, but it gives them self-awareness.

The other key benefit, again, outside of the advertising that would be derived and contributed to the industry, is that compliance with taking your drugs to the end or forever is significantly increased. So while prescription costs could go up immediately, and that's obviously what this communications strategy is designed to do, if you open up prescriptive drug advertising, the system costs of people being helped here, understanding what's happening with their bodies, going to the doctor--and maybe the doctor says, “No, there's nothing”--reduces dramatically the health care costs for the total system. I think that's something we have to look at.

Ms. Sarmite Bulte: I have one more question on the--

¿ (0955)

The Chair: I'm sorry, Ms. Bulte, we have to suspend at this time. We'll resume just after the statement. It won't take very long.

¿ (0955)

À (1026)

The Chair: I would like to resume the meeting where we left off, and I will turn to Ms. Lill for questions.

Mr. Ronald Lund: Mr. Lincoln, we did have one last--

The Chair: I know, with Ms. Bulte. We'll wait for her to come back.

Ms. Sunni Boot: Okay.

The Chair: I appreciate that.

Ms. Lill.

Ms. Wendy Lill (Dartmouth, NDP): Thank you. Sorry about that interruption, but I think it was an important one.

I was very interested in some of the facts a member across the way mentioned, about the increasing control of advertisement by other than Canadian companies, and I want to ask a question about the content of ads.

We have heard in many ways and from many different sources that what people see on TV does not reflect the reality of their lives. If you're a person with disabilities in this country, you do not see yourself either in the programming or in the advertising. If you're an aboriginal Canadian, you do not. If you're a Muslim Canadian, you don't. If you are poor, you don't. We don't see ads about people at food banks. There are many qualities and realities of Canadian lives that we don't see on our television sets, and that's certainly a big concern of the broadcasting study, how Canadians reflect the real reality of life to Canadians.

I know this might be an odd question for you, because you are in the business of selling products, and there are millions and millions of Canadians who can't afford many of the products you're paid to sell, but what kind of initiatives are you using right now to try to normalize somehow the messages that people are getting in their advertising, in their programming? How are you trying to make it more reflective of people's lives, given the fact that your ownership is now moving further and further away from Canadian reality and not any closer?

Mr. Ronald Lund: There is an initiative by a joint industry group, called Advertising Standards Canada, and the initiative there is in fact to promote the use of different cultures across Canada, gender, and so on. It's something we're all aware of. It's something that I think, if you look back over the years, is significantly better than it once was, but I don't think anybody at this table would disagree that it has a long way to go. We believe in it, and we certainly counsel our members to do that, because obviously if they reflect their consumers and their consumers' beliefs, they'll have a significantly better opportunity in making the persuasion perhaps to buy the product or what have you.

It's something that is better, but it's not where it should be yet.

Ms. Wendy Lill: It has recently been suggested to this committee that late-night infomercials should be considered Canadian content. I'd like your opinion on that. I think it's pretty controversial, and also the idea that news updates are being used to include advertising clusters as Canadian content. In your opinion, is this legitimate Canadian content?

À (1030)

Mr. Ronald Lund: Well, it is. The thing we don't have a pat answer for is what the value of that Canadian content is. We think it should be valued at something. I don't want to give examples, but something that we can look at and all make a judgment that it is really good, hitting at the core of what being a Canadian is. That should have one value. Something else...while it does reflect potentially some values, maybe that infomercial should be something less than that. What that is, I don't know. It all has a value. I just think we'd have to determine what the individual values of the various infomercials and so on were.

Ms. Wendy Lill: There are people here, coming after you, who represent the writers and the actors in this country, and I'll be interested in asking them the same question. They're certainly making a living through advertising, but whether they would actually call that Canadian content and want to see that as Canadian content, we'll be very interested in hearing.

The Chair: I assume you have a reply for Ms. Bulte.

Ms. Sunni Boot: Yes, I'd be delighted to reply because I think she asked the question of me.

What we were referring to, and it builds a bit too on your question as well, is Canadian content programming. The basis for this is that very good content will attract a large audience and advertisers will follow. Basically they're following audiences and eyeballs. We believe we do have an opportunity. There has always been some form of Canadian content within the Broadcasting Act, but really what we're looking for is an opportunity to provide encouragement, maybe through incentives and supports that will assist the production of Canadian content. When done well it's a great business success story, from film to television broadcasts and certainly radio broadcasts. So that's really the basis of our comment.

The Chair: Monsieur Duplain.

[Translation]

Mr. Claude Duplain (Portneuf, Lib.): I have questions. The bill that we will review is also concerned with community TV and radio. What kind of impact do you foresee for community TV? What do you believe will be the regional impact of your commercials? I would like to explore a concrete example such as independent community TV stations that do not benefit from advertising subsidies. I would like to know your opinion on the matter.

[English]

Mr. Robert Reaume: Could you give an example? I'm not sure what you mean by independent community TV stations not being able to accept advertising.

[Translation]

Mr. Claude Duplain: My region has several small community television stations that do not depend on cable companies. They can instead play commercials in order to get sufficient funds to cover their local service offering.

[English]

Mr. David Harrison: I think you're referring to something similar to channel 10 in Toronto. I think we would take the view that any broadcasting activity should be open to commercial support. That would be our point of view. Of concern to us is that there is an increasing amount of television viewing in this country that is not open to us and available to us to advertise in. In fact, about 30% of the television viewing in Canada is not available to us to put commercials into. This would be in conventional American television, or specialty television, or pay-per-view television. For television to be a successful medium, we very much need to have access to all the eyeballs. We can't afford to buy them all the time, but we need to have access to them for it to be the most efficient market.

In that connection, I would say there's discussion probably at this table that perhaps the CBC should have no commercials. That would add about 7% to that number. We would then be close to potentially 40% of television viewing in this country not available for commercial exploitation.

It's a long way around answering your question, but in principle we believe there should be the ability of commercial support for local community television services.

À (1035)

The Chair: Are there any more questions of the witnesses before we pass on to the second group?

If not, I would like to thank you very much for appearing. We appreciate your presence and your answers.

Mr. Ronald Lund: Thank you.

The Chair: Mr. Reaume, you will be sending that information to the clerk?

Mr. Robert Reaume: Yes, indeed, I will.

The Chair: Thank you.

I will now call on Concerned Children's Advertisers. I believe, Ms. Boot, you will stay with us for the second part?

Ms. Sunni Boot: Yes, I will, Mr. Lincoln.

The Chair: We also have Ms. Cathy Loblaw, the president and CEO; Ms. Linda Millar; and Patti Manna.

I will also call on the Media Awareness Network--Alan Mirabelli, vice-chair, and executive director, administration, communications and information, Vanier Institute of the Family; and Jan D'Arcy, co-director.

Mr. Al MacKay, from Media Awareness, won't be with us.

I would like to welcome Concerned Children's Advertisers in the person of Ms. Cathy Loblaw, the president and CEO; Ms. Sunni Boot, vice-chair of media; Ms. Linda Millar, director of education; and Ms. Patti Manna, director of children's media.

Ms. Loblaw, the floor is yours. I understand you have a TV presentation.

Mrs. Cathy Loblaw (President and CEO, Concerned Children's Advertisers): We have some remarks we'd like to share with the group today, and then we've prepared a four-minute tape that includes comments from parents, from educators, and from children, which we hope will add some value and contribute to our discussions today.

Thank you very much for giving us the opportunity to be here. We hope our comments will add value and that we'll be able to answer your questions.

I'd like to take a minute to tell you a little about who we are. Following that, Sunni will talk about children and media. We'll talk about media literacy education, and we will close by offering some thoughts for your consideration within your deliberations and review of the Canadian broadcast system.

