TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

 

 

                          SUBJECT:

 

 

 

Review of the Commercial Radio Policy /

Examen de la Politique sur la radio commerciale

 

 

 

 

 

 

 

 

 

 

 

 

HELD AT:                              TENUE À:

 

Conference Centre                     Centre de conférences

Outaouais Room                        Salle Outaouais

140 Promenade du Portage              140, Promenade du Portage

Gatineau, Quebec                      Gatineau (Québec)

 

May 18, 2006                          Le 18 mai 2006

 

 

 

 

 

Transcripts

 

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

 

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

 

 

 

 

Transcription

 

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

 

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

 

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

 

 

                 Transcript / Transcription

 

 

 

Review of the Commercial Radio Policy /

Examen de la Politique sur la radio commerciale

 

 

 

 

BEFORE / DEVANT:

 

Charles Dalfen                    Chairperson / Président

Michel Arpin                      Commissioner / Conseiller

Rita Cugini                       Commissioner / Conseillère

Andrée Noël                       Commissioner / Conseillère

Joan Pennefather                  Commissioner / Conseillère

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Chantal Boulet                    Secretary / Secrétaire

Peter Foster                      Hearing Manager /

Gérant de l'audience

Bernard Montigny                  General Counsel,

Broadcasting / Avocat

général, Radiodiffusion

Anne-Marie Murphy                 Legal Counsel /

Conseillère juridique

Robert Ramsey                     Senior Director, Radio

Policy and Applications /

Directeur principal,

Politiques et demandes

relatives à la radio

 

 

HELD AT:                          TENUE À:

 

Conference Centre                 Centre de conférences

Outaouais Room                    Salle Outaouais

140 Promenade du Portage          140, Promenade du Portage

Gatineau, Quebec                  Gatineau (Québec)

 

May 18, 2006                      Le 18 mai 2006

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                PAGE /  PARA

 

 

PRESENTATION BY / PRÉSENTATION PAR:

 

 

FACTOR                                          1433 /  8193

 

Radio Starmaker Fund                            1466 /  8439

 

ANR Lounge                                      1504 /  8666

 

Canadian Satellite Radio                        1515 /  8747

 

Impératif français                              1532 /  8825

 

Canadian Conference of the Arts                 1557 /  8937

 

Evanov Radio Group Inc.                         1584 /  9110

 

Coalition of Nine Provincial/Territorial Music  1602 /  9229

  Industry in Process Association

 

Michael Fockler                                 1623 /  9345

 

Canadian Music Centre                           1640 /  9474

 

Fondation Radio Enfants                         1656 /  9591

 

Wayne V. Plunkett                               1681 /  9741

 

CPSC                                            1698 /  9837

 

Magda de la Torre                               1728 / 10021

 

 

                  Gatineau Quebec / Gatineau (Québec)

‑‑‑ Upon commencing on Thursday, May 18, 2006

    at 0904 / L'audience débute le jeudi

    18 mai 2006 à 0904

8186             THE CHAIRPERSON:  Order, please.  À l'ordre, s'il vous plaît.

8187             Good morning, everyone.  Bonjour, tout le monde.

8188             Madam la Secrétaire.

8189             LA SECRÉTAIRE:  Merci, monsieur le Président.

8190             We will now call the first participant for this morning, which is FACTOR.

8191             Mr. Jim West and Ms Heather Ostertag will be appearing for FACTOR.

8192             You will have ten minutes for your presentation.  Please go ahead.

PRESENTATION / PRÉSENTATION

8193             MR. WEST:  Thank you, Mr. Dalfen and Commissioners, for granting FACTOR this opportunity to appear today.

8194             My name is Jim West and I am the Chair of FACTOR.

8195             Joining me today, beside me, is FACTOR's President, Heather Ostertag.

8196             FACTOR is a non‑political, non‑aligned organization and it was not our initial intention to appear at these hearings.  However, given the nature of the issues and the responses and positions put forward, it is apparent that there is confusion surrounding the important work done by FACTOR.

8197             It is our goal to support this process by ensuring that the facts on FACTOR are placed on the record.

8198             Throughout these hearings there have been many acknowledgements on the importance of FACTOR continuing its good work.  In hearing of the concerns expressed around a need for a greater transparency of how the foundation operates and where its funding is disbursed, I would like to suggest that all interested parties meet to discuss our common objective of supporting the development of Canadian artists.

8199             We advocate that we explore the possibility of a common administration for the various funding programs.  We would also like to see that these discussions include the possibility of redefining and reconstituting FACTOR to enable it to be the conduit for supporting the visions of the various boards of directors of these organizations.

8200             I will now turn the presentation over to Heather.

8201             MS OSTERTAG:  Thank you, Jim.

8202             FACTOR is a successful private/public partnership that has produced some very significant results.

8203             Currently, FACTOR provides funding to assist with all stages of the development of the career of an artist, from demos on through to the support of commercially released recordings.  Support is also provided to assist with the marketing and promotion of these recordings, both nationally and internationally.

8204             A significant benefit for Canadian artists from this partnership is FACTOR's ability to blend the public and private funds.  Treasury Board rules do not allow for a carryover of commitments.  The carryover that occurs at FACTOR can only happen because of the blended private/public funding, which provides the artist the ability to complete projects, allowing complete freedom within the creative process.

8205             Some FACTOR results include:

8206             Since April 1999, 43 FACTOR‑supported artists have received 89 certifications and over 221 various domestic awards ranging from Juno Awards to the Urban Awards to the Country Music Awards.

8207             From April 1, 1999 to March 31, 2006, FACTOR has disbursed final payments on completed projects totalling $55 million.  This funding has been matched by the industry's own investment of just over $114 million.

8208             While FACTOR requires applications to put up minimally 50 percent of the budget, the industry has actually absorbed 68 percent of the costs.

8209             A national network of music industry associations that is supporting the growth and development of Canadian grassroots artists coast to coast to coast.  Through FACTOR's National Advisory Board there are two face‑to‑face meetings per year to discuss industry challenges and issues.

8210             It has also afforded provincial music industry associations the opportunity to network with each other as well as with other key industry people.  The exchange/access to information has supported the growth of the industry at the grassroots level.

8211             Canada has become the number three exporter of music in the world.  FACTOR‑supported artists such as Nickelback, Alanis Morrisette, k.d. lang and Sarah McLachlan, are among those that have put Canada into such a significant place in the global market.

8212             All of those artists have been supported by FACTOR.

8213             The Nickelback story, for example:  They made a CD, took it to radio and before radio could play it, they asked them to re‑mix.  The band was out of money and unknown.  FACTOR loaned them $5,000, and in the words of Chad Kroeger, lead singer of Nickelback, "the rest is history".

8214             Since inception FACTOR‑supported sound recordings have sold over 30.2 million copies worldwide with a retail value in excess of $680 million.

8215             FACTOR's future plans:  Following FACTOR securing a five‑year commitment from Canadian Heritage in 2005, the board of directors had a full review of the foundation undertaken.

8216             Surveys were sent to over 4,600 potential respondents and approximately 1,000 stakeholders took the time to provide feedback through interviews and on‑line surveys.

8217             The following groups were included in the surveys:  the Department of Canadian Heritage; broadcasting sponsors; music industry associations; applicants (both successful and unsuccessful); jurors; the board of directors and staff of FACTOR.

8218             This review is enabling FACTOR to re‑invent itself and revamp its programs in very significant ways.  However, with the business changing radically and FACTOR's desire to be sensitive to the need for change, we will continue to consult with the industry to ensure the programs remain responsive.

8219             We are also aware of the importance of recognizing the need for change and that it needs to be effectively implemented.

8220             We are currently developing a new website that will be even more interactive and will be available for use by the visually impaired.

8221             Programs are being overhauled and new ways of interacting with the artists and applicants are being developed.  We are targeted to roll out the newly renovated FACTOR on July 1, 2006.

8222             We will, of course, continue to consult with the industry to ensure the programs and funding we provide continue to be responsive to the rapidly changing environment.

8223             FACTOR's challenges are:

8224             (1) the high level of applications not successful in securing funding;

8225             (2) the limited financial resources currently available to FACTOR making it impossible to meet full artists' needs;

8226             (3) how to effect change that results in a positive, constructive difference, not a change for the sake of change or, even worse, change that results in a negative outcome.

8227             Why a common administration?

8228             With a common administration, there are the economies of scale to be enjoyed; as well, the benefit of ensuring that the programs provided operate at a high level of complementing other initiatives while preventing double funding of the same projects.

8229             It would ensure the funds are spread out in the most equitable fashion.

8230             Why FACTOR?

8231             FACTOR has a proven track record of 24 years of supporting Canadian independent artists.

8232             We have a solid working relationship that has had the broadcasting and music industries working together for what is best for the artists.

8233             We have a successful track record of managing significant amounts of both public and private funds.

8234             We have a trained, experienced staff.

8235             FACTOR has participated in a minimum of five federal audits, the most recent having been concluded in October 2003.

8236             A copy of this report can be found on the website for Canadian Heritage.

8237             Some highlights of the audit include:

"The objective of this audit was to provide senior management with assurance on the soundness of processes and to determine where the organization is most exposed to risk and to identify which remedial actions are available and appropriate."

8238             In general, the audit team found that:

"(1) the management control framework is appropriate to ensure compliance, effectiveness and financial integrity;

(2) information used for decision‑making and reporting is timely, relevant and reliable;

(3) risk management strategies and practices are suitable to deliver the intended results and the program design and implementation reflects the objectives of PCH"

8239             FACTOR's response to submissions.

8240             There have been a number of comments made in submissions to this hearing that beg our response, including those of the CAB/PriceWaterhouseCooper Report, Canadian Music Centre, Canadian Association of Ethnic Broadcasters and Canadian Independent Recording Artists Association.

8241             However, due to the time constraints of this hearing process, we will only be briefly speaking to the CAB submission and specifically to their PriceWaterhouseCooper Report.

8242             We would like to thank Glenn O'Farrell and the Canadian Association of Broadcasters for including the comment in their submission acknowledging that, quote:

"FACTOR may have certain reservations regarding the manner in which the data is compiled and/or presented."

8243             This is correct.

8244             However, due to the limited time available, we are unable to cite all the errors in this report.  In the meantime, it is our view that the PWC Report does not represent an acceptably accurate assessment of FACTOR's performance in the execution of its mandate.

8245             Should the Commission so direct, we are prepared to undertake the preparation of a full report identifying all the discrepancies in the PWC document.  We would however appreciate being given several days to prepare this report.

8246             We direct you to the additional comments on the other submissions contained in the annex.

8247             Thank you and we welcome any questions you may have for us.

8248             THE CHAIRPERSON:  Thank you very much.

8249             Commissioner Arpin.

8250             COMMISSIONER ARPIN:  Thank you, Mr. Chair.

8251             Regarding the comments that you were contemplating for the CAB PriceWaterhouse Report, as you probably know, we stated at the beginning of this hearing that we were allowing up to June 12th for interested parties to file comments in response to the various submissions.

