Thank you, Madam Chair.
On behalf of the Department of Canadian Heritage, I would like to thank the committee for inviting us to appear as part of its study on the media and local communities.
My name is Jean-François Bernier, and I am the director general of cultural industries at the Department of Canadian Heritage. I am joined today by Helen Kennedy, director general of broadcasting and digital communications; Marthe Bujold, director of strategic policy in the broadcasting and digital communications branch; and Luc Marchand, director of periodical publishing policy and programs in my branch.
Our intention today is to cover two areas of interest to your study: the newspaper and broadcasting sectors—in 10 minutes.
We have prepared presentations for your attention. I'll start with newspapers, and Helen will follow with broadcasting.
Please go to page 3 of your deck.
Every year, Canada's newspapers contribute more than 30,000 jobs and nearly $3.7 billion in revenue to the economy. They create and disseminate wide-ranging content to inform and entertain Canadians. Newspapers play an important civic role, by promoting the accountability of public and private institutions.
Throughout the world, the newspaper industry is adapting to the challenges of the online environment. In Canada this has translated in recent years into revenue losses. Despite efforts to innovate, the business climate remains challenging. The Canadian newspaper industry consists essentially of community newspapers, which are mostly weeklies and free, and daily newspapers. As we see on figure 1 on page 6 of your deck, the number of community newspapers has been relatively stable over the last five years at just over 1,000 titles. For these, the main business model remains print.
Community papers have experienced a moderate decline in revenue, as demonstrated in figure 2 on page 7. In contrast, the number of daily newspapers has declined by about 15% in the last five years. Still on page 6, you can see the decline in numbers there. Most dailies are maintaining a dual business model in print and online. They have faced significant reductions in their overall revenues and readership.
Moving right along to page 8, Canadians' news consumption habits are changing rapidly. People, especially young Canadians, are increasingly turning to online content to inform themselves. As readers' attention moves online, so do advertising dollars, which have traditionally been a staple of the newspaper industry.
I would really like to draw your attention to the graph on page 9. I will not go into detail, but this shows it all.
Look at page 10. The erosion of revenues has led to closures, job losses, and consolidation. Today in Canada three main groups own almost 66% of all daily newspapers and 35% of all community newspapers.
In recent years, new business models have emerged.
For example, in conjunction with its paper version, the Winnipeg Free Press is generating revenues with a pay-as-you-read approach.
La Presse seems to have found success with a digital-only model, through its La Presse+ app. While testing innovative digital strategies, some newspaper publishers recognize that print remains the preferred choice of many readers, particularly, in rural areas with weak bandwidth and among a generation of older Canadians.
Moving on to page 12, unlike some other cultural sectors, such as broadcasting, there is no federal policy framework for newspapers. However, over the years the Government of Canada has implemented some specific measures to support this sector.
Section 19 of the Income Tax Act intends to encourage Canadian ownership in the newspaper industry. It does so by preventing Canadian advertisers from getting tax deductions for ads placed in foreign-owned print newspapers. For its part, the Investment Canada Act requires that foreign investment in the newspaper industry, like that of any other cultural industry, be of net benefit to Canada.
Lastly, since 2010, the Canada periodical fund has provided support for the production of Canadian content. More than 800 community newspapers and magazines are supported every year. Free periodicals and daily newspapers are not eligible for the program. The bulk of program funding is calculated using a formula based on the number of copies sold. In other words, the more the publication sells, the more support it receives from the Canada periodical fund.
Thank you for listening. Of course, I remain at your disposal to answer questions later in the meeting.
I am now going to turn the floor over to Helen, who will speak to the broadcasting industry.
Thank you, Madam Chair. Good morning.
This deck provides an overview of the Broadcasting Act and information on key trends affecting broadcasting in Canada.
I will start with the Broadcasting Act, on page 4.
It dates back to 1991 and establishes the broadcasting policy for Canada. The other two main things the act does is it sets out the powers of the Governor in Council, the CRTC, and the minister in relation to broadcasting and establishes the mandate, governance, and powers of CBC/Radio-Canada.