Let me begin by saying that Concerned Children's Advertisers is a non-profit group made up of 26 Canadian companies supported by over 40 partner companies who work together to address media and life issues that affect Canadian children. We were founded in 1990 and were established to create a collective, accountable, credible, and caring voice to make sure we were actively working toward 1) ethics, responsibility, and accountability in marketing practices to children; 2) to grow and maintain a vibrant, viable Canadian children's television landscape that would contribute to making each child's TV time as safe, enriching, age-appropriate, informative, and entertaining as possible. Of course, most importantly, we aim to contribute to the well-being of Canadian children to make sure that through the development and delivery of social initiatives we are helping them to better deal with issues of challenge in their lives both on the media side and on the life side, be it substance abuse prevention, bullying, self-esteem, child abuse prevention, and so on. Every year we address new issues of relevance and challenge for Canadian children.

Over the past 12 years we've worked very hard to try to honour these commitments and to deliver work that benefits Canadian children.

I'd like to start by taking a moment to look at what we mean by ethics and responsibility in advertising and marketing practices to children. The Canadian system has been in place since 1972 and has resulted in a responsible and effective system that is highly regarded around the world. Canada has established a system that both protects and respects the child audience. Currently, this system of safeguards is centred around a self-regulated code and media literacy education that has been the model around the world.

As you know, the broadcast code for advertising to children is the backbone of responsible advertising to children in Canada. This code recognizes the developing and, at times, vulnerable characteristics of the child audience.

It is a very specific code of standards that says what can and cannot be said when speaking to children. It explains that price and purchase terms must be clear and easily understood by a child. You cannot ask a child to buy a product or ask a child to ask a parent to buy a product. Characters well known to children cannot handle, consume, mention, or endorse in any other way the product being advertised. No product comparisons can be made, even if the comparisons are true, because it may make a child feel that last year's products are not as terrific as this year's products. Products can never be shown in unsafe situations or in a dangerous manner, and the product results that you see in a commercial must be achievable by the average child.

Of course, Canadian social values must be observed. Children's advertising must portray a range of values that are consistent with the moral, ethical, and legal standards of contemporary Canadian society.

Of particular importance is not only the content of the code, which is very specific and very relevant to the child audience, but it is the regulation and the application of that code. In addition to the content, the code also regulates the amount and scheduling of children's advertising. In programs directed to children, broadcasters can air no more than four minutes of advertising per half hour to a maximum of eight minutes per hour, as opposed to twelve minutes plus in adult programming.

Additionally, advertising is not permitted in pre-school programming, and there are even times of the day, such as during school day morning hours, when no advertising to children is permitted.

À (1040)

Administered by Advertising Standards Canada, a children's committee has been created that includes parents, educators, regulators, broadcasters, and advertisers who meet every other Monday morning to view every commercial directed to children in Canada to be sure it adheres to the standards of the code. If the commercial meets the standards of the code, it's given a number and it can run on Canadian airwaves for a period of one year. If the commercial does not meet the code, the commercial cannot run in Canada and does not run on Canadian airwaves.

In addition to the broadcast code for advertising to children, the advertising industry also has in place the Canadian Code of Advertising Standards, which contains two clauses--12 and 13--specific to all advertising to children. These clauses state clearly that advertising directed to children must not exploit their credulity, lack of experience, or sense of loyalty, and it must not present information or illustrations that might result in their physical, emotional, or moral harm.

It's also important to note that it only takes one complaint to trigger a complete review of any advertisement.

Thanks to this Canadian system of accountability and responsibility, we have achieved a very strong record of responsible advertising practices that respect and protect the child audience in Canada. It is one of Canada's great success stories.

I'd like to turn it over to Sunni for a moment, who will speak with you about children and television.

Ms. Sunni Boot (Vice-Chair, Media, Concerned Children's Advertisers): Thank you, Cathy.

I'd like to echo Cathy's comments and really applaud the Canadian government and industry for working together to achieve such an effective, respectful, and responsible children's advertising marketplace. When we stop to think what we have accomplished, I think you'll see that we really are a very respected model, and in fact we are a role model for the world. That's a very good Canadian success story.

Now, let me tell you about children and television. Certainly, I don't think anyone would argue that television has become an integral and everyday part of children's lives since the broadcast of Canada's very first child television show, which I recently learned was a program called Pépinot et Capucine. It ran in Montreal in September of 1952. This was quickly followed by the first English children's television program, called Uncle Chichimus, and it was actually produced by the famed Norman Jewison, who was the original producer. So again, there's a strong heritage in everything we have.

From those early days of a single program offering, we're here fifty years later. In that time the landscape for children's programming has steadily blossomed. We had eight hours per week in 1950, we had 163 hours in 1980, and today we have over 455 hours per week of children's programming. The Canadian children's television landscape is another wonderful success story because it has quality, it has quantity, and it has very age-appropriate programming available to children.

Along with our offering the programs, children have been viewing more. In fact, steadily over a number of years children have been watching about sixteen hours of television a week. What's really important is not so much how much television they're watching but how they're watching television, because that has changed. Just as with adults, they have so many media options.

More than a third of Canadian households own at least three television sets, and 57% of children between the ages of 8 and 16 have a television set of their own in their bedroom; 36% of them also have video-gaming equipment; 32% have a telephone; 30% have a VCR; 20% have a computer; and 11% have Internet access, all in the privacy and control of their bedroom.

So children today are savvy; they're a very sophisticated audience. We know they're getting older younger. They outgrow things very quickly and are influential decision-makers in many homes and families. For the first time, if we stop to think about it, children are an authority in this new media world. Their position is so enhanced because they are technologically empowered.

The conclusion is clear: Canadian children today are plugged in and they're tuned in. They live in a multi-media world where multi-tasking is commonplace, and the traditional, passive viewer has given way to an active media participant, a participant who thinks nothing of watching television while surfing the net and talking on the phone, and they're doing this all at the same time.

The reality of this rich media environment for children clearly highlights our most important area of discussion and recommendation for you today: the critical importance of media literacy education for children. We must equip children with thinking-skill tools, strategies to be able to manage this media world they are so comfortable in.

What does it all mean for the Canadian broadcasting system? It means we have a child audience for whom television, as we said, is an integral and everyday part of their lives. Here is an audience who expects and in fact demands that we meet their viewing needs. But we must do that with quality, age-appropriate programming covering a broad range of interests, programming that is available during their prime viewing hours. It's an audience the Canadian broadcasting system has a critical responsibility to serve.

À (1045)

Serving this audience requires an appropriate balance of industry-driven and policy-supported initiatives that ensure the child audience of today continues to be served as well in the future as in the past.

In today's world, children are watching television on a daily basis. They're watching at younger ages and watching alone, more than likely, or unsupervised. They have access to an increasing number of programs--domestic and international--and they are frequently exposed not only to their own programming but to what other members of the family or friends are watching.

Overall, we--government and industry--have a responsibility to ensure the Broadcasting Act of 1991 continues to deliver on commitments that the Canadian broadcasting system should be varied, comprehensive, and provide a balance of information, enlightenment, and entertainment for Canadians of all ages. That includes children; we have to ensure we're looking after their interests and their tastes.

To that end, and based on our review of the Canadian television system from a children's perspective, we would like to offer this group some points for comment and recommendations for your consideration.

We believe that first, the self-regulated system of responsible advertising and marketing practice to children should remain as the cornerstone of responsible advertising practices to children in Canada, with the continuation of the Broadcast Code for Advertising to Children that Cathy outlined.

We should continue to support the application of the code through Advertising Standards Canada's kids committee--again, this is the one Cathy talked of--representative of parents, educators, regulators, broadcasters, and advertisers. The code, in its application, reflects the effective and responsible system that respects, protects, and serves the child audience.

Secondly, the new CRTC television policy of 1999 applauded the Canadian children's television landscape, recognizing the excellence of Canadian children's programs. We could not agree more.

In light of this, and given the current strength of the Canadian television system in serving children, the CRTC decided to remove children as a priority programming category, eliminated Canadian content incentives for children's dramatic programming, and removed special recognition of children's prime viewing hours as distinct from adult prime viewing hours.