8252             MS OSTERTAG:  I wasn't, but I will; thank you.

8253             COMMISSIONER ARPIN:  So you have up to June 12th.

8254             If you want to make further comments also on other submissions ‑‑ I just notice that you have comments on other submissions as an appendix, but if you have attended the hearing or read the transcript and think that other comments have to be brought to the attention of the Commission, you have up to that very date.

8255             If we were to ask you for some more detail, you will only have until May 29th to do so.  But replies will be allowed until June 12th.

8256             MS OSTERTAG:  We will take the June 12th date and file; thank you.

8257             COMMISSIONER ARPIN:  Based on your oral presentation this morning, you mention you have twice a year meetings with various parties of the industry, which include provincial music industry associations.

8258             Are the broadcasters attending these meetings?

8259             MS OSTERTAG:  No.  They are ‑‑

8260             COMMISSIONER ARPIN:  So they are music related only.

8261             MS OSTERTAG:  It is music related.

8262             It is the challenges facing the development of FACTOR's programs and what have you.

8263             COMMISSIONER ARPIN:  So the meeting of the minds between the broadcasters and the music industry is either at a CRTC hearing or at the Canadian Music Week annual gathering, I suspect.

8264             MS OSTERTAG:  No.  We actually have a representative, the Chair of our National Advisory Board.  Whatever recommendations come out from the meetings are actually minuted, documented and provided to the board of directors where all the directors meet for two days.  And we have found that our board of directors, which is a volunteer board, doesn't have the time to be able to sit for those two days and work through a lot of this stuff.

8265             Some of it is just them sharing information on how they were successful in approaching this sponsor or that sponsor for funding.

8266             It is at a very basic working level, not high end stuff.

8267             COMMISSIONER ARPIN:  I see.

8268             So it is almost an introductory course to the music industry, what you are describing here.

8269             MS OSTERTAG:  It's a little more than an introductory level kind of conversations that are going on because what they do, one of the main purposes of the board of directors ‑‑ and for the record, we have five broadcasters sitting on our board and six music industry representatives.

8270             They are there for the main purpose of having disseminated information and gathered it up from their communities and the artists that are members of their organizations on the things they would like to see FACTOR address in terms of program development, all of which gets distilled, once they have discussed it as a group.

8271             Sometimes one province or territory can have an idea about something, but there could be an adverse effect if that change were to be implemented.

8272             So it is allowing that program development type of discussion to take place.

8273             Aside from that, they take a bit of time to discuss their other challenges, not FACTOR‑related.

8274             COMMISSIONER ARPIN:  If I heard you well, you have 11 members on your board.

8275             MS OSTERTAG:  That's correct.

8276             COMMISSIONER ARPIN:  Five broadcasters and six coming from the music industry.

8277             MS OSTERTAG:  Yes.  We also have two observers.  We have a representative from the Canadian Association of Broadcasters, Pierre‑Louis Smith and Jean‑François Bernier on behalf of Canadian Heritage are at the table also.

8278             COMMISSIONER ARPIN:  But they are not directors.

8279             MS OSTERTAG:  They don't vote, but they are there.

8280             COMMISSIONER ARPIN:  They don't vote.  So they are not part of the decision‑making process.

8281             MS OSTERTAG:  No.

8282             COMMISSIONER ARPIN:  Is the board of directors only making policy decisions or are they making financial decisions, allowing money to ‑‑

8283             MS OSTERTAG:  They make both.

8284             COMMISSIONER ARPIN:  They make both.

8285             MS OSTERTAG:  The board of directors ‑‑ we have a process by which there is a creative decision made, and the board of directors of FACTOR never gets involved in making creative decisions.  That is such a subjective process.

8286             COMMISSIONER ARPIN:  That is left to the juries.

8287             MS OSTERTAG:  That's correct.

8288             And if you are successful in getting through a jury on the sound recording programs that are juried, the board would give you funding.  They are just going to look at the financial commitment.

8289             But it is the board of directors that makes all the funding decisions on all of the programs.

8290             COMMISSIONER ARPIN:  How are the members of the board chosen?

8291             MS OSTERTAG:  The broadcasters have founder seats, and with all five seats that the broadcasters have on our board ‑‑ for example, with Rogers, Rogers will choose who they want to serve on the board.

8292             We have a six‑year rotation policy and it is really up to them who they appoint on their behalf.

8293             COMMISSIONER ARPIN:  So Rogers always has a seat on the board?

8294             MS OSTERTAG:  Yes.  You have Rogers, Standard, CHUM ‑‑ I'm sorry, Corus and Global.

8295             COMMISSIONER ARPIN:  And Global.  So those five broadcasters are the only ones who can appoint directors to the FACTOR Board?

8296             MS OSTERTAG:  They actually have it amongst themselves, because at the time FACTOR was formulated we had a set of by‑laws which are also going to be revamped in June to expand it further.

8297             But the broadcasters discuss amongst themselves who they thing should be ‑‑ talk to each other and talk to each other corporately and they come up with their own game plan and we just accept who they recommend.

8298             COMMISSIONER ARPIN:  Are the appointees of the broadcasters attending the meetings?

8299             MS OSTERTAG:  Yes.  They are attending as many as others.

8300             COMMISSIONER ARPIN:  So to some extent you are more successful than Musicaction, because Musicaction's problem is that the broadcasters don't go to the meeting.

8301             MS OSTERTAG:  No,  We are fortunate that they show up.  You get the odd one where it is challenging for our board, because it is a minimum of 12 meetings a year and then you have your approvals meetings and stuff.  So it can get a bit challenging.

8302             Actually, recently with the change of a couple of the directors on the board, it is really exciting with the new blood that has come in, and I know that their commitment and passion to supporting music I consider and say that I know because of them and their specific knowledge and expertise they brought to the table it has affected positively some artists and the funding they have gotten.

8303             COMMISSIONER ARPIN:  How are the music members picked up?

8304             MS OSTERTAG:  The music industry, we have six seats there.  Four of them have criteria attached to them.  Two are appointed by CIRPA, the Canadian Independent Record Production Association; one is appointed by the CMPA.  In the same way that the broadcasters decide CIRPA decides from its board how that works, CMPA from theirs.

8305             We also, with the merger of FACTOR and the Canadian Talent Library back in 1985 for FACTOR to acquire the assets of the Canadian Talent Library, whose assets were owned by the American Federation of Musicians, they actually allowed the assets to be transferred on the condition that there was a member of the AFofM that was a fully paid dues member in good standing.  So one of them has to be that.

8306             The other two are voted on by the board at large.  We try to take into consideration ‑‑ in fact, we want an artist on the board, we want regional representation and we try to spread it as far as we can to encompass as many sectors of the industry as possible with the seats we have available.

8307             COMMISSIONER ARPIN:  I may have misunderstood you, but I'm now up to eight members of the music industry.  You said there were four coming from CIRPA, one from CMPA ‑‑

8308             MS OSTERTAG:  No, two from CIRPA.

8309             COMMISSIONER ARPIN:  Two from CIRPA, okay.  We are back to six.

8310             MS OSTERTAG:  Sorry.  Yes.

8311             COMMISSIONER ARPIN:  I apologize.

8312             Heritage Canada just implemented the MEC program.

8313             MS OSTERTAG:  That's correct.

8314             COMMISSIONER ARPIN:  What kind of impact will that have on FACTOR?

8315             MS OSTERTAG:  We had actually hoped in some respect, because we are so challenged financially ‑‑ I know one of the criticisms that FACTOR gets is our low approval rate, but it is directly attributed to the fact that we have been successful in getting the word out there about the program.

8316             The MEC program, when it was talked about in theory, thought it was going to free up funds at FACTOR, but in actual fact there are only six companies in English Canada that were dealing with FACTOR, so it is still not enough of a relief.  There is still more money needed for us to be able to respond to the other artists.

8317             I think there is a lot of confusion surrounding the program right now, and once people understand it I think things will settle down.

8318             COMMISSIONER ARPIN:  I'm giving you an opportunity to explain what that program is, because we don't have, at least for the record, enough information about it.

8319             MS OSTERTAG:  All right.

8320             The MEC program ‑‑ and I'm not working for the department.

8321             COMMISSIONER ARPIN:  No, no.

8322             MS OSTERTAG:  But from my understanding, is the ‑‑

8323             COMMISSIONER ARPIN:  But they are not appearing here.

8324             MS OSTERTAG:  Yes.

8325             My understanding is that it is there to help build the infrastructure of the larger Canadian‑owned independent record labels and they are being given envelopes of money with which they can do what they need to do to operate their businesses successfully.

8326             My understanding is there is also going to be an assessment process and a criteria to ensure that they can stay in the program.  No company can get more than $650,000.

8327             I know there was talk that it would be a minimum of $200,000, but in rolling the program out I know there is several that are getting significantly less than that money.

8328             So as a program, it is yet another one that is being launched under financed and, like everything in the music industry, we just aren't getting access to enough funds to effectively meet the needs.

8329             Because the concept of a MEC program ‑‑ from my understanding, and this goes back a number of years ‑‑ was pitched by the Canadian Music Industry to Heritage, but it was requesting $100 million.  When the program finally was announced they said $10 million, and then all of a sudden it became $8.5 million because $1 million was being set aside for publishers and another half a million for administrative costs in the department.

8330             So all of a sudden it is weaning down and it can, in actual fact, be quite scary for those companies that are in there, because as more companies rise up and are able to go into that program the pie is going to get even smaller?

8331             So when it started out with a tenth of what was needed, I think that there is a lot of expectation it is going to free up a lot of money, but realistically it is not enough of a change.

8332             COMMISSIONER ARPIN:  The Heritage Department commitment towards the MEC goes up to the year 2010.

8333             MS OSTERTAG:  Yes.

8334             COMMISSIONER ARPIN:  I think it is the fiscal year ending on March 31, 2010.

8335             That is correct?

8336             MS OSTERTAG:  That's correct.

8337             COMMISSIONER ARPIN:  The funding to FACTOR, has it been already set up to the same date?

8338             MS OSTERTAG:  Yes.

8339             COMMISSIONER ARPIN:  Or is it a yearly commitment?

8340             MS OSTERTAG:  No.  We were suffering through that and it has caused a lot of challenges for us, but at the present time we have an agreement, a fully executed document.

8341             However, it has the proviso, as I think it is with all government documents, that it can be cancelled at any time for any reason with no repercussions on our part.

8342             So how good is the ‑‑

8343             COMMISSIONER ARPIN:  Your contract with the Department of Heritage, does it stipulate that you will need to have broadcasters' commitment to it, or direct funding from the broadcasters?

8344             MS OSTERTAG:  We are committing that we have that.  Not that we will get it or maintain, but that we have to have it, yes.