If we turn to the broadcasting policy objectives for Canada, which are featured on page 5, the overall orientation is to ensure that Canadian content is created and accessible. Among other objectives, the act points out that the broadcasting system through its programming provides a public service; that it is essential to the maintenance and enhancement of national identity and cultural sovereignty; and that it serves to safeguard, enrich, and strengthen the cultural, political, social, and economic fabric of Canada. It also points out that programming should be drawn from local, regional, national, and international sources and that Canadians should be provided with a reasonable opportunity to be exposed to the expression of differing views on matters of public concern.
Slide 6 points out the key role that the CRTC plays. It is the body responsible for the regulation and supervision of the Canadian broadcasting system. According to the act, when the CRTC regulates, it should take into account a number of things, including that it be readily adaptable to the characteristics of the French and English language markets, that it take into account regional concerns, and that it facilitate the provision of Canadian programs to Canadians.
The next page, slide 7, presents the mandate of CBC/Radio-Canada. I won't read through every single line of it. I know the committee is well aware of the mandate of the CBC, which is a very broad and inclusive mandate oriented towards providing a wide range of programming that informs, enlightens, and entertains and towards ensuring that the programming should be predominantly and distinctively Canadian.
We group the key trends affecting broadcasting into three basic areas: industry, advertising, and audiences. With respect to the industry trends, the first thing we want to draw the attention of the committee to is that the broadcasting industry is part of a broader communications industry that generates revenues of more than $60 billion a year. Broadcasting also contributes to the GDP of the country and represents on the order of 50,000 jobs for Canadians.
It is a market that provides Canadians with a diversity of services. As you can see on slide 11, we have more than 660 TV services and more than 1,100 radio and audio services authorized to broadcast in Canada. At the same time, the industry is quite concentrated, because you can see, whether you're talking about the combined revenues of the telecom and broadcasting sector or just about the broadcasting sector, that the top five companies account for more than 80% of industry revenues.
Slide 12 is a pictorial representation of the major activities and the scope of the activities of our major communications companies. They're involved in many different but related lines of business, ranging from traditional radio and television to book publishing, mobile apps, and sports.
In terms of revenue and profitability, we see that total revenues for the broadcasting industry have grown from over $15 billion in 2010 to more than $17 billion in 2014. Revenue and profitability trends, however, vary from one segment of the industry to another. You'll see that in some cases they are more profitable than in others, and in some cases the revenues are higher than in others.
In terms of Canadian programming expenditures, we take as a starting point that the policy objectives of the Broadcasting Act require that broadcasters contribute to the creation and presentation of Canadian programming. We look at what they spend on Canadian programming and see that between 2010 and 2014 Canadian TV services increased their investments in Canadian programming, growing them from $2.5 billion to $2.9 billion, and we can see that now the pay and specialty sector spends about the same as the conventional broadcasting sector.
Now we turn to news. As we narrow down into the news genre we see that news accounts for approximately one-third of total Canadian programming expenditures. Local television stations, and we're talking about the conventional television stations, make a significant contribution to the provision of news. News constitutes an important part of broadcasters' overall expenditures on Canadian programming. Not all this news is local. The CRTC has reported that approximately $470 million was spent in 2014 by local television stations on local news and local programming.
Turning to advertising, the Canadian advertising market is undergoing structural change as a result of the growth in Internet advertising, which as you can see from the graph presented, has come mainly at the expense of newspapers.
In terms of audiences, we've looked at what's going on with consumption, what audiences are consuming and where they are consuming it. In 2014 Canadians spent on average 27.4 hours watching TV. The average weekly hours have been decreasing over the last few years, particularly among millennials, the 18 to 34 years of age group. More and more Canadians also are watching television online, and millennials in particular are more likely to watch Internet television. They're also very mobile, with 90% of them owning a smart phone.
Finally, we looked at the consumption of news. In 2013, television was the type of medium most often used by Canadians who followed news and current affairs. The use of the Internet to follow news and current affairs grew from 30% in 2003 to 59% in 2013. We see that younger Canadians use the Internet in greater numbers than their older counterparts to obtain news and information.
There you have a quick overview of key trends and the policy parameters set out in the Broadcasting Act.
Well, I guess I'm looking at the kinds of recommendations the Department of Canadian Heritage would put forward.
You've given us a very good overview of some of the advertising revenues. Certainly, Internet has taken off and classifieds are going down, but it looks as though the revenues from community newspapers have stayed pretty much the same. In fact, last year, in 2013—not last year now, but these numbers go to 2014—in your graph on page 9 they are virtually the same as they were in 2005.