While we agree with the CRTC that the current Canadian television system is indeed robust in offering children's programs today, I guess as we sit here before you our concern is that a significant part of what we've created, which is really so rich, might be jeopardized in the future.

With those policies removed, we see there's no longer the regulatory incentive or priority placed on children's programming and no recognition being given to children's prime viewing hours. That could have the potential, over time, of diminishing what we've built. We would encourage the committee to find ways to promote and establish policies and incentives that uphold the Broadcasting Act of 1991 and support broadcasters, helping to ensure the continued viability of child programming.

A third area for consideration is specific to the province of Quebec. Currently the Broadcast Code for Advertising to Children does not exist or operate within Quebec. We certainly would welcome the opportunity to work towards a system of ethics and responsibility that could better serve and protect the children of Quebec.

As you are no doubt aware, the province of Quebec has a ban on advertising to children, which has now been in place for some 25 years. What's interesting--and perhaps cause for concern--is that while the intention of the ban was to protect Quebec children, which we applaud, the reality is that in today's media environment the children of Quebec are exposed to even more advertising than children in the balance of the country, because it's not regulated and controlled.

Currently, children in Quebec watch 17 hours of television a week, which is just an hour more than their counterparts in the rest of Canada. What's interesting is they're watching more adult programming than they are children's programming. That exposes them to more messages per hour, because as you know, we're running fewer commercial minutes in children's programming.

À (1050)

So the children of Quebec are seeing advertising, but what they are not seeing is advertising in a controlled market regulated to be reflective of their language, culture, and standards.

Given the amount of television children in Quebec are watching, and the adult nature of the programming they are watching, we strongly believe there is an important and necessary place for a regulated and controlled system of responsible children's advertising in Quebec, combined with media literacy, education, and more child-directed programming.

I'm now going to turn it back to Cathy, who is going to speak to you about media literacy.

The Chair: Excuse me, Ms. Loblaw, I just want to know how long you will take so we can divide our time fairly among the witnesses and the members.

Ms. Cathy Loblaw: My closing comments will take about 60 seconds, and then we thought we would share the tape with you from Canadian parents, children, and educators.

The Chair: And the tape is about five minutes long.

Ms. Cathy Loblaw: It's four minutes.

The Chair: Yes, all right.

Ms. Cathy Loblaw: Our final area of recommendation rests with the critical importance of media literacy education for Canadian children.

While certainly the industry and government have worked together to achieve a strong system of responsible practices--quality children's programming, industry codes and standards in advertising, violence, and sex-role portrayals, to name a few--as well as the availability of filtering tools and technologies such as the V-Chip, the final and perhaps most critical component to completing the circle of support for Canadian children is media literacy education.

In today's global marketplace, where children are often interacting with media alone and exposed to media from around the world, we must teach children how to watch carefully, think critically, and navigate safely. We must give them the critical thinking tools to be able to make wise, healthy, and informed choices about the media and the advertising they are exposed to.

Children must learn that all media is constructed; they must learn to deconstruct the news, advertising, and programming, and develop an informed and critical eye when consuming the media. They must be educated with media literacy skills to be informed and safe.

And so, too, must we educate parents and educators, who in large part have the responsibility and daunting task of teaching a generation of children to be healthy and critical consumers in the media world children live in so easily.

Let's take a moment to look at the tape we've prepared to see what children, parents, and educators have to say. At the same time, you'll have a chance to see what the industry is doing to deliver media literacy education through a program created by us called TV and Me.

[Editor's Note: Video Presentation]

Á (1100)

Ms. Cathy Loblaw: Thank you. That concludes our remarks. We hope we'll have the opportunity to dialogue in questions with you and that we can reinforce the critical importance for all of us to work together for media literacy education in Canada today.

Thank you.

The Chair: There must be a call for a vote. I'm going to check on what the delay is; maybe it's a quorum too.

Meanwhile, we'll turn to Jan D'Arcy and Mr. Mirabelli.

Mr. Alan Mirabelli, (Vice-Chair, Media Awareness Network; Executive Director, Administration, Communications and Information, Vanier Institute of the Family): Thank you, Mr. Chair.

Unfortunately, our chairman, Al MacKay, had to leave earlier and I will speak on his behalf. Let me introduce you to our co-director and co-founder, Jan D'Arcy, and with us is Bill Allen, our senior staff person.

It's an honour for the Media Awareness Network to appear before you this morning and to have an opportunity to contribute to the committee's review of Canadian broadcasting. We believe this is an important process because of the enormous changes taking place in the media environment in Canada and around the world. Young people in particular have embraced the digital age without hesitation. They integrate all of the media into their daily lives, moving seamlessly across all platforms, from music to television, to video games to film, to the Internet.

While others are trying to work out the implications of how best to handle media convergence, the digital generation have made it their reality, and that challenges all of us, the media, legislatures, public policy-makers, and so on, as well as literacy organizations such as the Media Awareness Network, to adapt our way of thinking about the media and our approaches to handling media-related issues. We believe media literacy can and should play an integral role in meeting this challenge.

So where did the Media Awareness Network come from? It grew out of the CRTC's TV violence initiative in the early 1990s, but in a way that is quite unique and certainly different from the approach generally adopted by our American neighbours. One thing that sets MNet apart is that its approach is to educate. By media education we mean helping people to develop an informed and critical understanding of the nature of the media, the techniques used in creating media products, and the media's role and influence within society. In MNet's case the focus is on young people, so they can be savvy, effective, and responsible users of the media.

As the new digital generation takes the converging media and integrates them into their work, academic, and personal lives, policy-makers and media educators need to examine how this impacts our definition of what it means to be literate. The fact is that television productions, video games, or Internet sites and content, are now considered texts worth of study like books. That means we can and should educate ourselves about these other media, just as we have traditionally done with books, to understand how they are created, the ways in which they deliver information, ideas, and opinions, and the implication this has in shaping our understanding of the world around us and the views we hold.

At the outset, MNet adopted this broad educational approach to advancing media literacy, and that has been the underpinning for its success in becoming established as a leader, recognized at home and abroad for its pioneering work, especially in the field of Internet literacy. For example, MNet has recently been approached by a consortium of Nordic countries to serve as a role model in developing their approach to the Internet.

Another strength that supports MNet's work is the partnership model it has developed for the structure of its board and in delivering its programs to end users. For example, key user groups sit on the board, including the presidents of the Canadian Library Association, the Canadian Teachers' Federation, and the Canadian Association of Principals.

Á (1105)

MNet's board also has strong and committed participation by major media companies, such as Bell Canada, Rogers Communications, CanWest Global, CTV, CHUM, Shaw Communications, Telus, AOL, and A&E television networks.

Now I'll turn to Jan D'Arcy to talk about MNet's media education program, highlights of its groundbreaking Internet use, research, and some of the key trends and challenges on the horizon.

Ms. Jan D'Arcy (Co-Director, Media Awareness Network): Thanks, Al.

We host one of the world's most extensive online media education resources, which serves Canadian parents, community organizations, and teachers. Just to give you a flavour of what can be found on our site, we have a teaching unit called How to Analyze News, which offers students a framework for understanding how the news is constructed.

“White Screen: Absent Voices in the Media” explores the underrepresentation of first nations people and visible minorities in the media. “Gender Stereotypes and Body Image” demonstrates how media stereotypes can act as a kind of shorthand. Students explore “acting like a man” and “being ladylike” to see how these stereotypes can influence their own self-image, sometimes in unhealthy ways.

A few examples of our parent resources are: “How to Limit the Effect of Advertising on Your Children”, “A Practical Guide For Parents: Advertising, Nutrition and Kids”, and “Rules for Advertising To Kids - How to Limit the Effect of Advertising on your Children”, which was adapted from the CAB's voluntary code.