8345             COMMISSIONER ARPIN:  So at the time of signing the agreement obviously the broadcasters were ‑‑

8346             MS OSTERTAG:  We were completely unaware that there was the possibility of other things in the works.

8347             COMMISSIONER ARPIN:  So the submission that the CAB makes of a Super Starmaker Fund ‑‑ obviously there have been a variety of views expressed throughout this hearing and when you read the filing of the CAB you come to the conclusion that there will be no more money going to FACTOR.  We have commitments from the CAB and the major players know that the Starmaker will provide the funding to FACTOR rather than the money coming directly from the broadcaster.

8348             If that was the scenario, the money was channelled through Starmaker to FACTOR, will that impair your ability to getting the money from Heritage?

8349             MS OSTERTAG:  I can't speak to that.  I just know that Canadian Heritage has gone on record as saying that in the event that the broadcaster money is no longer being provided to FACTOR they are rethinking what they are doing with FACTOR.

8350             I have actually asked them ‑‑ it's kind of a scary place to be when you hear something like that ‑‑ here are a lot of artists out there with a huge expectation what we do ‑‑ and I said, "Is this a poker game?" and they said, "We don't play games."  So I think it is a very real threat.

8351             The idea that FACTOR would, after 24 years of service, be in the position ‑‑ and it's unknown because it is not clear at this point in time, how the CAB would actually funnel this money.  How do you develop programs and plan things if you are at the mercy yet again ‑‑ you need some stability.

8352             We have just come through a very unstable time with the department in having one‑year contracts and the impact to the industry is very clear, it has us behind in program development.  Because if you are not sure you are going to be around in 12 months you go, "Well, what is the point in doing it all?"  It's difficult to do it when you don't know what your money is going to be.

8353             If FACTOR is going to continue to be effective it needs to be in control of its own destiny.

8354             COMMISSIONER ARPIN:  I know that Musicaction is not appearing at this hearing, it hasn't filed anything, but to your knowledge is Musicaction in the same situation?

8355             MS OSTERTAG:  I don't believe so, because at Musicaction they have been recognized as the agency and are currently operating with two respective Boards of Directors with two different mandates.  They are managing the funds for both, so they know what is going on.

8356             COMMISSIONER ARPIN:  Yes.

8357             MS OSTERTAG:  It is the complete opposite for us.

8358             COMMISSIONER ARPIN:  But my question relies more on the commitment made by Heritage to Musicaction.

8359             Or is there a commitment by Heritage, to your knowledge?  If you don't know, you don't know.

8360             MS OSTERTAG:  It would be the same as ours.

8361             COMMISSIONER ARPIN:  I guess it will be the same as yours.

8362             MS OSTERTAG:  Yes.

8363             COMMISSIONER ARPIN:  All right.

8364             When we look at your annual report one of the complaints that we are hearing is that you are only reporting top‑of‑the‑line information.  You don't give that many breakdowns or information on who get's what and how much or whatever.

8365             Is there a reason?

8366             MS OSTERTAG:  There was a reason, but also it is the first time ‑‑ we have actually very recently heard about the complaint so we are actually disclosing all of those numbers.

8367             One of the reasons we didn't is because there is an assumption when people attach a number to a project that that is what the project costs, when in actual fact our contribution to it may only be 10 or 12 percent of the cost and it can result in there being a negative thing, "Oh, well they made that record for so little it can't be very good", and it could have hurt people.

8368             In our desire to try to not let any of the information be prejudicial to a project, to allow it to stand in the marketplace on its own, we perhaps come up against some criticism, but it is our intention that our annual report that will be released at the end of June for the fiscal ending March 31st will include those numbers.

8369             They have been available.  We were never asked for them before and understand the desire, so we are prepared to give it.

8370             COMMISSIONER ARPIN:  Mr. Chairman, I think those were my questions.

8371             THE CHAIRPERSON:  Thank you.

8372             Commissioner Cugini...?

8373             COMMISSIONER CUGINI:  Good morning.

8374             MS OSTERTAG:  Good morning.

8375             COMMISSIONER CUGINI:  Just relating back to your Nickelback example that you mentioned in your oral presentation this morning, I'm assuming at that time that Nickelback received the $5,000 from FACTOR you considered them to be an emerging artist, at that point?

8376             MS OSTERTAG:  An unknown.

8377             COMMISSIONER CUGINI:  Right.

8378             MS OSTERTAG:  They are not even emerging.

8379             COMMISSIONER CUGINI:  All right.

8380             Do you, as FACTOR, have a definition of "emerging artist"?

8381             MS OSTERTAG:  You know, it's an excellent question and I have heard the question has been asked in this forum a number of times.

8382             It would take probably greater minds than mine to actually come up with a definitive because you can say it is the number of releases they have had, it could be airplay potential that is achieved, it could be based on number of years in the business, it could be that they are profitable.  There are many, many things.

8383             But what I can do is, I can give you a real example of an artist that I think is an emerging artist to try to illustrate a bit the complexity of trying to come up with that definitive definition.

8384             I was having lunch this week with a young country artist by the name of Erin Pritchard.  He is out of British Columbia.  He has been in the business quite a number of years, 10, 12 years.  A number of years ago he competed in a FACTOR and Corus jointly funded initiative called Project Discovery.  He was actually the winner of the competition.

8385             He has gone on, he released his first album, he got some success at radio airplay.  He has released his second album and his first single from that album went No. 3 on the Canadian charts.  He is just releasing his second one.

8386             He went into a Tim Hortons to buy a coffee and there was a fan there working behind the counter, "Oh my God, it's Erin Pritchard", you know, and all excited and everything.  And he is kind of cute, so it didn't hurt.

8387             Anyway, he was standing there and he was absolutely embarrassed, because he was paying for the coffee with his debit card and he didn't know if he had enough money and the card wouldn't let him pay the $1.40 for his coffee.

8388             So it's like ‑‑ it's all over the map in trying to really nail it down because to me he is emerging still because he is not able to financially sustain himself and every penny he has is being reinvested back into his career.  There isn't anything left over to be able to accumulate anything.

8389             All of it and then some, because he is still having to knock on our door to get the support.  So in my mind he is still emerging, yet at radio I'm sure they would say, "No, he is established now because he has had three hits on radio."

8390             COMMISSIONER CUGINI:  So in applying for FACTOR funding there isn't a box where someone would check "emerging" and that would put them into one category or another to receive funding?

8391             MS OSTERTAG:  You do that through the programs we have where you have those artists who are applying to, say for example, our Independent Recording Loan Program.  That is a program for artists who have absolutely no distribution and they are at the very, very beginning, in many cases making their first CD.

8392             So we will give them up to $20,000 to get started and we give them matching production funds.  They are emerging.

8393             But also you have them where some of them have distribution and they are still emerging.

8394             COMMISSIONER CUGINI:  So Nickelback doesn't qualify any more for FACTOR funding?

8395             MS OSTERTAG:  No, they are not emerging any more.  No.

8396             COMMISSIONER CUGINI:  Or for any FACTOR funding?

8397             MS OSTERTAG:  I honestly ‑‑

8398             COMMISSIONER CUGINI:  Do they still qualify or would they be eligible?

8399             MS OSTERTAG:  I doubt that they would, because the only program probably left that they would be eligible for would be touring, and on a tour you only actually receive funding from FACTOR if you are losing money.  If they are losing money on a tour, then they so need a new team working for them.

8400             COMMISSIONER CUGINI:  Thank you.

8401             Thank you, Mr. Chair.

8402             THE CHAIRPERSON:  Thank you.

8403             Commissioner Pennefather.

8404             COMMISSIONER PENNEFATHER:  Thank you, Mr. Chairman.

8405             Good morning.

8406             MS OSTERTAG:  Good morning.

8407             COMMISSIONER PENNEFATHER:  Mr. West, in your remarks you said:

"We advocate ‑‑ we explore the possibility of a common administration for the various funding programs."  (As read)

8408             Could you expand for us, please?

8409             MR WEST:  You know, FACTOR has worked extremely well for 24 years and there has been a lot of talk lately about transparency of the programs and we feel we are extremely transparent in that any information requested from us is certainly available to anybody at any time.

8410             You know, when you look at people applying for money right now, the way it is applied for, it could be an organization or a label or it could be the artist directly, if you are applying to FACTOR and you receive your funding then you go on to the next level of funding, which is Starmaker.

8411             They are housed in two complete different places, two complete different administrations.  The dialogue has to be very close between the organizations in order to make sure there are no what people perceive to be as double dipping, you know, marketing funds that are expended.  You have to be very careful.

8412             FACTOR offers marketing money as well and some of that marketing money to get to the next level is offered by Starmaker.  we want to make sure that money is not received twice, by mistake or whatever process, but it would really, really help the process if it was under one common administration.

8413             COMMISSIONER PENNEFATHER:  So similar to the Musicaction, La Fond Radiostar?

8414             MR WEST:  That is a perfect scenario, and that is what we would have liked to have happened.

8415             COMMISSIONER PENNEFATHER:  That's what you have in mind discussing over the next while?

8416             MR WEST:  Absolutely, with all the stakeholders.  Sit down at a table and say, "Let's formulate something here and make it work."

8417             COMMISSIONER PENNEFATHER:  Thank you.

8418             THE CHAIRPERSON:  Thank you.

8419             Commissioner Arpin...?

8420             COMMISSIONER ARPIN:  Mr. West, you just referred to one of the goals of having a common administration for the two funds is to make sure that there is no overlap or no double dipping.

8421             Has there been any double dipping in the recent past?  Because Starmaker has only existed for three or four years now.

8422             MR WEST:  I will have to defer to Heather for that answer.

8423             MS OSTERTAG:  I wouldn't say that it has happened intentionally, but yes, it does happen.  Currently there is a representative from Starmaker who shares information with one of my staff to compare things, but it is doubling up on the paperwork and everything.

8424             Something I would like to add to Jim's comment, there is an ease for the industry if they know where to go and it is all laid out in one place, the one‑stop shopping.  It is a very complicated thing in understanding where it is that you should be going and for what and to be able to actually have it that you could say, "Okay, with the FACTOR funding it goes to here" and then "With the Starmaker money it goes to here" and then this would go to here.

8425             There is a huge logic to it and I think that the success that is happening at Musicaction really speaks to why we should be doing that and we should be taking a page from their book.

8426             COMMISSIONER ARPIN:  Thank you.

8427             THE CHAIRPERSON:  Thank you very much.  Those are our questions.

8428             MS OSTERTAG:  I had a report.  I understand yesterday you were asking for the amounts of money radio has given to FACTOR.  You were asking one of the broadcasters.

8429             I have had the report emailed to me and I printed out a copy if you want it.  It records the funding since our inception ‑‑

8430             THE CHAIRPERSON:  Okay.

8431             MS OSTERTAG:  ‑‑ on what each broadcaster ‑‑ just to assist you.

8432             THE CHAIRPERSON:  If you hand it to Madam Secretary ‑‑

8433             MS OSTERTAG:  Okay.

8434             THE CHAIRPERSON:  ‑‑ we will have it on the record.  Thank you.

8435             Madam Secretary, would you call the next item, please.

8436             THE SECRETARY:  Thank you, Mr. Chairman.

8437             I would now invite Radio Starmaker Fund, Mr. Chuck McCoy, to come forward for his presentation.

‑‑‑ Pause / Pause

8438             THE CHAIRPERSON:  Whenever you are ready, Mr. McCoy.

PRESENTATION / PRÉSENTATION

8439             MR. McCOY:  Good morning, Mr. Chairman, members of the Commission.  I had the pleasure of being up before you yesterday in my role as a programming executive for Rogers but today I am here as the Chairman of the Radio Starmaker Fund.