I'm asking these questions so that we can get a handle on how to look at what is expected and what we will see coming down the road for the small or medium media to get out to the rural and local areas, the more remote areas that our study is looking at, and how we can best assess this situation. That's why I'm trying to get a handle on.... It will come out in future discussions, but in this meeting I was asking these questions so that we can get a handle as committee members on exactly what recommendations we can make as a committee to go forward to the government, recommendations that you will be dealing with. It helps if we can know a bit more detail about what kinds of recommendations have been requested of you—excluding those involving the CBC; I understand that it's one of the larger mechanisms of media, and so I'm dealing more with the smaller ones.
Will you be looking at making changes in some of the programs currently being provided? Has the department received from private media any recommendations on those areas as well?
I could speak for newspapers and some TV production.
In newspapers, there's the Canada periodical fund for periodicals. It is what it is: $75 million. As I mentioned, this is the contribution for community newspapers and magazine publishers.
In the audiovisual area, you have a fairly elaborate public policy tool kit, which includes tax credits based on labour expenses for independent producers. You have the Canada Media Fund, which is a public-private partnership. Lawyers perhaps would correct me, because it's not per se with a partner, but it is a public-private partnership. There's Telefilm Canada, which invests just about $100 million in the production of feature films in this country. There's the National Film Board, which supports in-house production. There's the CBC, which sponsors or licenses Canadian programming. And there is a slate of licence conditions that the CRTC puts on various players in the broadcasting sector, from quotas to spending amounts and requirements in Canadian programming.
When you add all this up, it's a lot of money, but it is for the production of Canadian content, and there have been many successes with many of those programs, not only in Canada but in the rest of the world. If you want to watch the next Oscars ceremony, you'll see that two Canadian co-productions are in the running for best picture. So I would say we've come a long way.
I don't know, Helen, whether you want to add anything else.
We've been following and looking at the various trends in what's going on with broadcasting and digital communications. You have your technological changes that are happening with new devices and new capacities technologically to create and consume content, while at the same time we've been monitoring the changes in consumer behaviours and the expectations that have gone along with that.
We see in the millennial group, for instance, that they are much more mobile. They are much more connected. They don't have the same expectations as older-age cohorts who grew up in a more traditional media world, where the broadcasters curated the content and scheduled the programming. People chose which programs to watch and would follow the schedule of the broadcaster's programming.
Now, we see that people are more mobile. They expect more personalization in their content. They expect to get it when and where they want it. It's about the access piece, being able to go and get something, and you see an industry adapting to that. You see an industry that has put much more content and much more focus on demand and that is moving towards higher-quality content as well, content that will stand out. As well, you see the technology supporting that with the development of very high-quality digital signals. We're now seeing 4K and so on being generated.
In broad strokes, we follow both what's happening with the technology and what's happening with the consumer behaviours and the expectations that go along with that. The market right now is extremely diverse, not just in the kinds of content available, but also in the kinds of business models and consumer preferences that we see.
You have everyone from the traditional senior citizen, who has a very different set of expectations around how he or she wishes to be informed and entertained, versus someone in high school, university, or the millennial group, who has a different set of expectations about how he or she wants to be informed and entertained. We see these industries trying to adjust to that and trying to serve those different market segments.
In terms of the digital and the diversity, one of the big things we've seen in the broadcasting sector over the last number of years—and the commission can speak much more eloquently to this than I can, I'm sure—is the growth in third-language services in Canada. Also, we've seen more foreign services being authorized for distribution in Canada. You have services coming in from other parts of the world that Canadians are interested in as well.
On the production side of things, we haven't done any studies internally as to the employment of creators, as such, from different cultural backgrounds. There may be some of that in the academic...or in the industry itself. There may be some of it in the profile. I'm not sure. But we do see that it is an area of activity as well. We see it, for example, also in the Canada Media Fund. There is some support going to programming that's created in third languages. Where there's a market demand for that and where the programming is eligible as per the broader criteria of the program, it does receive funding from the Canada Media Fund.
Good morning, Madam Chair.
I am the Competition Bureau's senior deputy commissioner responsible for the mergers and monopolistic practices branch.