When we started using the Internet in 1995, we recognized almost immediately that we needed to develop the capacity to include Internet literacy in our program. In response, our internationally recognized Web Awareness Canada program, La toile et les jeunes, was launched well over two years ago. It struck a chord among educators and public librarians, who were preoccupied with wiring up to the Internet and unprepared for the speed with which kids would embrace this new environment. This program has been guided and supported through an extensive research project that our organization has developed, “Young Canadians in a Wired World”. It's a nationwide investigation of how Canadian youths use the Internet.

The most recent stage of this research was a school-based survey of almost 6,000 Canadian students, drawn from a representative sample across the country. Students aged 9 to 17 responded to 100 questions during supervised school time. Highlights of the initial findings from this study were included with our written brief to this committee. Today, we've provided the clerk with copies of the final report.

We'd be pleased to make a full presentation on this research at another time. However, today I'll just give you the barest of introductions to some of our findings.

To no one's surprise, we found that young Canadians are big media consumers. More than 80% of young people listen to music and watch television every day; 43% go online every day; 8 in 10 Canadian students have Internet access at home. Downloading music, e-mail, and surfing for fun are the top three choices of online activities for young people. The number one activity for 9- and 10-year-olds is visiting websites that feature their favourite TV shows. Three-quarters of students in our survey have one or more e-mail accounts. Many of them are unknown to their parents.

More than 50% of kids say they would give out their gender, age, name, and e-mail address for a chance to win an online contest. A quarter of kids have been asked to meet in person by someone they only know via the Internet, and 15% say they've actually gone on to meet that person in real life.

Based on this research, we've identified a number of trends on the horizon. I'll mention just a few today.

At younger and younger ages, many of today's children are consuming media, both online and off, whose boundaries of taste and values stretch far beyond those set by traditional media codes and regulations. This means we have to adjust our preconceptions of what we should be talking about to our kids and at what age.

Á (1110)

Building on the put-down humour of 10 years of TV sitcoms and cartoons and websites such as “Who do you want to kill today?” and “Die, you evil teacher”, hate is being normalized in many young people's cultural framework. More than 20% of the students in our survey say they've visited sites that are really hateful, mostly toward pop culture celebrities and ethnic and religious minorities. Sixteen percent of them say they themselves have posted hateful comments about a person or a group online. Anti-racism education has never been more important than it is today.

Branded communities for teens are increasingly common in cyberspace and are often linked to traditional advertising on television and through other media that target young people. We scarcely have a handle on the marketing potential of digital media.

To conclude, I want to leave you with a little anecdote about our focus testing we did some time ago with groups of people. We prodded the kids to find out their understanding about protecting their privacy in commercial online environments. They all knew that they should not provide information to win prizes or to enter a contest in a commercial environment. Finally, after prodding and prodding them, and just when the facilitator was about to turn the page to another topic, one little 13-year-old girl said, “Well, unless it's a brand that you know”.

[Translation]

M. Alan Mirabelli: Media education is thus clearly a cornerstone for maintaining Canadian leadership in the converging communications environment, culturally, socially and economically. All of us in this room have a vested interest in ensuring that Canadian families, particularly young citizens, are literate. And in the digital world that means more than basic reading and writing skills.

I believe we have to position media literacy in this country as a critical literacy to be integrated, as reading is, into all subjects across the curriculum and into our way of thinking about the media and their role in society. For this we’ll need to spearhead a nation-wide partnership program.

MNet representatives recently met with five of Canada’s top media educators and began what we are calling “the National Dialogue on Literacies for the 21st Century.

As I said earlier, we believe it is essential to have a discussion in this country about how public policy and approaches to media literacy should be re-thought in light of the tremendous changes talking place in the media, their role in society and the way in which young Canadians use them. Creating such a national dialogue and then acting upon its recommendations is going to need the involvement of governments, buy-in from Canada’s cultural institutions and media educators, and the power and influence of the media industries themselves.

Our core recommendation to you today is actually quite straightforward and stems from MNet’s pioneering work in media literacy for the digital environment. It is intended to position Canada and its public policy at the forefront of developments around the world. Put in its simplest terms, our recommendation to the committee is that it recognize, in its report and recommendations to the government, the importance of the media literacy and education to a healthy broadcasting system and, indeed, to Canadian society as a whole.

In terms of how best to accomplish this, whether by referencing media literacy education in the context of the Broadcasting Policy for Canada set out in the Broadcasting Act or as a separate policy statement by the Government, we would defer to the Committee’s expertise and judgment. We would, however, respectfully ask that at a minimum you urge the Government to continue its financial and public policy support of media education.

Thank you ladies and gentlemen.

Á (1115)

[English]

The Chair: Merci beaucoup, monsieur Mirabelli.

I think both your groups have raised very important questions relating to children and the young generation, who are of course the key to our future. I think this issue deserves time for us to question you properly. Unfortunately, as our world goes here, a vote has been called. I think there will be a vote at 11:25 or 11:30, so we'll have to adjourn to let the members go and vote. I don't know how long it will take. If it is just one vote, it usually takes about 20 minutes. We really want to hear as well from the Alliance for Canadian Advertising Tax Credits and ACTRA, who are coming afterwards, so perhaps a suggestion might be that we use this time in between to grab a bite and come back. That's up to you, but we should be back here by twelve o'clock, I would think, or maybe a little earlier. We'll be back as soon as the vote is over, which will probably be just before twelve.

[Translation]

We still have time for another question. Please go-ahead Ms. Gagnon.

Ms. Christiane Gagnon: Your conclusions are very interesting. As a parent, I can appreciate how TV is evolving and the kind of impact it has on our kids. Since our children are often alone in their room while viewing TV, it is important to have a good grasp of what programs and advertising is being broadcasted to them. Your comments and statements are very useful to us.

I would like to better understand the complaint process. It does not appear to be in line with your recommendations, as you find the process too slow.

I would like to gage the quantity and seriousness of incoming requests to the CRTC in regards to complaints on the regulations and ethics code for you to draw such conclusions. What makes you find the process so inadequate?

[English]

Ms. Cathy Loblaw: We are in fact very happy with Advertising Standards Canada, which is the body that administers the Broadcast Code for Advertising to Children and manages all the complaints through the CRTC. We feel the system is very responsive and very effective, and it very much meets the needs of Canadian parents on behalf of their children.

When we come back from the break, I can give you the exact numbers as Advertising Standards Canada tracks them, but my understanding is that in the last two years there have been zero complaints. I think about three years ago there were three or four complaints, for which the ads were reviewed and subsequent decisions taken.

In fact, I think the system that's in place is very strong for two reasons. One, it only takes one complaint to trigger a review. It doesn't require a movement to look at an ad; it takes one complaint, which is great. Second, because of the pre-clearance system that exists in Canada, nothing gets on the air that doesn't adhere to the standards of the code. We're not putting Canadians in the position of having to be responsible for making sure they're catching mistakes or catching problems. The Broadcast Code is very specific about what you can and can't say, and every commercial is pre-screened before it hits the airwaves. I think that's a big part of why you don't see a large number of complaints.

The third piece of it is that the committee that reviews the commercials in a pre-clearance format has on that committee parents, educators, regulators, and industry working together, so it is a very representative committee. I have a seat on that committee, and we analyse and discuss every commercial before it can run in Canada.

Interestingly, even if it's approved through the committee, it's only approved for one year because social standards, values, and issues can change, even in the area of safety. It is only allowed to run for one year, and then it has to be reapproved.

We feel very strongly that one of our core recommendations is that the current system that is in place should continue to be upheld and continue to be the backbone of responsible pre-clearance communications with kids so they are respected and protected and so the onus is on industry and government to get it right first, not on Canadians to have to be the watchdogs.

Á (1120)

[Translation]

Ms. Christiane Gagnon: I will pass my turn since we are short on time. Another Member of Parliament might want to ask a question. We can come back to it later.