8440             I would like to start by thanking the Commission for the opportunity to appear and take part in this proceeding.

8441             Before I begin, I would like to introduce the members of our panel and we are fortunate to have both of our independent Board members with us today.

8442             To my far right is Andy McLean and he is the founder and the Managing Director of the North by Northeast Festival in Toronto which opens next week ‑‑ a little plug‑in there for Andy ‑‑ one of Canada's most important events for discovering new music.  Andy is also an artist manager and an accomplished musician.

8443             Beside him, to my immediate right, is musician/writer/producer Jian Ghomeshi.  Many of you may know Jian from his musical career as a lead singer and songwriter in the platinum‑selling Canadian band Moxy Fruvous and more recently you probably know him from his work as a national host on CBC Television Newsworld and CBC Radio One.

8444             To my far left is Rachel Oldfield who has been the Finance and Administration Manager of the Starmaker Fund from its inception.  She is the keeper of all the statistics and financial information.

8445             And next to me is our current Executive Director Mr. Chip Sutherland who, in addition to fulfilling the role of Executive Director is also the original architect of the Starmaker Fund.  In May of 2001, Chip was hired by the first Board of Directors to design the fund and he has been involved in its evolution and operations ever since that time.  He is a well‑known entertainment lawyer who has been involved in the music business in many different capacities for the past 15 years.

8446             Now, you have our submission, our written submission, and I thought we would simply highlight a few points.  I will do some and then I will ask Jian and Chip to say a few words.

8447             As Chair of the fund for almost four years now, I think I am first and foremost the most impressed with the mandate of the fund and how well it has worked in practice.  In some ways, I think the Radio Starmaker Fund established the concept of truly artist‑centred funding.

8448             The fund's primary objective is to support artists with established track records regardless of their industry structure or affiliation.

8449             The secondary objective is to recognize the role of the independent record industry and how we can help preserve all forms of independent recording in Canada.

8450             When we look at the proposed funding, the first question is always how will this benefit the artist and the second question is are there any adjustments or accommodations that need to be made to ensure that this policy is fair to the independent sector.  This is how we define the artist‑centred approach.

8451             Now, the interesting part of this for me is that these are all just ideas until they are actually put into practice and in practice these broad guidelines have proven to hold true to achieving our goals.

8452             Here, I would like to point out some of the statistics in relation to the fund.

8453             Major labels receive 20 per cent of our funding; CIRPA‑independent companies receive 35 per cent; non‑CIRPA‑independent companies receive 35 per cent; and quasi‑indies ‑‑ those would be artists who own their own records but license them to majors ‑‑ they receive approximately 5 per cent.

8454             Part of this is explained by the fact that we have built in accommodation for the indies that allow them to access 2:1 funding for dollars invested, whereas major labels are only able to access 1:1 funding.

8455             As for the artists, as an example, I noticed this week that Black Crows were here in Ottawa and they were supported by Matt Mays as an opening act.  We are happy and proud to say that we provided the funding for Matt Mays to make that possible.

8456             As a broadcaster, it was also particularly important to me to see that the fund is able to foster the careers of artists that we can play on the radio.  This represents the true nature of the partnership between music and radio.

8457             To do that, we knew we needed to spread the funding across a broad spectrum of artists and that had to include many genres.  The result is 83 per cent of Starmaker‑funded artists received significant airplay in this country.

8458             Finally, I would like to say a word about our administration.  I don't think I truly appreciated the full value of our website.  It is truly an amazing administrative tool and it has been invaluable to us in managing the fund and allowing us to easily adapt program and criteria for the website.

8459             Now at this point, I would like to ask Jian Ghomeshi to give you some of his thoughts from an independent perspective.

8460             MR. GHOMESHI:  Thanks, Chuck.  And thank you, if you will forgive me, I will make my comments somewhat informally or anecdotally.

8461             I have been on the Board for two years and I have been directly involved in the music business for about 15 years.  I am quite proud to be part of the Radio Starmaker Fund experience.

8462             I think these are great days for Canadian music, for Canadian artists.  I have said that a few times as a broadcaster.  I really think, and the results are there, we are doing disproportionately great work, not just domestically but internationally ‑‑ Canadian artists are ‑‑ and I am so proud of that and I think Radio Starmaker has been a big part of that in the last two, three, four years especially, obviously.

8463             The bottom line for me is that Radio Starmaker Fund works.  It is lean, it is supportive, it is effective, it is not bogged down in administration.  It is artist‑centric, and really the artists that we look at and support and fund are quite a diverse lot, you know, both in terms of the genres and whether they are signed to major labels or independent labels or major indies, et cetera.

8464             I don't think it is comprehensive.  I think that there are artists out there that don't meet the criteria to apply for this fund.  But in terms of the mandate of this fund and the artists who are at a level to be taken to the next level and become stars, whether it is on radio, sales, et cetera, I think this fund has done its job and done its job very, very effectively.

8465             I will just say, as an artist, after spending many years in a band and selling half a million records and touring and doing that, to me, it comes down to ‑‑ and being a producer and manager ‑‑ it comes down to a couple of nutshell elements of what it takes to get somewhere as an artist in this country and to carry music abroad.

8466             On the one hand, you have to create the content to make a record, et cetera.  On the other hand, you have to get it out there.

8467             In terms of creating the content, the world has changed and we know that.  You can now make a world‑class quality record out of your basement because of new technology that you wouldn't have been able to in the past.

8468             In terms of getting it out there, we still ‑‑ it still takes resources, it still takes support, it still takes funding, marketing, promotion and touring, and that is where Starmaker has come in.

8469             Chuck mentioned matinees.

8470             We could look at an artist like Joel Plaskett on the east coast who is touring with Ottawa's Kathleen Edwards right now in the States with Starmaker support.

8471             We could look at a band like Metric who is an underground critically acclaimed band from Toronto that, with the support of Starmaker, has gone on to open for the Rolling Stones at Madison Square Garden and do effective things.

8472             So in a nutshell, I think from an artist perspective, I am proud to see what this fund is doing in carrying artists at a certain level to the next level.

8473             MR. McCOY:  Thank you, Jian.

8474             Andy would be, I know, happy to answer any questions you might have.

8475             Before we get to those questions though, I am going to ask Chip Sutherland to say a few words and just clarify a few points for us.

8476             MR. SUTHERLAND:  Thank you, Chuck.

8477             I have been listening this week and I thought it would be helpful, since I am sort of the mechanic of the fund, to just address a couple of issues to clarify.  I have got five of them.

8478             The first one is the commercial fund.  Everyone has been throwing the phrase around "commercial fund" but what does that mean?

8479             There is sort of a presumption that it means big established pop rock artists like Avril Lavigne and Nickelback.

8480             But "commercial" for our purposes means "where the artist intersects with people paying for their music."  So we have people like Jane Bunnett, Alpha Yaya Diallo, Montreal Jubilation Gospel Choir, Daniel Taylor and Taima, to just name a few.

8481             Our written submission includes in Appendix 1 a breakdown of all of our funding to date by genre.  You will see that pop rock artists make up only 50 per cent of our funding.  The other 50 per cent are niche genres in some of these lower levels.

8482             Also, our sales levels for being approved for the fund.  If you are a jazz artist, you only have to sell 2,500 records to get onto our fund.  If you are an independent artist in pop rock, it is 10,000.  If you are a major label artist, it is 15,000.

8483             So we don't have one threshold.  We adjust the thresholds for the genres.

8484             The amount of funding.  There definitely was confusing, I think, about this and for good reason.  It is very complicated.  I see Lynn Buffoni sitting here today and if it wasn't for her, I would still be trying to figure out these numbers.

8485             I have provided a chart of the CAB contributions to date.  We have turned that into a three‑year rolling capital funding model and that is how we rationalize our funding because we only have one source of funding.

8486             You can see on this chart if you turn to it ‑‑ it is a lovely hot pink graph ‑‑ it goes from 1999 to 2010 and you can see that there is a very precipitous drop‑off at the end and this is because of how the transactions are paid.  So we will ‑‑ obviously, in the next two or three years our funding drops right off.  I can talk about that more in question and answer if you would like.

8487             Artist‑centring.  Chuck gave you some examples of artist‑centring.  I just want to clarify this doesn't mean artist payment.  It doesn't always mean the payment goes into their bank account.  Sometimes the labels who are driving marketing, they are the best people to administer that money.

8488             But it does give us the flexibility.  For example, Jimmy Rankin has his own record label song, Dog Music.  We pay him directly.  It is irrelevant to us.  We are based on sales criteria for the artist.  So it doesn't matter how their industry is structured.

8489             It also allows us to pay artists direct touring subsidies.  In many international countries, the artists don't have a record label and therefore by paying artists directly we are able to infuse that, as Jian was addressing.

8490             Emerging artists.  I know this is a big issue.  There are lots of questions and, of course, we don't have any position regarding the CanCon issues there.  But I would like to point out that 52 per cent of the artists that we fund, we are funding on their first or second record.

8491             The concept of Starmaker was to grab artists as they are starting to take off and provide incremental investment right at that point where they need it to shoot off into the next level and that is what we are trying to do.

8492             The control of the fund.  Just a couple of references.  Honestly, I think because the name is Radio Starmaker Fund, I think people think it is radio's fund.  But there are only four out of 10 radio Board members on our Board.

8493             We have by‑laws that we spent quite a bit of time revising the first year of the fund, that were unanimously adopted by the Board, that have very detailed criteria about how decisions are made.

8494             So just to be clear, we are very serious about governance and how the Board operates with a strict set of by‑laws and radio has four out of 10 seats on the Board.

8495             So those are my comments.

8496             MR. McCOY:  That really completes our oral presentation and we are here to answer any questions that you might have.

8497             THE CHAIRPERSON:  Thank you.

8498             Commissioner Pennefather.

8499             COMMISSIONER PENNEFATHER:  Thank you, Mr. Chairman.

8500             Good morning, everyone, and thank you for the presentation.  It is very helpful, indeed, filling in some of the blanks but I have got a few more.

8501             Let us start with the governance question first, and kicking off from Mr. Sutherland's comments about the composition of the Board, how is the Board chosen?

8502             MR. McCOY:  Well, there are ‑‑ each body ‑‑ for instance, the four broadcasters ‑‑ the CAB appoints the representatives they want to have on that Board and it is done via the four major broadcasters: Rogers, CHUM, Corus and Standard.  They make the decision as to who is going to represent them.