I will begin my remarks by providing some context about the Competition Bureau and its mandate. Then, I will move on to our role as it relates to merger review and the factors we consider in our examination of mergers. Lastly, I will speak to recent merger reviews within the Canadian media sector.
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian consumers and businesses prosper in a competitive and innovative marketplace. Headed by the commissioner of competition, the bureau is responsible for the administration and enforcement of the Competition Act.
Under the Competition Act, mergers in all sectors of the economy are subject to the review of the commissioner of competition to determine whether they will likely result in a substantial lessening or prevention of competition. The question for us in our review is whether there is evidence to support that the combined company will be able to exert market power as a result of the merger to the detriment of customers, suppliers, or ultimately Canadian consumers.
Where we find this to be the case, the act also requires the bureau to assess evidence of economic efficiencies gained by the parties as a result of the transaction. If the efficiencies gained are greater than the anti-competitive effects, the act mandates that the merger be permitted to proceed. The bureau's role in merger review is to obtain the necessary evidence and undertake careful analysis and consideration before reaching a determination. The factors involved in our evidence-based economic analysis are governed by our legislation and jurisprudence in this area.
When the bureau does determine that a merger is likely to substantially affect competition, we seek to remedy those effects either through a consent order of the Competition Tribunal that is negotiated with the merging parties, or failing agreement, through an application to the Competition Tribunal for an order to prevent, dissolve, or alter the merger.
As part of the bureau's approach in examining a merger, we consult with a wide range of industry participants, suppliers, competitors, industry associations, customers, and industry experts. We consider many different factors, including the definition of the relevant economic market, the level of economic concentration, and the level of competition remaining in the market. Our mandate requires us to analyze the anti-competitive effects of mergers that result from an enhanced exercise of market power. All bureau merger analyses are grounded and bound by the legal and economic tests laid out in our act and associated case law. In line with this, our reviews of media concentrations under the act have consistently adopted an economic lens in assessing potential anti-competitive effects.
In media concentration, there have been a number of recent reviews. In 2014 the bureau reviewed Transcontinental's acquisition of 74 Quebecor community newspapers and determined that transaction could have potentially resulted in a substantial lessening of competition in certain regional markets. We required Transcontinental to sell 34 newspapers within these regional markets in order to preserve competition within those markets. In 2013 the bureau also reviewed Bell Canada's proposed acquisition of Astral Media. Following our review, we determined the transaction would have led to increased prices and reduced choice and innovation in the television distribution industry. We addressed these issues through a consent agreement that required significant divestitures from Bell in relinquishing ownership of over 10 channels, as well as behavioural restrictions that prevented them from imposing restrictive bundling requirements.
It has been an interesting time in the media business.
I live in a city where the anchors are in Toronto for local news, and I'm in western Canada. I have the full team out of Global Toronto telling me how it was today on 2nd Avenue in Saskatoon.
That, to me, is ridiculous. I'll never accept that.
Will the viewers accept it? The ratings have plummeted. The competition...you guys have to realize that local is where it's at, and local is the face. I don't care how many guys they have on the street in television. If you don't present in front of the television set from the city you're from, you're ratings are going to go zip. I just don't see where this industry is going, with someone in Toronto telling me what's going on in Saskatoon, in Kelowna, in Winnipeg, and in Regina. I get my national news, but my local news should be, underlined, local, and we're not seeing it in these four areas with the recent Global moves.
I just share that with you.
Thank you, Madam Chair.
Thank you to my colleague for allowing me to ask a few more questions.
Welcome to all.
To the CRTC, thank you for your presentation. Competition is what we're here to talk about, and to try to come to some conclusions about how our committee and Canadian Heritage can enhance and provide more opportunities in these lower level, smaller markets from the large broadcasters, and papers as well.
I have just a quick question. As I mentioned, I have some questions on paper that I can maybe table for all my colleagues to see and to get some replies from Canadian Heritage.
Regarding the kinds of funds that come through the opportunities fund and some of the others, have you ever assessed the possibilities around how these funds are being used today in the industry? By that I mean, do they promote innovation or discourage it? Are they fostering dependence on those dollars, in some areas? And do you think it has anything to do with the graphs you gave us regarding some of the use by the different kinds of media?