[English]

The Chair: I think there's going to be five minutes between the votes. We'll start afterwards.

So we'll suspend and come back after the vote.

Á (1122)

Á (1156)

The Chair: The meeting will resume. I should advise you that, as you've heard from the bells, another vote has been called, a procedural vote. So we'll have to go and vote in 25 minutes.

Unfortunately, you can see how long these votes take, so I think what we'll do is finish the questions with you today. I feel almost a little shameful having to say this, but I think one of you in the last group was postponed before because of a vote. I think it was ACTRA.

A voice: Yes.

The Chair: I feel so very bad, but these are the facts of life here. We just can't anticipate these things; it's just procedure. I think one of the parties has called for a procedural vote, so we can't avoid it.

I understand from our parliamentary secretary that there will be other votes called today. So I think telling you to stay would be just wasting your time.

I would suggest we finish with this now, and if you don't mind, we will ask for your indulgence and patience again in having to come back. We're terribly sorry.

Ms. Lill.

Ms. Wendy Lill: I'd like to thank you all for coming. I'm hearing very clearly from the entire group of you that there are some very important Canadian initiatives going on now in terms of media awareness and protecting Canadian children with the media they're watching.

However, I'm also hearing some very disturbing things from Jan D'Arcy, and I'm stunned by the comment that hate is being normalized. It sounds like what we're seeing is that kids are consuming media online, much of which is completely beyond any kind of regulatory framework. So we're fighting an enormous battle against material from which we're not protected at all.

So I'd like you to talk about that. I'd like you to kind of brainstorm about what you see the future as, because we are trying to make a policy that is going to deal with the future. What we're already seeing, the tip of the future, is terrifying. It is not taking our children in the direction we want. Our children are in fact what this is all about--culture for the future, culture for the people who are coming next. I'm worried, especially by the fact that the audience you're talking about is a critical audience for the future, and we are seeing you in a tiny sliver of these very important hearings.

I wonder if we can try to address that, if you have any thoughts on how we can try to bring the balance back to where the audience should be and how we can make sure that what you're saying about children is going to be really prominent in the transcripts of these hearings.

Ms. Jan D'Arcy: I'd like to start.

Thanks, Wendy, for that question.

One of the most important points our organization has been making across the country to policy-makers and to library staff, educators, and parents is that because this new medium, the Internet, has come upon us so rapidly, and kids have internalized it and know how to use it, at some point, with the convergence of the traditional media and the new media, there has to be this recognition, which you've just mentioned in your deliberations, to think of the future. It's very important. I'm glad to hear you articulate that clearly.

When we were doing the research work, we started with a survey of Canadian parents. We did a half-hour telephone survey of just over 1,000 Canadian parents to ascertain what their perceptions were of what their kids were doing when they went online and what the importance of that technology was. Of course, education was right at the top of the list.

We went from there to a series of focus groups with kids in both Toronto and Montreal and looked at a huge range of questions and activities. We found some very interesting stuff out of that process. Out of it we clearly recognized that kids are not savvy about the media they consume. We think they're savvy and we use that expression. Technically they understand how to do things that many of the adults in their lives don't know how to do.

But just one example comes from the question on talking with strangers on the Internet and the kids' understandings of what was a safe way to be with strangers when they talk to them on the Internet. They all knew what the rules were and they all were very clear about how to do it. And then--again it was this group of young girls, 13 years old--one little girl said “Well, until you know you can trust a person.” When we asked how long that took, the answers ranged from 15 minutes to two weeks. This is a part of childhood our culture supports and nourishes, that kind of naivety of youth, that trusting approach. At the same time, we've taken great concerns to teach kids how to be street-safe. Parents don't understand that this is just another part of the world.

When you get the bridge between this technology and broadcasting and cable interests and you see how the traditional rules and regulations and acts don't cover those broad areas, the need for education becomes increasingly important. It's not just education in a quick or superficial or shallow sense; it's an education that has to be carefully developed and carefully integrated at the utmost level of respect into our system--not just at the school level but in our whole social framework. That's what we're talking about when we identify the need for media literacy.

Â (1200)

The Chair: Ms. Lill, do you have another question?

Ms. Wendy Lill: I guess the question is, simply put, in terms of dollars and cents, what kinds of moneys do you need to actually undertake the kind of comprehensive media literacy you think needs to happen at every level? And where should that money come from? Just lay it out so we have a real sense of what we're talking about here.

Ms. Jan D'Arcy: Shall I answer that?

Our organization began as an initiative of the National Film Board of Canada. We come out of government, out of the public sector. It was seen through a series of round tables the CRTC had set up that media education was a national initiative to bring together all of the happenings, including the Concerned Children's Advertisers' initiatives, under one umbrella organization, which is our mandate. It's very broad-based.

We were formed when the National Film Board downsized; we became a not-for-profit organization. We had no core funding when we started. Our organization still has no core funding, and it's an enormous challenge to maintain and build on the work that's desperately needed in this country.

Our hope is that recognition of the need for media literacy as a part of a healthy broadcast system is written into the act. That just helps position the case as we go to funders, to governments, to build our organization--and to do it with our partner organizations and the teachers' organizations and ministries and the community organizations.

Â (1205)

Ms. Cathy Loblaw: Just to build on Jan's comments, I'll point out that our funding comes from the private sector and from broadcasters who have made a significant funding commitment. Some time ago in CRTC policy they said that funding towards media literacy initiatives would be deemed as a good thing at the time of transfers of ownership through social benefits. It is the result of the social benefits that TV and Me exists. Our funding from Corus Entertainment, which is just under $1 million to deliver this program over the past two years and the next two years, is a direct result of policy that made social benefits a reality for so many organizations. The Media Awareness Network has benefited greatly from the social benefits, and so has CCA.

I also think it's a shared responsibility. It's industry support, it's government support, and it's setting funding to go with policy. One of the challenges for media literacy in Canada is that when you talk with many of the government groups and departments--and I'm sure between Jan and me we've spoken with them all--there is a lot of heart, a lot of belief, and a lot of support for the initiative, but there's no specific dollar amount allocated for it. There's a half a person a day in this department, and there are great policy intentions and objectives in another, but in terms of actual government dollars earmarked for it, they're hard to come by. We were fortunate in our early beginnings of media literacy that we worked with the Department of Canadian Heritage, and there was some seed money we were able to benefit from in terms of core, sustaining, or ongoing funding.

When you talk about funding, your point is really well made when you ask, how big is big? What's involved in going province to province across the country and delivering media literacy education at the elementary school level, at the high school level, and to parents and educators is astounding. Media literacy is now a mandated part of the core curriculum in most of the provinces across this country. The challenge educators have is that they don't have the Canadian resources and tools to be able to deliver on that. They don't always have the comfort level with the topics.

The Chair: Excuse me, but time is pressing. We've just had a call that we should be there. I'll just allow one question to Ms. Bulte, and then we can go.

Ms. Sarmite Bulte: Actually, I had a number of them, but first let me begin by thanking you for the work you are doing.

I have three children, and I have a 12-year-old still at home. I have to tell you, Ms. D'Arcy, listening to what you say is frightening. We were able to remove the TV from Alex's bedroom, but the Internet is certainly still there. It's quite frightening to think...not having the luxury of being at home and being there every night to watch what's going on and what's being e-mailed, I think it's really important, especially for those of us who do work outside of the home. For them it's an even bigger challenge.

With respect to media literacy, I really welcome, Mr. Mirabel, your comments about it being in the preamble. I wanted to ask you, is it really enough to be self-regulated?

With respect to Sunni, I wanted to ask you this when you talked about the advertisers. Some of the things we have seen are iCrave TV and Jump TV, which got many of the broadcasters up in arms because of their ability to put advertising on the Internet. Assuming they're not even cruising the net--which they are--has your group thought about how you're going to control that once the whole compulsory retransmission licence, which we're studying here right now, comes into being? Are you at least somehow going to be able to regulate that portion of the Internet, if not all of it?