8503             The same is the case for CIRPA.  Their board appoints members to be part of our Board, as does CRIA.  And the two independent members are selected by the Board itself.

8504             I am not sure ‑‑ Chip, have you anything to add to that?

8505             MR. SUTHERLAND:  No, thank you.

8506             MR. McCOY:  Okay.

8507             COMMISSIONER PENNEFATHER:  Should the CAB proposal, which, simply put, would redirect all funding through the Starmaker Fund, would the composition of the Board or its selection process change?

8508             MR. McCOY:  Thank you, Madam Commissioner.  I don't like to duck a question but I think that Radio Starmaker Fund was formed five years ago on the basis of some governing principles and guidelines from the Commission and some money from the broadcasters and we are prepared to respond in the same way should those change, either the governing principles or the amount of money.

8509             I don't think that I am in a position or my Board members here are in a position to discuss what we might or might not be able to do, certainly not without discussing it with our own Board.

8510             But I guess to say we have been given some principles and some money before and we made it work and we would do the same with whatever decision you make.

8511             COMMISSIONER PENNEFATHER:  One of the principles is the breakdown with major labels, indie funds.  That was part of the, going in, principles and premises and I just wanted to clarify.

8512             On page 3 of the presentation this morning, the percentages add up to 95 per cent, first point; and second point, the annual report that I have in front of me here of 2004‑2005 has a significant difference in the percentages to each of the groups.  So perhaps you could just explain that to us.

8513             MR. McCOY:  Yes, and if you are getting into the mechanics and numbers, I am going to ask our Executive Director Chip Sullivan to follow up on that one.

8514             MR. SULLIVAN:  Thank you.

8515             The other 5 per cent is music associations.  We do sponsor the East Coast Music Association and the WCMAs.  We give them travel grants for artists to get to their conferences.  We do the same thing with the Junos.  It is one of our ways to trying to provide some regional outreach.

8516             When the Junos started travelling, one of the problems they have is there are many artists that are independent being nominated for Junos and they live in Edmonton and they are a classical violinist and they don't have a label paying for them to go to the Junos in Halifax.  So we provide grants for Juno nominees.  So that is the other 5 per cent.

8517             As for the difference in the financial ‑‑ Rachel.

8518             MS OLDFIELD:  The difference between the annual report and the written submission in March to the CRTC is the annual reports track the funding by artist.  If you are a major label artist, the money was 100 per cent major label.

8519             In our submission in March, the money was tracked by company, which is a more detailed breakdown where if that major label artist was to receive touring money, the touring money was paid directly to the artist company and the label initiatives would have been paid to the major label.

8520             COMMISSIONER PENNEFATHER:  So today when you say CIRPA‑independent companies receive 35 per cent, and I am looking at the annual report, it says indie labels 69.9, it is not the same?

8521             MS OLDFIELD:  Yes, it is not broken down by ‑‑ it is just simply indie artists as opposed to indie companies and the breakdown of the companies.

8522             COMMISSIONER PENNEFATHER:  Okay.

8523             MR. SUTHERLAND:  And if I can just say, Madam Commissioner, why would we break it down that way, and the point is that there are all kinds of levels of the independent music industry and we are just trying to reflect that there are different aspects to that infrastructure and we are aware of it, that's all.

8524             COMMISSIONER PENNEFATHER:  Okay, that is helpful.  I guess perhaps if there is follow‑up, you might want to give us a little bit more of that because I think that ‑‑ as I said, it is one of the principles going in and as we look at the future it is important to understand, not necessarily drill down to the point where we are right in there ‑‑ we shouldn't be ‑‑ but just to get a better sense of it.

8525             You heard Vice‑Chair Arpin ask FACTOR about the MEC.  Could you also give us your perspective on, for example, the difference between the Starmaker Fund and the Heritage MEC program and how you understand that program to be functioning?

8526             MR. SUTHERLAND:  Well again, we don't.  They are just rolling it out.  We have only had preliminary discussions in the fall when Heritage was kind enough to inform us what they were planning so that we could start predicting it as we rolled out our programs.

8527             What we understand to date is that it is business plan funding for the bigger independent companies that provides them with significant funding on a business plan model as a per‑project‑based model.

8528             Since the program is brand new, we haven't determined yet ‑‑ our board hasn't yet decided how will we manage funding MEC companies.  That is something the Board has yet to look at because we haven't had them apply yet as MEC companies.

8529             But the basic premise, as we understand it, is Heritage is putting additional money into the music industry.  They are putting money targeted specifically at independent infrastructure, the bigger independents, based on their performance I believe is how they are doing it.  So it is basically additional funding in the ‑‑ I believe you have heard the word "ecosystem" a few times this week, so there is more fish food in the fish tank I would say.

8530             COMMISSIONER PENNEFATHER:  It usually brings more fish, too.

8531             MR. SUTHERLAND:  Well, hopefully some more varied colourful fish.

8532             COMMISSIONER PENNEFATHER:  The demand is always there.

8533             But so I understand, then, a company accessing money through the MEC program could also access money through Starmaker for marketing and promotion?

8534             MR. SUTHERLAND:  We haven't discussed that at the board level because we didn't know ‑‑

8535             COMMISSIONER PENNEFATHER:  Potentially?

8536             MR. SUTHERLAND:  Potentially, absolutely.  We have made no decisions on that.

8537             COMMISSIONER PENNEFATHER:  Then again concerning the chart that you have given us I did have a questions on the financials.  You have also laid that out in your written intervention.

8538             In the written intervention you also make the point that you will have stable funding in the next three years.

8539             I was reading from that, that next three years is the CAB proposal three‑year transition period.

8540             Did I read that correctly?

8541             MR. SUTHERLAND:  You are very close.  Three years starts for us 2006.  So it is actually the first two years of the CAB.  So we have stable funding right now because of our capital funding model.

8542             If you look at this little ski hill, what the board did in 2005 is we rationalized the funding and spread it out on a balance basis so that we wouldn't end up with programs that we couldn't fund over the next three years.  So '06‑'07.

8543             Our fiscal is September to September like the broadcast year, so '06‑'07, '07‑'08, '08‑'09 are the three stable years.

8544             COMMISSIONER PENNEFATHER:   The $3 million approximately is the demand number that we saw in the CAB proposal based on historic demand on the Starmaker Fund, and that would be secured and guaranteed?

8545             MR. SUTHERLAND:  Yes.  What we have in our budget, the capital fund model is $3.2 million a year.  It is $800,000 per quarter for our grant program; it's $300,000 a year in the association funding that I referred to earlier.  We are running at roughly $450,000 in administration.  So about $4 million is the real ‑‑ that is what our capital fund model allows for right now.

8546             The only thing I would add to the CAB model is that our international touring program is very popular and it is broad.  It has only been in place for 18 months and in terms of an arc of funding I suspect the demand will go up for that.

8547             So there is likely ‑‑ if I was truly giving a picture of the true demand today, it is probably more in the $4.5 million range.

8548             COMMISSIONER PENNEFATHER:  So am I looking at demand here on this, or contribution?

8549             MR. SUTHERLAND:  No, this is the painful chart of taking the transactions from the MLO approvals that you have.  We went to the CAB.  The very first thing I did was say to them, "How much money are we going to have and how do we get it and how do I know?"  We agreed with the broadcaster ‑‑ they were very cooperative ‑‑ to say we will stagger our payments in equal instalments over seven years and guarantee you those instalments, and they have lived up to that promise.

8550             So this is if you took all the multiple licence transactions, divided them up by the time of when they occurred and how the money is collected over a 7‑year period, as you would all know from being involved in it ‑‑ there was a big spike in these transactions, that's why you see the spike in the funding, and then it trails off now that the transactions have trailed off.

8551             So this is literally ‑‑ this is drawn right out of our capital fund model.  This is how we budget ourselves.  These are the numbers we expect to receive.

8552             COMMISSIONER PENNEFATHER:  Receive, all right.

8553             MR. SUTHERLAND:  That's right.

8554             COMMISSIONER PENNEFATHER:  All right.  That's helpful.

8555             Which connects a little more to the annual report in terms of the contributions line and then the expenses line.

8556             MR. SUTHERLAND:  If I could just one issue on the annual report, we are very strict about GAAP accounting rules on fund accounting and it is a little bit different.

8557             The CAB collects for us because it is an efficient thing to do, they are already in touch with all the transactions and tracking it.  When we receive the money we have to report it.

8558             So I think somebody suggested in one of our years there was $5 million, but that is just a cashflow issue.  It is really irrelevant.  We don't model on cash or we would run out of money and would not be able to fund programs.  We model on this contributions chart and then we just manage our cashflow appropriately from there.

8559             COMMISSIONER PENNEFATHER:  The drop off, again to be clear, this is based on tangible benefits contribution only?

8560             MR. SUTHERLAND:  The lexicon, I call it MLO money because I just made that up, but it's the multiple licence ownership transaction.

8561             COMMISSIONER PENNEFATHER:  We mean the same thing.

8562             MR. SUTHERLAND:  If that's tangible benefits, then that's what it is.

8563             COMMISSIONER PENNEFATHER:  All right.

8564             Technically CTD contributions can also come via other contributions, as in the 3 percent in the CAB plan.

8565             Is that a quantifiable number and is that include in this amount or is this just the tangible benefits?

8566             MR. SUTHERLAND:  This is just tangible benefits.

8567             We do receive from time to time, not very often, a few small CTD amounts.  There are some new license commitments we have received recently.

8568             COMMISSIONER PENNEFATHER:  Yes.

8569             MR. SUTHERLAND:  Newcap has been very supportive of us.  So there will be a few of those, but they are so new that they haven't hit this model yet.

8570             COMMISSIONER PENNEFATHER:  The reason I'm asking I guess is obvious:  Would that waylay, would that change the drop?  If this is related just to tangible benefits, if there were other contributions through other doors would that change the drop off?

8571             In other words, do you have another plan, another backup plan to take care of this drop off?

8572             MR. SUTHERLAND:  We have no backup plan.  The Starmaker funds, as Chuck mentioned, the mandate was:  There are going to be these multiple license transactions.  We think this would be a good use of this money to put it into a star system so please build it.  We have known from the beginning that it had this arc and we have built it that way, stabilized in the last three years.

8573             One of the things about our capital fund model ‑‑ and it is one of the advantages of not being in a government model where you have to answer every March 31st for the money I suppose ‑‑ is we can model it like a business over three years and provide ‑‑

8574             To answer your question, if somebody showed up tomorrow and said, "Here is $2 million", we don't just spend it that month, we build it into our three‑year ‑‑ it's a three‑year rolling capital fund model.

8575             Because one of the problems with building your programs is, you can either build 15 programs and then not be able to fund any of them because you have too much demand for too many programs.

8576             One of the real challenges when we first started with this was to say, "Well, what can we afford to do, because we have a finite amount of money and it is for a specific purpose."

8577             For instance, we didn't do international touring at first because we didn't feel we had enough money for it, and then once the transactions increased we said, "Well, now we do have enough budget" so we added international touring.