I could probably summarize it by asking you if the funds are being used wisely. Are they fostering dependence in some areas where people aren't willing to change, or are they being used to create the independence that Mr. O'Regan was just asking about with regard to moving forward with some of the smaller mediums?
Just to add to that, I think there's a real danger in presenting the Internet and the diversity of voices that it allows as something that is to be overcome.
If you look at the media environment right now.... At the Department of Innovation, Science, and Technology, we study a lot of disruptive technologies and their impacts on existing marketplaces. I think what's happening in newspapers is not different from what happened in the music industry in the late 1990s, when all of a sudden they had challenges selling CDs and a new distribution model appeared, or from what's happening in the taxi industry right now, for example, with Uber and the challenge it's presenting to an existing model.
On the side of the Internet, we're obviously extraordinarily pro Internet at the Department of Innovation, Science, and Technology. Our view is that it has a real capacity and a real ability to create the diversity of voices. For example, there were some questions around whether existing programs are sufficient to create diversity of voices.
I would say, look at the Internet. Without government subsidies and without a regulatory type of environment, in fact, the freedom it allows has created a huge amount of diversity of voices. We have all kinds of new media services that are available now. As well, it has really reduced the cost of entry to a lot of these industries. In a local media source, if a market player is displaced or if you have concentration in traditional media, it's probably easier than ever before for a new business to get started and for new voices to occupy that space. I think there's a lot to be really excited about, not just looked at as a challenge to an existing industry, which clearly is facing that challenge and trying to find ways to compete in a digital marketplace.
I think the new entrants are really exciting and should have a place in the study of the committee going forward. I just wanted to give that kind of appeal for innovation and competition.
Thank you, Madam Chair.
I was quite glad to hear Mr. Halucha's remarks, since the industry perspective is the one I am most interested in. As I said to Mr. Bernier and Ms. Kennedy earlier, the reality of two cultures and two languages is a paradigm we have long been dealing with. The challenges essentially revolve around the industry.
I have two questions for you.
We talked earlier about creating apps and replacing the postage subsidy. Nowadays, we are talking about the government subsidizing or supporting the development of an app to make the media service more accessible.
I think it's important to always draw the distinction between the cultural and heritage component—the diversity of voices and so on—and the marketplace. Regardless of whether a business sells lawnmowers or newspapers, it provides people with jobs and we want to do everything possible to keep those jobs. Do you offer the industry any type of modernization support, to help with the building of apps or other new technologies? Parliament is perpetually playing catch-up with consumers, who move much more quickly than politicians. That's my first question.
My second question is this. In light of the recent acquisitions, I can't help but be concerned by the media concentration Mr. Waugh was speaking of earlier. What might happen if one of the big players were to decide to sell one day? Obviously you would object. The Investment Canada Act also comes into play. That's another consideration that emerges. Is there a risk, or should I not be worried?
Thank you, Madam Chair, for inviting my colleague Michael Craig, acting senior manager for English television, and me, Scott Hutton, executive director of broadcasting with the CRTC, to appear before your committee.
We commend you and your members for focusing on media and local communities. It's top of mind for many Canadians, with repeated announcements of cuts to local newsrooms across the country. Coincidentally, this is a topic that the CRTC is currently examining.
In late January, the commission began a public hearing on television programming that is closest to Canadians: local news and current affairs, which keeps them informed of events and issues pertinent to their communities. This type of programming promotes the democratic process by keeping citizens informed and engaged. We are looking at the presence of this programming in order to ensure the future of local and community television in today's fast-evolving and increasingly fractured media environment.
There are limits to what I can say about this issue. As you know, the CRTC is an administrative tribunal with quasi-judiciary responsibilities. Since the matter is pending, and to preserve the integrity of our decision-making process, our appearance before your committee is necessarily confined to explaining the proceedings. Naturally, we will not be able to share the information gathered confidentially or to speculate on decisions or licence renewals that will follow.
However, I am pleased to provide an overview of the state of local media and the motivation for our current review. I'll focus primarily on TV, although I'll briefly highlight radio stations too. I can also shed light on local broadcasters' regulatory obligations when they receive a licence from the CRTC.
With regard to radio there are more than 1,100 radio stations in the country that are inherently local and focused on the needs of their communities. Local news, weather, and sports are the key elements of private radio operations. The talk radio format is especially popular in most urban centres, yet the radio sector must contend with the growing impact of music streaming services and the widespread availability of connected cars.