I believe you said anti-racism education is more important today than ever. I applaud that. There are members in the House who believe that the whole multiculturalism portfolio is passé and that we don't need it any more. Again, I urge you to bring that message forward.

Ms. Loblaw, with respect to your video, I saw that Canadian Heritage should have a little signal there.

Just to address the other concern, I wish you'd make the comment that there's a problem in that there is no longer core funding. Part of the reason there's no longer core funding has been because of the cries from the members of the official opposition about how these portfolios are a waste of money, that you can't find any accountability, and that it's done project by project. It seems to me that, to the detriment of our children, we've fallen into worrying too much about damn accountability because we can't say how many children this is affecting. Maybe it's time we reconsidered all that policy, the justice issues and the crime prevention programs you have to be involved with in shouting that. So please help us; please bring out that message.

I don't think this can wait until our report comes out. I think we should be doing something about this immediately, and I will undertake it with our caucus and our minister.

Â (1210)

The Chair: Excuse me, Ms. Bulte. Ms. Lill suggested that if you were willing, and Ms. Gagnon said she could come back, if the witnesses don't mind, we'll just see how long the vote.... If we can accommodate people, let's try, and if we can't do it, we can't do it. Apparently there will be repeated votes, so we'll try.

Ms. Sarmite Bulte: Try to think of your answer.

The Chair: We'll suspend for now and come back after the vote.

Â (1211)

Â (1229)

The Chair: Other committee members will join us very shortly, so we'll resume the meeting. We might as well take advantage of as much time as we can.

Mrs. Bulte.

Ms. Sarmite Bulte: [Editor's Note: Inaudible]

Ms. Sunni Boot: You asked about the code. I'm going to let Cathy Loblaw address that because she's most conversant with it.

We will also try to provide maybe a little bit of understanding of funding, where we are with that.

Cathy, perhaps you could talk about the code outside of television broadcast.

Â (1230)

Ms. Sarmite Bulte: Perhaps each of you could address, when you answer the questions, and I think Ms. Lill asked it earlier.... This is very important. You always find things that are very important, and I think we need to get the message out to everybody--all parliamentarians--just how important this is, because while we may not fall within the--

The Chair: Perhaps you should save this for those who are coming back. We're illegal right now.

Ms. Sarmite Bulte: I'm sorry.

Just one final question that I would like you all to address in your response is, notwithstanding the fact that perhaps the funding as it is now available--there is no such thing as core funding available under certain envelopes. If there are some things of national importance--which I truly feel media literacy education is, and it's important to have all parliamentarians know how it is and that it's not something that's retro--could you please also tell us how much money is needed?

Ms. Sunni Boot: Hopefully, we've got some guidelines.

Ms. Cathy Loblaw: Maybe I can start with two points.

I think one of the key points to make is that many of the elements that the media awareness study highlighted, which made all of our stomachs jump and feel concern and in fact alarm.... What we need to do is recognize those and recognize that those are the symptoms. Our challenge is to go back and look at what is the cause and how we can effect responsible change to prevent those symptoms and to protect children within that arena. That's where I think we get at the media literacy education and at the long-term grassroots requirement that it be a dialogue in homes of parents, with educators, with kids to kids directly.

When you talked about the funding side of it, it's hard to put a number on it because we're talking about educating all Canadian children with the skills to be safe and informed and think critically and watch carefully.

I can give you, from our organization's experience, one example that might be “extrapolatable”--if that's a word. A program we have is called TV and Me. Linda Miller, who is our director of education on secondment from the Ottawa-Carleton School Board, travels the country delivering media literacy education to parents and educators year round, and she impacts 2,000 educators a year. Five hundred parents a year attend workshops, and then those parents and educators impact out to children.

When we look at the fact that Forest Entertainment has funded us to the tune of about $200,000 to $300,000 a year, and we're able to reach 2,000 educators a year, and you start to consider that there are, I think, 250,000 educators in Canada, you begin to see that it becomes a bit staggering and overwhelming from a cost perspective. I only offer that up, not that it's conclusive, but just as an indicator that I really have no sense, a media awareness--and Jan may have a better sense of what kinds of dollars are required, but it's significant.

We work really hard, and we're estimating that by the time TV and Me is completed in this current funding out of this current social benefits package, we'll have impacted about 900,000 children, because the formula is that each educator impacts 30 children a year over a course of three years.

When you look at how many children there are in Canada, you begin to see that it's an expensive undertaking to do it in the depth and comprehensive way you want to do it.

Would that be consistent with any experience you've had, Jan, or is that overstated or understated?

Ms. Jan D'Arcy: I'd like to pass this over to Alan, actually, and see if we can broaden our response to this.

Mr. Alan Mirabelli: I appreciate the question about dollars. I think it's a lot of dollars, but let me try another approach.

One of the things I appreciate is that it took 20 to 25 years for us to even conceive of media literacy, and that's 20 to 25 years after television was introduced. What I think we're all talking about this morning is that in the changed climate we can't afford that 20- to 25-year lag. The sense of urgency I felt was a sense of urgency about how to go about it. Our normal reaction is to say, “Okay, how much?” For the Media Awareness Network, it would probably be an annual budget of about $2 million. What yours would be, I don't know, but we wouldn't be enough to do the job.

So let me approach it differently. One of the reasons we concluded, as we did this morning, with a request that this committee consider something in the preamble of the Broadcasting Act is that first of all Canada, through all of its approaches and institutions--and in this case its broadcast undertakings--has to acknowledge children, not as a reactive process of reacting to protect and inoculate against certain things that happen in the climate, but to make them active learners and participants in the process from day one.

Having said that, when you go to an active process, you're no longer thinking of kids as just little people to be protected. You are actually making an investment as a nation in the next generation of citizens. We are all then invested in socializing the next generation--not just teachers, not just parents, not just certain people in the culture, but all of us. I think that's the foundation from which we get a commitment to find the money, to explore and do the appropriate research, and to find the collaborative arrangements that are possible with the private sector, the public sector, and the research community.

All of these things need a foundation. We don't start from money; we start from a commitment to not just protect and inoculate but to socialize. That's a shared responsibility across the board.

I will finally say, and it's with pleasure, that the heritage ministry was the first to jump in with the initial funds that allowed us to start. Industry wasn't far behind after your leadership, but all of that wanes over time and fades unless there's a renewed commitment. What we're looking to do is anchor it in the act. That's why the preamble: it's to anchor a commitment.

Â (1235)

Ms. Cathy Loblaw: Building on that, I think it's the social benefits. Where such an amazing government incentive and policy triggered funding into the system for media literacy from many organizations, the challenge is sustaining it. It is currently tied to transfers of ownership and transactions. Will we have as much activity in that arena in the next five years as we've had in the last five years? We don't know. So will those social benefits continue to exist as they have to date? That's a question we don't know the answer to, but certainly, in getting us to where we are today there's no question that kind of policy incentive is what has made these grassroots programs possible.

Ms. Sarmite Bulte: What about self-regulation?

Mrs. Cathy Loblaw: Yes, in terms of self-regulation, currently there is the Broadcast Code, which is very television-focused and specific to television. Proactively, the industry has worked through the Canadian Direct Marketing Association to develop online guidelines, to be sure that the values in the television code are extended in the online environment and recognize the different nature of the online environment in terms of exchange of information, e-commerce, collection of data. Those guidelines were done probably four years ago. I think they were a first step. I think they were a limited measure.

Is there opportunity for the industry to take the next step in terms of current context? I believe so. I believe the self-regulatory system we have in place through Advertising Standards Canada and with the kids committee does have the legs and the ability to be able to apply those same values online. As to the how and the specifics, we're still in the process of learning and discussing and determining and what not. I think what's different about the online world from the television world is that it's never going to be as controllable. That's why we always come back to media literacy education. They have to go hand in glove, because even if we can control or contribute or ensure a system here, we can't control what's happening around the world. And kids have access to everything.