8578             I hope, to answer you question, there is no plan.  As money comes in we will adjust the capital funding model, and it comes in generally in these spaced out increments so we just adjust as we go along.

8579             COMMISSIONER PENNEFATHER:  One of the comments that I read in one submission ‑‑ and you have mentioned it yourself ‑‑ is that Starmaker Fund is funding ‑‑ I think you used ‑‑ no that's the airplay, 88 percent, or a similar amount, of response to the demand.

8580             MR. SUTHERLAND:  Yes.

8581             COMMISSIONER PENNEFATHER:  Am I more or less correct on that, that you are responding to the demand at that level?

8582             MR. McCOY:  Yes.  Ninety‑one percent of all the qualifying applications are approved, and they are approved to, I believe, just over 80 percent of the total funding.

8583             MR. SUTHERLAND:  Yes.  We measured two things.  One is the number.  You get 30 applications, of those 30 generally 27 of them will be approved.  Of the 27 that are approved, they generally get about 83 percent of them ‑‑ which I think is the number you are talking about ‑‑

8584             COMMISSIONER PENNEFATHER:  Yes.

8585             MR. SUTHERLAND:  ‑‑ of the money they ask for.  Now, that is because we are able to set very specific criteria around what it is you are qualified ‑‑ our website is very detailed in terms of what you can get from us so it helps to steer that funding and make it more certain for everyone.

8586             MR. GHOMESHI:  Which is, I might add, one of the things I like, which is that it is not whimsical or subjection on behalf of the board in terms of where the money is going, it is if you meet the criteria and you have sold some records, you will probably get the funding.

8587             COMMISSIONER PENNEFATHER:  speaking of that, one of the main components of the programs is the direct board approval segment.  That would appear to cover a large part of the grants.

8588             Is that correct?

8589             MR. SUTHERLAND:  Direct board approval is FACTOR's process.

8590             COMMISSIONER PENNEFATHER:  All right.

8591             MR. SUTHERLAND:  We don't have a direct board approval because everything is sales‑based criteria.  An artist could show up tomorrow that has no track record, that is not on a label of any kind that anyone has ever heard of but, as Jian can talk to, can be the next big thing and if they hit that 10,000 unit level, they stick an application in, they get money.

8592             COMMISSIONER PENNEFATHER:  The question I asked earlier I wondered if you would comment on, Mr. McCoy, the possibility of a common administration of the funds in the context as described by FACTOR.

8593             Do you have any comment on that?

8594             MR. McCOY:  Well, I'm going to duck the question again a bit, because I really don't think that I can comment on what changes we might make to Radio Starmaker fund, what might work better for all the funds that are out there, including Radio Starmaker and FACTOR.

8595             I think I would only say that ‑‑ as I say, first of all, we haven't discussed that with the board an in terms of governance we wouldn't make a public statement on that.

8596             But I guess I would say and reiterate that what we have been doing for four years has been working and we are comfortable in continuing with the way it has been going.

8597             COMMISSIONER PENNEFATHER:  But the concept of a common administration is a little different, like let's say the way that Musicaction, Fond Radiostar are currently administered together.  This is what I believe has been put on the table as potential going forward.

8598             It's a little different than all the funds going through Radiostar.

8599             Is that something that could be contemplated or is it again something that you would want to discuss?

8600             MR. McCOY:  You know, Madam Commissioner, going back to what we were saying in our oral presentation, in reality we are a very independent fund.  We have a board that is comprised of people from all segments of the industry, both music and radio.  As Chip said, five years ago this Commission provided us with some governing principles and the broadcasters supplied some money and we built a fund.  That included administration.  We are really willing and able to take direction again and whatever funding is provided, including administration or however you see fit to construct it.

8601             MR. SUTHERLAND:  If I could just add, just on the administration because it sounds like just a vague word, we have two and a half employees and we have a website.  That is the extent of our administration.  It is not exactly a cumbersome ‑‑ I think Jian described it as lean.

8602             But the one advantage of having put such an investment in our website is that we are a 100 percent paperless web‑based application.  It is a fairly slim operation.

8603             COMMISSIONER PENNEFATHER:  Thank you.  Very helpful.  Thank you very much.

8604             THE CHAIRPERSON:  Vice‑Chair Arpin.

8605             COMMISSIONER ARPIN:  Obviously in this graph you are making the assumption that there will be no more transactions.

8606             Why are you making that assumption?

8607             MR. McCOY:  I will answer that ‑‑

8608             COMMISSIONER ARPIN:  Because you are living in the real world or you are living on the ‑‑

8609             MR. McCOY:  Well, Commissioner Arpin, I will answer that and then I will ask Chip to follow up.

8610             Preparing the capital funding model we never want to or we are not able to anticipate funding that might or might not be coming.  So we are really preparing our funding model based on the certainties that we have.  Again, that may change and there may be funding from other places and that would change the capital funding model.

8611             Chip, if there is ‑‑

8612             MR. SUTHERLAND:  I think the other thing, what you don't see here, I was being very specific about the existing contributions, but we have a three‑year rolling model.  So if next month in your wisdom ‑‑ or somebody else's wisdom I suppose if they want to buy somebody ‑‑ we find out there is another million dollars, we know it is being paid the seven years, we can easily adapt for new changes.

8613             But really we do not have another source of money and so we really can't say to the public, "Oh yes, we probably will have money", so we have to budget accordingly.

8614             COMMISSIONER ARPIN:  When in 1988 the CRTC allowed the creation of the Starmaker fund it was based on an assumption ‑‑ and the CAB created the Starmaker on the assumption that it will have a life of about seven to nine years.  I can see from your graph that what you are showing here is that you will have had a real life of about 10 years.  Well, you are showing 12, but in year 1 and year 12 you don't have any significant impact, particularly in the year 12.

8615             Wasn't the goal attained?

8616             MR. SUTHERLAND:  I think the goal was attained.  That's an excellent point.

8617             I think I said this earlier, this fund was brought about because of a specific circumstance in the marketplace that radio thought this would be effective.  They gave us a few principles and some money and we turned it into the fund and it worked for what it was supposed to do.

8618             COMMISSIONER ARPIN:  So why expand the lifespan of the fund?

8619             MR. SUTHERLAND:  We are not.  We are not expanding the lifespan of the fund.  This is the fund is what it is for today.

8620             COMMISSIONER ARPIN:  No, no.  I think the question should have been asked to the CAB and they could address it on June 12th.

8621             There are CAB representatives in the room.

‑‑‑ Laughter / Rires

8622             MR. SUTHERLAND:  I think what Chuck is saying is that we are all set up, we have the website, we have the administration.  The concept of artists entering seems to be working well and if there is more work to be done we are happy to take it on, but at present we are happy that we have done exactly what I feel we were asked to do.

8623             COMMISSIONER ARPIN:  And with success.  I think your annual report shows that the money has allowed Canadian artists to further develop and to become known at the international level.

8624             MR. GHOMESHI:  I would say that we continue to be effective and that we are, as you say, living in the real world in terms of the mandate that has been dealt to us, but that we continue to be effective and make a difference in the lives and careers of artists and were that to continue I would consider that a good thing.

8625             COMMISSIONER ARPIN:  With the previous intervenor we discussed the possibility of double dipping problems between FACTOR and Starmaker.  I know that Ms Ostertag said that you had put in place some mechanisms which, from her own end, is a paper burden.

8626             Do you have any comments?

8627             MR. McCOY:  Yes, Commissioner Arpin.  Obviously this is something that we are as concerned about as the people from FACTOR are.

8628             We have had many conversations with FACTOR and Rachel has been to the FACTOR office and we have looked and we examine all of the funding, and I am going to just ask Chip to give you maybe a bit of a rundown in terms of what the results were, because we did a fairly exhaustive examination of that possibility.

8629             MR. SUTHERLAND:  Well, there are two things.

8630             When we built the fund we built it around FACTOR of course, because FACTOR had been around for 20 years when we started and we were well aware of the good work that FACTOR was doing so we weren't going to stumble all over what they were doing.

8631             They are obviously putting a lot of money into creating product, records and videos.  We don't do that.  So right away a huge chunk of their funding and none of ours is directed in an area where we don't go.

8632             They don't fund any major label artists.  Well, they do in some small segments of their program but they don't have that and we do.  Twenty percent of our money goes there, so 20 percent of our money generally is fine.  So it was designed to get around that.

8633             Now, where we had a problem or a perceived problem was we had independent, the bigger independent companies who are making lots of investments and artists and they have successful artists so they are applying to both because they don't know whether they are going to get money from one or the other, so we have made it clear that they have to disclose if they are applying for FACTOR, then we exchange all of this information.

8634             In the first round of funding we might have had three because nobody knew the rules.  We caught all of them.  I think the five years ‑‑ Rachel, you can correct me ‑‑ I think we have had seven instances of double dipping.

8635             I think we have caught all of them.  I  think maybe four of them were from one company because they didn't understand a rule on how the invoices could be submitted, and therefore out of the whole fund I think maybe it was $30,000 total that we had overlap.

8636             Do you want to just take that?

8637             MS OLDFIELD:  Yes, I think probably today there have been 250 fully reconciled files, and I think the instances are less than ten.  And as Chip has alluded to, it was one individual larger indie company who was responsible for ‑‑ I think it was six of those double‑dipping instances.

8638             We do have a mechanism in place where I am in contact with FACTOR and they are in contact with me.  I send every single Radio Starmaker Fund fully reconciled independent label account statement to FACTOR, and they have it on file.

8639             That is every single one, whether they indicated they applied to FACTOR or not.

8640             COMMISSIONER ARPIN:  On another area, one of the record companies, Fading Ways, just to name them, is saying that no CTD funds should be given via FACTOR or Starmaker, or any other similar programs, for project artists who no longer control their intellectual property or that the company is not 100 percent Canadian owned.

8641             Do you have any views on that?

8642             MR. McCOY:  Well, again, we are not a centered fund.  Our funding is based on the artist.  We are here to develop Canadian talent and the artist is at the centre of it.

8643             We don't believe ‑‑ and this is how we operate the Radio Starmaker Fund ‑‑ that the funding should be dependent on the business arrangement that the artist has made.

8644             We have particular guidelines in terms of we predominantly fund independent artists but it is not our role to play in determining what business deal an artist makes.

8645             If they are Canadian, they are Canadian.  And if they meet the other criteria, then we will review them for funding.

8646             I'm not sure, Andy or Jian, perhaps you have a comment to make on that.

8647             MR. McLEAN:  Yes.  I just wanted to say that in about three weeks about 450 new bands will be coming to Toronto to play at the festival that I and my partners organize.  This is our 12th year of running it.

8648             The theme this year is "DIY", Do It Yourself.  Now, a lot of artists are really making their own business decisions to be an independently run artist business in the same way as you would start any other little business; in fact, a very viable way for artists to try and make a living.