While radio's challenges are great, those facing TV are even greater in the age of Netflix, Facebook, and YouTube. That's why we launched our comprehensive Let's Talk TV review of the entire television system in October 2013. We engaged with 13,000 Canadians during the course of the review, which included a public hearing in September 2014.
It was during this process that the CRTC identified a number of challenges faced by local and community television in an increasingly fragmented media world.
More and more, Canadians are utilizing different platforms to consume information and entertainment content, and even to broadcast their own. The fact that certain dailies have ceased their print versions and moved online is proof of this new reality.
Putting additional pressure on broadcasters, the advertising revenues derived from local television news have fallen sharply in recent years.
These shifting realities notwithstanding, the commission believes profoundly that the Canadian television system should encourage the creation of compelling and diverse Canadian programming. This programming should include news, analysis and interpretation to ensure a local perspective on current events—whether that programming is produced by the private, public or community component of the system.
When we look at broadcasting policy, we strive to accomplish a number of outcomes: empower Canadians to be at the centre of the broadcasting system; place the focus on the creation and promotion of world-class programs made by Canadians; and remove barriers to innovation.
People's attachment to local TV stations was apparent during the eight days of hearings that ran from January 25 to February 3, and we have the evidence of that here with us today. Canadians told us they value local news for its capacity to connect them directly with their communities. Local news also helps them make sense of world events and enables them to participate in Canada's political, economic, and cultural affairs.
Many echoed the sentiment expressed by Kirk Lapointe, who appeared before the commission during the said public hearings. The former head of CTV News, and the founding executive editor of the National Post, Mr. Lapointe said:
|| We are too small of a country to permit broadcasters to further dim the lights in their news studios town by town.
Yet, that's exactly what has been happening. An alarming number of television stations have reduced the length of their newscasts, cut back on staff, or centralized the production of their news programming.
That's in large part because of declining advertising revenues. Data collated by the commission indicates that the cost of producing local news television content was 22% higher than revenues in 2015.
Needless to say, these are concerns the commission takes seriously. That's why we asked for public input on a number of questions as we determine how best to support local media in local communities.
You may have heard about the speech given by Jean-Pierre Blais, our chairman, at the Canadian Club of Toronto last week. It focused on TV news in an era of change. The chairman's message was clear. Even if the old way of doing business is no longer sustainable, there is no shortage of opportunity to make great content that will continue to draw viewers however Canadians choose to access such programming. He also underlined that there is a massive amount of money in the television system that should be put to work to resolve these issues. Our research in the Let's Talk TV review found that support for Canadian television production is worth more than $4 billion annually.
When the CRTC issues local broadcast licences, they come with conditions—one of the most critical being that they produce and provide local TV programming. In exchange for the right to sell advertising and use the public airwaves to bring their productions into the homes of Canadians, broadcasters have a duty to serve the public interest, because our democracy depends on it. Local programming promotes the democratic process and the public good by keeping citizens informed and engaged.
English language stations owned by the largest ownership groups are required to broadcast at least seven hours of local programming per week in non-metropolitan markets and at least 14 hours per week in metropolitan markets.
In 2014, TV stations spent more than $470 million on local programming and news, while broadcasting distribution undertakings spent $115 million on community televison channels. The commission is convinced there is enough money in the system to support the creation of news and local information programming.
Canadians have been clear throughout our public consultations that they expect us to pay close attention to the quality and quantity of local news and public affairs programming.
We've sent an equally clear signal to the TV industry that we'll hold major broadcasters to account when their licences come up for renewal in 2017. If they fail to live up to their end of the bargain, the CRTC will not hesitate to take action.
As CRTC chairman Jean-Pierre Blais warned the TV industry last week, television news belongs to the marketplace of ideas, not to the marketplace of higher dividends for investors. We certainly hope the message got through.
Madam Chair, this is what I can safely say prior to the release of our decision on local and community television.
Of course, both Michael and I would be happy to respond to your questions to the best of our ability.
I've read lots about you in the last five years. You must be tired of this subject.
I'm going to quote Charlie Rose, if you don't mind. He said that if you don't have local news, you have nothing. He said you could go out and buy any show in North America, including Canada, but if you didn't have local news, you wouldn't have the local ratings and you wouldn't have the ads and the money coming in.