Ms. Sarmite Bulte: On the compulsory retransmission licence, which now we're going to be considering in Bill S-48, and the Jump TV and iCrave TV advertising, how is it going to be controlled, or have you even addressed that?

Ms. Cathy Loblaw: I'm not familiar with that.

Ms. Sunni Boot: If I could.... Sorry, I didn't realize you were going to answer. Go ahead.

Ms. Jan D'Arcy: When the CRTC reviewed their role in Internet regulation, they set it aside and said, for now, this is not a territory we're going to regulate. And so in fact it's new territory.

The framework for providing self-regulation that works, because there's a regulator there as the bottom line, still is not in place when it comes to Internet offerings. It just makes the whole notion of education triply important.

Â (1240)

Ms. Sarmite Bulte: I think it's something that's very important to this committee. Bill C-48 is looking at the compulsory retransmission licence and the whole question of copyright to deal with entrants such as iCrave TV or Jump TV and ensuring that the rights holders are paid.

One of the main concerns of the broadcasters who came before us, aside from the fact that they were potentially stealing the signal--I'm not going to debate the merits of that; it was, for the record, alleged stealing--was the fact that the rights holders were not being compensated. In addition to that was the fact that they were also using their space on the Internet for advertising.

Ms. Sunni Boot: Right. It would be the same difficulty as was just stated, that it becomes a more difficult thing to regulate. In totality with the code, it can be enforced. It's there for advertisers to act responsibly. If someone chooses not to and is not part of a membership, or if a viewer chooses to look at something where an advertiser has not been responsible, we have very little control over this. The only way we can arm our children is through media literacy. It goes back to the idea that we can't so much protect, but we have to arm them to be knowledgeable.

Ms. Cathy Loblaw: The other point, too, is that the current system that's in place, in terms of Advertising Standards Canada, does have two clauses that are for all advertising. Certainly a complaint can be registered about advertising online, the same way it can be registered about advertising in any medium, and it will trigger a review and a discussion in determinations.

There is certainly a bench measure of self-regulation in place. How that needs to evolve and grow I think is the challenge before all of us. I know, certainly from a point of view of intention, when I look at Concerned Children's Advertisers and our membership, our intention and desire is to be as responsible online as we are in television. It's how you express this responsibility in that environment that we're trying to determine. We have identified that media literacy education is the critical, paramount, absolute cornerstone of it.

We also feel, in addition to that, there need to be parenting tools and technologies, such as Net nannies and other filtering tools. That can be another tool. There need to be industry standards, and there needs to be self-regulation. I think elements of all of those are in place, and as the medium grows, so too will those elements.

I think we have a good system and we have a good infrastructure. It's just when you look at online, it's so much beyond just what we can do here in Canada. That's why we keep coming back to media literacy education.

Ms. Jan D'Arcy: I have an offer to the committee, or anyone in this room. We've produced a 45-minute program. It's called Kids for Sale: Online Marketing to Kids and Privacy Issues, and it reviews all of these issues in specific detail. I'd be happy to come back and make that presentation to the committee.

The Chair: Another vote has been called in the House of Commons for between 1:10 p.m. and 1:15 p.m. I had suggested to the remaining two groups that maybe they could wait here. Assuming there hadn't been a vote, we could have heard them. But it looks as if it's going to be impossible, and it wouldn't be fair to them. I regretfully suggest that we reschedule both of you for a later date. This time we'll make sure you appear at 9 a.m. so that you will avoid any votes. I apologize again.

We'll have enough time now to finish our questioning. I will give the floor to Mr. Harvard, but before I do, and before we lose our train of thought, Mr. Mirabelli, if you have any suggestions to make in regard to wording for the preamble, feel free to send them in to the committee. That helps us to get your views and the specific wording you think would be suitable.

Mr. Alan Mirabelli: With pleasure.

The Chair: Mr. Harvard.

Mr. John Harvard (Charleswood St. James--Assiniboia, Lib.): Thank you, Mr. Chairman.

I have just one or two questions on the subject of the advertising of prescription drugs. I know broadcasters in the country would like to see that legalized, and I'm wondering whether you would respond to it.

Let me say this first. I think advertising is not only intrinsic to, but an integral part of, the free market, free enterprise system we have. I am a strong supporter of advertising, but when it comes to this proposal of legalizing the advertising of prescription drugs, I have a couple of reservations. Although it's a slippery slope, I think I could entertain the notion if it were to be restricted to price competition, if advertising were confined strictly to promoting or encouraging lower prices of prescription drugs. But I don't want to see any kind of advertising of prescription drugs that would simply encourage a wider use of drugs. I think we have enough drugs in this society of ours now, whether it's over the counter, under the counter, through prescriptions, or whatever.

I'm just wondering whether any of you would have a response to that observation.

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Ms. Cathy Loblaw: From a children's group perspective, we're not involved in this discussion. I don't know what the proposals are or what it is, so I don't know that it is an issue from a children's television or children's advertising perspective.

Our colleagues from the Association of Canadian Advertisers may be the most versed people to offer comment on drugs and pharmaceuticals. It's not something we've--

The Chair: If one of you or both of you want to join us to give an answer to Mr. Harvard, feel free. There was a question about prescription drugs.

Ms. Sunni Boot: That's not a category that is even open for children's advertising at all. We would advertise that to a caregiver or a parent.

The Chair: Mr. Harvard's question was to the effect that regarding prescription drugs, he would accept advertising from the point of view of competition of prices, with a view to lowering--

Mr. John Harvard: I would entertain the notion.

The Chair: He would entertain the notion, but in regard to spreading the feeling of drugs and more drugs, we already have too many.

Mr. David Harrison: Well, I appreciate his comments. There is quite an industry-wide organization that is looking into this matter and I think is in discussions with the Department of Health. I know it's a contentious issue, not just in Ottawa but across the country. We in the advertising business feel it's important that we have access. We hope we would get wider access than you describe. But I know it's a complicated issue.

We are also faced with the fact that there's an enormous amount of information coming from south of the border that is confusing Canadians. It's actually making life difficult for GPs because they're getting so much information over the air and from the Internet about drugs that have different names in Canada. I think that's probably best discussed in a different conversation from the one today.

There is a tremendous amount of work that's gone in by the advertising business. I am not familiar enough myself to represent it properly today, but I know our industry would love to do that with you.

Mr. John Harvard: Good. Thanks.

The Chair: Ms. Lill.

Ms. Wendy Lill: On that, I beg to differ. I think it does have a lot to do with children as well. I understand that drug companies are advertising acne medication on children's TV, with ads such as “Ask your parent to make a medical appointment for you”. So this is happening on American TV. It's coming here. It definitely will have an impact. If pharmaceuticals are allowed to advertise, we will be seeing advertisements for acne medication, for diet pills, for Ritalin, you name it. We will be seeing kids pressuring their parents and parents rushing to doctors to get the latest drug, which may or may not be what is required.

So I think there are some major issues here regarding children, and some serious questions.

Ms. Cathy Loblaw: The Broadcast Code for Advertising to Children, though, is always the code that drives discussion and dialogue with kids. That code does not allow you to have direct urgings or to ask a parent to buy a product. I would say that any commercial of that nature that came along would simply not be approved or available to be aired on Canadian airwaves. We don't have control over American airwaves, but certainly the Broadcast Code is very specific.

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Mr. John Harvard: Kids watch adult programs as well. You can't just hive it off.

Ms. Cathy Loblaw: Certainly, and that's where we come back to the need to have media literacy education, because we can't set the standards in every home for what children will be allowed to watch or not be allowed to watch and be exposed to. That's why it's so important that we have a code that is specific for kids, that we honour kids, and that we have media literacy education on top of that, so if they are exposed to an adult message during adult programming, they're not in any way taken advantage of or misled.