8649             The traditional model is either starving artist or superstar.  I think it is much better to see it in terms of trying to create a middle ground where the new Canadian artists are self‑supporting; that they are taking control of their own business and they can access funds and manage it in a way that any other small start‑up business would be perceived.

8650             So that is the kind of information that we are giving to artists who are developing and just encouraging them to run it.  Even though it is the music business, it just like any other independent business.  And it should really be run under the same kind of guidelines.

8651             If you have a good product, which is great songs you can play, then you will reach your market at some point.

8652             And you should certainly keep control of owning this intellectual property.  As Jian says, you can record in a basement.  There is no real reason not to hang on to the masters of your recording.

8653             Traditionally in this business the sad thing is that many artists will never own the songs that they have created.  They are owned by labels.

8654             COMMISSIONER ARPIN:  Thank you very much, Mr. Chair.  Those are my questions.

8655             MR. SUTHERLAND:  If I can just add for a second, because the quote you gave was effective ‑‑ giving up control of their masters and Andy was talking about ownership.

8656             The effective control sounds like an easy test, but it is not really an easy test.  If the ‑‑

8657             THE CHAIRPERSON:  Tell us about it.

‑‑‑ Laughter / Rires

8658             MR. SUTHERLAND:  Well, the idea that the artist makes the record and then decides who is going to help me in my whole economy, not just the record business.  Of course it is important, but it is only one part of the music business.  Right?

8659             The music business is touring and merchandising and song writing.  For an artist, there is a whole economy out there and we are focused on improving all of that.

8660             The effective control isssue is well, you make your record and whether you choose on a business deal, because of the investment levels, to give up ownership or you don't, we have faith that the artist makes good decisions about their own business decisions and why would we tell them how to structure their business.

8661             We don't judge them by their business structure.  We judge them by being a Canadian artist.

8662             THE CHAIRPERSON:  Thank you very much.

8663             Madam Secretary, the next item, please.

8664             THE SECRETARY:  Thank you, Mr. Chair.

8665             We would now invite the next participant, ANR Lounge, Ms Anna Maria Russo, if she could come forward for her presentation.

‑‑‑ Pause

PRESENTATION / PRÉSENTATION

8666             MS RUSSO:  Sorry, it's just booting up right now.

8667             THE CHAIRPERSON:  Are you using dial‑up?

8668             MS RUSSO:  Sorry, Dell computers.

‑‑‑ Pause

8669             THE CHAIRPERSON:  Is your entire presentation video?

8670             MS RUSSO:  Pardon me?

8671             THE CHAIRPERSON:  Is your entire presentation video?

8672             MS RUSSO:  It's going to exemplify everything that I mention.

8673             I am just going to introduce myself while I fold this over so that you can see it.

8674             THE CHAIRPERSON:  All right.

8675             MS RUSSO:  Good morning.  Sorry about the wait.

8676             My name is Anna Maria Russo.  I am the manager of the ANR Lounge website.

8677             Here with me today, and running the AV, is Sam Baardman, Executive Director of the Manitoba Audio Recording Industry Association, also known as MARIA.

8678             MARIA is one of the 15 music industry associations in the ANR Lounge.  We would like to thank the CRTC for allowing us the opportunity to speak about the ANR Lounge as a vital internet tool for the Canadian music industry, and more specifically for emerging artists.

8679             I will be conducting a visual presentation to better describe our services.  By employing real‑life scenarios artists commonly encounter, I will show you how the ANR Lounge helps get their music out there and be heard.

8680             Before I start, I wish to clarify that we are here as a non‑partisan, independent group committed to developing talent in this country.

8681             We also want to show how ANR Lounge is a perfect example of how Canadian Talent Development funds are efficiently used to help create the stars of tomorrow.

8682             The discovery and development of emerging artists is vital as they are among Canada's most valued cultural resources.  The ANR Lounge recognizes the need to nurture this resource because without new music there would be nothing to fuel the Canadian music industry.

8683             Through the website, located at www.anrlounge.com, up‑and‑coming artists like Luke Doucet, The Perms, Damhnait Doyle, BrassMunk and Doc Walker are able to promote their music to radio stations across Canada for free.

8684             But that is not all we do.

8685             We provide targeted information to help artists acquire the knowledge and help they need to develop their craft.

8686             As the saying goes, no person is an island and this is true for any artist trying to make it in the music business, particularly with the culture of connectedness the internet affords.  Artists need the infrastructure provided by managers, record labels, promoters, etc., to help get their career to the next level.

8687             Therefore, in addition to our radio promotion service, we provide what is arguably the most comprehensive database of information containing Canadian sources that will help artists build the necessary network in order to get their music heard.

8688             I will now ask you to pay attention to the screens in front of you as I will demonstrate our claims.

8689             Let us take, for example, a new rock group that has just finished a release and are looking for ways to promote it.  Naturally, the first question that is asked by artists is how can they get their music played on the radio.

8690             Through their free ANR Lounge account the rock group has access to the Music and New Releases section.  In this section artist members can create a profile that includes their biography, sound clips, and album artwork among other information, which resembles an electronic press kit.

8691             When completed and reviewed by one of our 13 regional administrators across the country, their profile is posted in the Music and New Releases section.

8692             Each week we send out a notice to over 600 radio stations, which includes commercial, campus and community, setting out what new releases have just been uploaded.  This gives artists an incredible advantage because they are saving thousands of dollars because there is no need to pay out the money it would take to mail out packages, nor does it cost them any money to upload the release to our website.

8693             Therefore, without having to spend a dime, they increase their chances of being heard by key radio station personnel and being considered for airplay.

8694             Since the launch of this service, artists listed on the ANR Lounge have appeared over 300 times on campus radio charts and added 515 times to commercial radio.  Currently a radio station can access 1,300 releases containing over 10,000 songs found in the Music and New Releases section.

8695             Other ways to augment the promotion of a release is by sending a press release out to major media, hiring a radio promoter or planning a tour of live performances.

8696             The Listings section of the website can help the group initiate any of these activities by providing them with up‑to‑date contacts in the music industry.  In our searchable database of 16,000 contacts we provide contact information for 1,275 media outlets, including print, television and radio; 115 publicists; and over 1,400 venues across the country.

8697             These listings can be narrowed down by genre, province, city and sub‑categories.  For example, you can limit your venue search to a range of different sizes from coffee houses to stadiums.

8698             If I may digress for a moment, going back to the idea mentioned earlier about building a support network, the listings also provide contact information for 418 management companies, 325 record labels and 219 promoters.  Artists can peruse their search results to target who they want to contact to potentially build a working relationship.

8699             As you can see, the listings provide one‑stop targeted searching in over 40 different music‑related categories in Canada.

8700             As with the Music and New Release section, the listings save time spent on searching for the right contacts and again help bring their music closer to the masses.

8701             Networking is a very important part of being in the music industry and on many occasions it can be equally as beneficial to know and to have the right contacts as it is to have a good release.

8702             Our listings provide key music industry contacts.  However, our events calendar will indicate where the key contacts will most likely convene.  The events calendar lists conferences, award shows, educational seminars and trade shows.

8703             Revisiting our rock group looking to promote their release, if they decide to plan a tour and book some dates, they can list their tour dates here.

8704             Let us take a few steps back, before our imaginary rock group went into the studio with a fist‑full of songs to record.  The principal question in the mind of the artist is:  How are we going to pay for this?

8705             Fortunately, there are over 200 funding programs in Canada that provide grants to finance artists' endeavours, such as a recording project.

8706             The ANR Lounge's Funding MatchMaker helps organize the overwhelming number of programs by employing an interactive filter process to narrow down the list to a select few that are relevant to the needs of the artist.

8707             Many members have benefited from this service, including Troy Neilson of New Brunswick, who successfully received $5,000 in grants from the New Brunswick sound initiative, and Arnold van Labalgen of Saskatchewan who received funds through a touring grant.

8708             Through these four services I outlined today, the ANR Lounge provides a broad range of functionalities suited to increase business opportunities for artists.

8709             The tangible benefits to the industry are profound, as demonstrated by the latest web traffic statistics.  To date, the website receives an average of 387,000 hits per month, which amounts to 30,000 unique users during the same period.

8710             While the majority of our visitors come from Canada, 43 percent of our users come from outside the country, many from the United States, Europe and Australia.  This proves that by using this service, our artists have the potential to reach beyond the borders of our country.

8711             The ANR Lounge did not achieve success on its own.  The creation of the website forged an unprecedented collaboration among 15 music industry associations, including all provincial and regional associations and four national ones.  They are now linked in a unique way, working closer together ‑‑ perhaps in a way that has never been done before in Canada's music history.

8712             The initiative allowed the opportunity for the associations to exchange policies and ideas.  I would even go ahead and say that the ANR Lounge is partly responsible for the formation of the Coalition of Nine Provincial/Territorial Music Industry Associations that will be speaking to you later today.

8713             This proves that working together is a more powerful way to a common goal: to build the Canadian music industry and sustain its economic and cultural health.

8714             The music industry would lose a valuable resource if the ANR Lounge were discontinued due to lack of funding.  Currently the ANR Lounge is financially supported by the Foundation Assisting Canadian Talent on Recordings ‑‑ also known as FACTOR ‑‑ exclusively through the Radio Marketing Fund.

8715             We express our gratitude to the broadcasters and FACTOR for the opportunity to create the ANR Lounge.  The initiative has entered the last year of a five‑year funding commitment with no guarantee of renewal.  Many individuals and companies have benefited from the resources provided by this important database and many more stand to benefit in the future.

8716             The ANR Lounge provides valuable services at no cost to its users because of the generosity of the Canadian broadcasters and their commitment to developing talent in this country.

8717             Once again, the ANR Lounge is a perfect example of how Canadian Talent Development funds are officially used to help create the stars of tomorrow.

8718             The ANR Lounge would be able to further contribute to developing Canadian talent if we secure long‑term sustained funding for this project.  Sustained funding could be attained by renewing support through FACTOR or securing monies directly from the Canadian Talent Development Fund.

8719             We thank you for your time and we welcome your questions.

8720             THE CHAIRPERSON:  Thank you.

8721             Commissioner Pennefather.

8722             COMMISSIONER PENNEFATHER:  Thank you, Mr. Chairman.

8723             Thank you for the demo.  I did go to the site but this allowed me to go a little further in because I could only get to the first front pages where we talked about the collaboration amongst the music associations.

8724             So perhaps later we will talk to Maria about that.

8725             MS RUSSO:  Sure.

8726             COMMISSIONER PENNEFATHER:  Just one quick question.

8727             When you mention the 30,000 unique users and the hits, who are the users?  Is it the artists?  Is it the companies?  Is it the broadcaster?

8728             MS RUSSO:  It's a combination of all three.

8729             COMMISSIONER PENNEFATHER:  Do you have some follow‑up, some way to evaluate that?

8730             MS RUSSO:  Well, I can give you an example of what happened two days ago.

8731             We actually are constantly improving the website to fulfil the needs of our users.  Of course, one of our users are radio station personnel.