I thought I would share that with you, because it is the local newsrooms that have felt the wrath of the cuts we have seen coast to coast to coast in the last six or eight weeks in this country.
Who regulates the quality of television on each station? We've talked here today about the ads and the money, but who is actually going over it? Where I used to work, we had five and a half hours of local programming a day. Was it good? I'm not sure it was great quality, but it did fill black and it gave us five and a half hours of local Saskatoon or Saskatchewan quality. Who regulates this?
When I see, as you've heard me say before, someone in Toronto giving me the news in Saskatchewan, who's regulating the quality and the quantity of local news?
We regulate the broadcasting system, including those who provide local news.
Traditionally in the past, we regulated the number of hours. You mentioned hours and I won't repeat them. The amounts are here.
You mentioned quality. Quality is very difficult to measure. We've just been through eight days of hearings, and those subjects did come up, and Canadians from across the nation expressed those concerns to us. We've asked questions about the definition of local news, for example. Traditionally, we've simply looked at local programming. We've asked ourselves whether we should be more specific towards local news.
What are elements of quality in local news? It's hard for me sitting here in a meeting room, or traditionally in Gatineau, to determine what is of quality for your local environment.
We've asked questions. Should we look at a physical presence? Should we look at reporters on the ground? Should we look at decision-making with regard to what appears on air from the local environment? Those are questions we're certainly asking. We are also wondering whether or not we should intervene in those areas.
The CRTC and our chairman through his speech certainly indicated we share those concerns with respect to the importance of investigative journalism.
We're in a great period of transition at the CRTC and the media business. One of the constants in our business is that there is always a change and evolution.
We found there are a number of Canadians who do want to be fed 24 hours a day. We can't fight Canadians. This is what they want and they're looking for that. At the same time, the erosion is occurring, not so with the time that's spent viewing traditional television, but certainly with the revenues. Our colleagues previously...I won't get into too much from their presentation, but yes, the advertising dollars are being spread across a number of platforms.
What we're trying to do is encourage broadcasters to be on all platforms. You create that programming for today and you use the resources that you have today, but you have to spread them across and reach out to Canadians because Canadians are expecting that programming to be available on all platforms.
Money is difficult in that environment. We've all heard the expression “digital dimes and analog dollars“. They're losing analog dollars. They may find people on digital, but it's digital dimes they're picking up.
Sorry, Madam Fry.
Thank you, Madam Chair.
Thank you, gentlemen, for joining us today.
Clearly, we are talking about a changing marketplace, and the issue that stands out most is the financial one. As my colleague pointed out, providing regional coverage costs money, and getting that money depends on advertising revenues. We all watch Lisa Laflamme on CTV's nightly newscast, but that program is losing the most money for the network because of the astronomical production costs and dwindling advertising revenue.
Conventional television companies are in financial trouble because of the eroding advertising market, which is moving, more and more, to the Internet. That doesn't fall within your domain, however. We can all sit here and scratch our heads at the elephant in the room. On that point, there was clearly a huge misunderstanding when Netflix and Google representatives testified during the CRTC's recent hearings on the subject, as part of the Let's Talk TV process.
Where do things stand in terms of the numbers, which are essential in order to understand the situation? Our entire industry is based on numbers and market analyses. We don't have those figures; nor are we likely to get them. Where do you stand on that huge problem? We can dance around it, but it's there.
It wasn't local news; it was local programming. Although local programming often is news, it was....
That fund was introduced at a very trying time in the broadcast industry. We've talked a lot about advertising revenue being shared across multiple platforms. In 2008 there was a rather serious downturn in the economy, and there were television stations that were closing. Subsequently, as many of us learned, the major broadcasters were likely in a situation where they were in technical default, just in their own financial health.
That fund was brought into place to ensure the maintenance of local television stations during that particular period. It was also there to help them transition to digital, because digital broadcasting was becoming the new norm and there were changes to how we allocate spectrum in this country that they had to adapt to. It was very precise and it was put in place to help during that precise period.
When we removed the fund, essentially the fund had been successful in achieving those objectives, which was ensuring that the stations did not close, and it gave them time to recuperate from the economic downturn. So, the stated purposes had been achieved and those stated purposes were no longer required.