In terms of the specifics of the pharmaceuticals, I'm sorry that I'm not more versed in it and that we haven't been part of that discussion or dialogue to date.

Ms. Sunni Boot: I'll just build a little on this. You're right, they are exposed to prime time television, and there's no question about it. For certain drugs, advertising would never be directed at the child because the purchaser, the individual responsible for that, would more than likely be a caregiver. The acne thing would be more for a teenage audience, but it's not currently in Canada at all.

Ms. Linda Millar (Director, Education, Concerned Children's Advertisers): I'd just like to add something, and that is that it's all the more reason for media literacy, not only with the educators but with parents who are also educators. One of the things we're trying to promote with educators and parents across Canada is for you to watch television with your children so there will be opportunities to discuss with them what's going on: What is this all about? Does it apply to us? Is it in your best interest to do this? Those are all questions for helping them to be critical viewers and to understand what goes on behind the making of these ads. It's also important to differentiate the codes that go on between Canada and other countries and to be able to understand that as well. I think it goes back again to media literacy.

The Chair: Mr. Cuzner.

Mr. Rodger Cuzner (Bras d'Or--Cape Breton, Lib.): First I have to qualify something. Our chairman, Mr. Lincoln, was a huge Uncle Chichimus fan, and he still has the Uncle Chichimus decoder ring.

As to the work done by the Concerned Children's Advertisers, I have boys 9, 11, and 14, so I've watched my share of children's TV over the last 12 years. I've seen how things have developed, improved, and evolved over the last number of years, so obviously you're making a difference. You're sending messages on the bullying and what have you, and they're great messages. They're impact pieces, and I congratulate you on that. Your brand is really recognized now too with the statement, so I think you're certainly doing what you should be doing. You're being successful.

But in that, from where you started in 1990 to where you are now, what are some of the measurement tools you've used? What are some of your success stories? Where have you impacted? That's the first question.

The second one is, when I see that young people are putting 16 hours.... It's great to have the multi-media stuff, the DVD, the Internet, and the VCR down in their bedrooms. Number one, I think parents are just using a lot of technology today as babysitting services. I see a lot of kids who have compromised social skills. We talk about active living, and one of the biggest challenges we have now is getting our young people active. The recent rates of obesity in our young people are staggering. They're frightening. We have to get kids off the couch and away from the keyboard. That's what I'm saying.

So you guys, your position is sort of juxtaposed because you're catering to people who want the attention of the young people, but it has created a problem. There is absolutely no denying that. It's not on your shoulders alone to change that. I know that as a government and through sport legislation we're certainly going to do our part, and we're willing to step up to the plate. What do you see in the long run as to how you...? I'm sure you recognize the problem. Where are we going with it? Those will be the two questions I'll pose.

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Ms. Cathy Loblaw: Yes, it is an issue.

I'll start with your last question and say we absolutely agree with you that children need to get active, get moving. We did a three-part commercial series last year on active living and encouraging kids to get moving. We believe we are not catering to our members; we're catering to children. A balanced, healthy lifestyle is in the best interests of children, and that can be inclusive of media or television but not exclusive of media or television.

The whole purpose behind our active living series is to do just what you're talking about, which is to get kids to make balanced choices, have a variety of elements in a day, and make sure they're active. The obesity issue is one we're really concerned about, and we've just started discussions with Health Canada on how we can play a role in helping kids make healthy food choices, in moderation and balance.

So we're very much aware of how important it is. In fact, the TV and Me program includes Canada's food guide and active living tips and tools. We very much support a message of moderation, balance, and choice, and not an exclusive, one-dimensional domain that, to your point, can have anti-social implications and be unhealthy for children.

Mr. Rodger Cuzner: Is it tough when some of your major advertisers are Coca-Cola, 7-Up, Frito-Lay, and what have you--O'Henry bars? Is there a contradiction? That's a tough one.

Ms. Cathy Loblaw: You know, it's interesting--it's not.

Ms. Sunni Boot: They're the ones who brought the issue forward and said we should be dealing with it, which I found quite extraordinary. They recognize there is a responsibility to children.

Ms. Cathy Loblaw: It's true. I've been with CCA for nine years now and have been amazed by the level of commitment of the individual advertisers, and the absolute recognition that they produce products and services for children and want to make those available to children with choice and balance, within an appropriate system that respects children.

Equally, they want to--it is their responsibility--contribute to the well-being of children. That's what drives CCA and that's what we always come back to on these issues. When we talk about active living and obesity, there's no compromise in our message. They're critical issues, and we need to be driven by what's in the best interests of children. Our members, quite candidly, are as united against that as they are on any of the other issues we've addressed.

To your question about measurement, impact, and tools, when you're effecting social or behavioural modification in issues such as bullying, active living, self-esteem, substance abuse, or media literacy, measuring it is one of our biggest challenges. It's hugely expensive to do, and it's very difficult to measure social change. Social change takes such a huge period of time that in the area of social marketing, which is what we're talking about, we're challenged by it.

We have tools we use that are in some way ad hoc, but we hope they are indicative. Annually, the broadcasters send us affidavits that tell us exactly where our commercials air, how much they're airing, and how many kids are seeing them, so we know the message is getting out there. We also do focus groups, where we talk to kids to understand their lifestyles and how the messages are playing with them.

We're in the field right now to try to get some feedback from kids. We ask them, “When you saw these messages, did they influence you to be more active or to be more inclusive with your friends?”, and that kind of thing.

We also know, through Linda's work in being out in the classrooms every day with parents and educators, the response we get from kids. When we ask kids whether they have seen these commercials, it's staggering, but 99% of the hands go up. They're quite candid about what they liked and what they didn't like. That impacted us.

So I would say, in a reflective or indicative way, we have a sense of measurement and tools; as concretely as we would like to, we don't. We hope to do more of it in the future.

The Chair: Our time is starting to run out, so please make it brief.

Ms. Jan D'Arcy: I'll be very quick.

Our Young Canadians in a Wired World survey is the baseline study. That's the jumping-off point for us to continue a measurement on a range of media use issues with young people. That's our basic framework.

The Chair: Before I give the floor to Ms. Bulte, I just want to pick up on Mr. Cuzner's point.

I've been a great backer and admirer of ParticipACTION and the way it's changed the lives of so many Canadians. Do you see organizations such as your own participating in a type of participACTION for kids? I know it's purely hypothetical.

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Ms. Cathy Loblaw: Last year our focus was in that area. The challenge we face is that many of the activities that kids consider the most fun today are sedentary ones, whether it's television, video games, or the Internet. What we tried to do in our series last year was remind kids that there are other activities that are just as much fun and can be just as great, and to reach out through their sedentary activities to get them moving.

Certainly, anything that will support kids being active and more physical is really important to us. That's what our series did last year, and that's what TV and Me continues to do everyday when it's out there talking to kids. It's one of the core issues we talk to them about, being active, being outdoors, being physical, and expressing that in whatever way is appropriate to their situation in their home and in their environment.

The Chair: Ms. Bulte, you have the last word.

Ms. Sarmite Bulte: I just want to make sure I understood Ms. Loblaw. I asked you about the success stories you could pinpoint. You said that in fact they were almost intangible and that you couldn't quantify them. I'm going to ask you the question again. Is one of the biggest problems you have under the present funding the inability to quantify your results?

Ms. Cathy Loblaw: Absolutely. You can talk to any expert about substance abuse prevention or any of the other traditional issues and they will have reams of research showing you why it's important and critical. When you talk about media literacy, there isn't any, and it's very difficult to quantify it.

Ms. Sarmite Bulte: Sorry, we have to go.

The Chair: Thank you very much for coming. You have expressed your points of view with great commitment and passion. We really appreciate your presence here.

The meeting is adjourned.