8732             So what we have done is we streamlined the way the notification works for radio.  So we sent out a notice about that and within the hour, within one hour, 40 radio stations had already gone and revamped their accounts.  So that is one example.

8733             Also with artists, artists are constantly going up on the website.  I think they would ‑‑ the spike would be for broadcasters because every Wednesday they get the notification for new releases.

8734             So the spike would be mostly broadcasters on Wednesday, music industry on Tuesday as we post our news every Tuesday called the WhistleBlower, and then I guess a general spraying of artists coming in at anytime of the day every day.

8735             COMMISSIONER PENNEFATHER:  You say you send a notice to over 600 radio stations, commercial, campus and community.

8736             MS ROUSSEAU:  Mm‑hmm.

8737             COMMISSIONER PENNEFATHER:  What about the CBC?

8738             MS ROUSSEAU:  Yes, CBC is included.

8739             COMMISSIONER PENNEFATHER:  Okay.

8740             MS ROUSSEAU:  I am sorry.

8741             COMMISSIONER PENNEFATHER:  Thank you.

8742             Thank you, Mr. Chairman.

8743             THE CHAIRPERSON:  Thank you very much.

8744             We will break now and resume in 15 minutes.  Nous reprendrons dans 15 minutes, at 10:55.

‑‑‑ Upon recessing at 1040 / Suspension à 1040

‑‑‑ Upon resuming at 1101 / Reprise à 1101

8745             LA SECRÉTAIRE:  Monsieur le président, I will introduce the next participant, the Canadian Satellite Radio and Mr. Steven Tapp will introduce his colleague, after which you will have ten minutes for your presentation.

8746             Thank you.

PRESENTATION / PRÉSENTATION

8747             MR. TAPP:  Thank you very much.  Good morning, Mr. Chairman, members of the Commission, Commission staff.

8748             I'm Steven Tapp and I'm the President and Chief Operating Officer of Canadian Satellite Radio, licensee of Satellite Subscription Radio Service XM Canada.

8749             First and foremost, I want to tell you what an honour it is to be here today and to thank the Commission for giving us the opportunity through this licence to provide our service to the Canadian public.

8750             We think this is a great decision for Canadian Consumers and a wonderful decision for Canadian artists and we're very proud to be here today.

8751             With me here today on my left is Stewart Lyons, the longest standing member of the XM CSR team.  I think is going on like five years now, right Stewart?  Stewart Lyons is our Executive Vice President.

8752             Beside Stewart is André DiCesare who is our Directeur, responsable de la programmation francophone.  And beside André is Daren Kirkwood who is our in‑house Legal Counsel.

8753             On my right we have Ross Davies who is our Vice President of programming, no stranger to the Commission and the radio industry here in Canada.

8754             Beside Ross is Cam Carpenter, the hardest working man in showbiz, the guy who is responsible for all of our Canadian talent development, Cam Carpenter.  And that is our small team here today, as I've said, we're very happy.

8755             As the Commission is aware, we were licensed about 12 months ago to operate one of Canada's two competitive satellite radio services and that decision back on June 16, 2005 flowed from an extremely thorough competitive licensing hearing which obviously took place in this hearing room back in November of 2004.

8756             At that hearing the Commission had an opportunity to review with the applicants and with many of the same parties who are participating in this review this week, a broad range of policy issues that relate specifically to the role of subscription satellite radio services in the Canadian broadcasting system.

8757             Our XM Canada service, the first of its kind launched in Canada ‑‑ we were the number one to the launch pad ‑‑ went on the air on November 22nd 2005, signing up our first subscriber and allowing XM Canada to provide one of the hottest‑selling holiday gifts for last year's holiday gift giving season, the most important selling season for satellite radio.

8758             We have now been broadcasting in Canada for nearly six months, it's about 170 days so far, we have already implemented one set of significant amendments to our conditions of licence.  And the last half year has been both challenging and very exciting for us at XM Canada.  It is a very competitive business and we're happy Canadians have choice in their satellite radio services.

8759             As we anticipated, XM Canada launched its service into a Canadian market that had a considerable pent‑up consumer demand already for a non‑grey market, legitimate, Canadian‑owned, Canadian‑delivered satellite subscription radio service.

8760             Also as we expected, we have been face with very strong competition in the market place from our competitor, SIRIUS Canada ‑‑ I think that's good for Canadian Consumers ‑‑ but we are proud to report that XM Canada has made great progress to date, both in programming and marketing our service.

8761             We've put in place an ambitious Canadian talent development program, one that focuses on initiatives to support both anglophone and francophone new and emerging Canadian artists.  We are convinced that our XM Canada service is and will be a great success and will make very significant contributions to strengthening the Canadian Broadcasting system and we're proud to be part of that community.

8762             Through our appearance this morning we would like to provide the Commission with a status report on the satellite radio industry in Canada and to outline what we have done in particular to showcase on a North American delivery platform, the new and emerging Canadian music and comedic talent.  We would also like to review some of our major Canadian talent development initiatives to date.

8763             Although for competitive reasons as a public company I am not able to provide the Commission today with precise subscriber numbers to date, we are obviously obliged to report on a quarterly basis as a publicly traded company.

8764             I can confirm that we are ahead of our projected sub‑numbers that were contained in the business plan that we filed with our licence application.

8765             We are currently programming ten Canadian‑produced channels out of Montreal and Toronto and we provide XM Canada subscribers with a choice of up to 100 diverse radio programming channels, spanning a wide range of choice in news, entertainment, sports and, of course, music.

8766             We have implemented all of our conditions of licence, including those contained in broadcasting decision CRTC 2006‑37 of the 10th of February 2006.

8767             CSR's English and French music channels play virtually 100 per cent Canadian content music, a very high proportion of that music is new Canadian artists.  We are extremely proud of the fact that XM Canada has, as we promised at the 2004 licence hearing, provided access for new and emerging Canadian performing artists, both anglophone and francophone.  And we are broadcasting their unique talents over six million listeners throughout the XM platform across North America.

8768             Young Canadian bands such as Geneviève Bilodeau, Jets Overhead, The Most Serene Republic, they're all examples of new and emerging Canadian artists who receive airplay not only on XM Canada‑produced channels such as The Verge and Air Music, but also on U.S. based XM music channels such as XMU, The loft, XM Café, just to name a few.

8769             Mr. Chairman, I'd like the Commission to hear from those directly responsible for making this magic come to life, our program executives and talent development ambassadors.  I would like to ask Ross Davies, André and Cam to briefly outline for you some of the notable programming success that XM Canada has experienced to date.

8770             MR. DAVIES:  Thank you Steve.  Mr. Chairman, members of the Commission, Steve has already identified a few of the new young Canadian bands that are receiving airplay and North American exposure on both U.S. and Canadian XM music programming channels.

8771             I could add to that list the names of emerging Canadian musical artists such as Jason Collett, Luke Doucet, Octoberman, Quinzy, Elliott Brood, Small Sins, Hey Rosetta!, Moufette and on and on.

8772             As well, more established Canadian musical artists such as Ron Sexsmith, Bruce Cockburn, Blue Rodeo, The Tragically Hip are all receiving regular airplay and exposure in the United States and Canada on XM's other commercial‑free music channels.

8773             A good part of our success in ensuring that Canadian musical artists get airplay on the various U.S. program XM channels is a result of our Canadian Music Ambassador program which is headed by Cameron Carpenter and Cam will speak with you about that in a moment.

8774             But our XM Canada satellite radio service is not all about music.  We also program from our XM Canada studios in Toronto and in conjunction with Mark Breson of Yuk‑Yuks an English language comedy channel called "Laugh Attack".  That channel, not surprisingly has proven to be very popular with XM radio listeners in the U.S.A. as well as in Canada.

8775             In addition, we provide our subscribers, including the large number of XM Canada subscribers who are snowbirds with both English and French language 24/7 Canadian news and cultural information channels.

8776             I would ask now my colleague André to outline what XM Canada has done since launch in respect of our French language program.

8777             MR. DiCESARE:  Thank you, Ross.

8778             Monsieur le président, mesdames, messieurs; dès le début du projet de l'implantation de la radio satellite XM au Canada j'avais personnellement un objectif bien précis en n'impliquant dans cette aventure.

8779             C'était d'obtenir le meilleur positionnement possible pour les artistes francophones du Canada dans cette nouvelle technologie.  Je souhaitais entendre la musique francophone d'ici partout en Amérique.  Je croyais fermement qu'on ne pouvait pas se permettre de manque notre rendez‑vous avec cette technologie de communication de l'an 2000.

8780             À titre de responsable du développement des stations francophones canadiennes, je souhaitais que nos deux chaînes musicales, Air Musique et Sur la Route aient un contenu francophone à 100 pour cent.

8781             De plus, je tenais à ce que nous fassions entendre partout en Amérique la musique de nos artistes établis, mais également celle du plus grand nombre d'artistes émergents que l'on entend pas sur les ondes des radios traditionnelles.  Après six mois d'opérations, je suis fier d'annoncer : mission accomplie.

8782             Déjà, nous avons fait plus de 50 portraits radio d'artistes de la relève et d'artistes plus connus.  Nous avons le plaisir également de présenter des performances exclusives et des entrevues que nous enregistrons et diffusons sur nos ondes.

8783             À ce jour, nous avons reçu dans nos studios Catherine Durand, Christian Legault, Jamil, Geneviève Bilodeau, Gilles Valiquette, Jim Corcoran, Véronique Dicaire, Dan Bigras, Edgar Bori, Patrick Normand, Karin Clerc, Zone Urbaine, Senaya, Chris Stills et Camaro et d'autres.

8784             Par ailleurs,  nous avons des discussions constantes avec les associations professionnelles de l'industrie musicale pour développer des collaborations qui profiteront aux artistes d'ici.

8785             Par exemple; nous étions en avril aux rencontres de l'ADISQ.  Nous sommes partenaires des MINI, Montreal Independent Music Initiatives, que nous avons enregistré hier leur premier concert qui seront en ondes dans quelques semaines chez nous et nous seront également présents au Festival de Jazz à Montréal.

8786             Enfin, nous avons eu le grand plaisir de distribuer nos premières bourses de 50 000,00 $ chacune à deux artistes pour les soutenir dans leur conquête du marché européen.  L'annonce publique de notre soutien financier dans les carrières de Steffy Shock et du Groupe Les Trois Accords nous a permis d'avoir un impact considérable auprès du milieu artistique.

8787             Suite à cette annonce, nombreux sont ceux et celles qui ont voulu en savoir plus sur la radio satellite XM, son implication dans l'industrie musicale canadienne et ses engagements futurs pour contribuer financièrement à son essor.

8788             Nos chaînes de radio ont à peine six mois d'existence et déjà nous avons acquis une solide et bonne réputation dans le milieu de l'industrie musicale canadienne et nous en sommes fiers.

8789             Je vais passer la parole à Cam.

8790             MR. CARPENTER:  Thank you, André.  Thank you.  It's nice to be here today.  Since the day XM launched last November we have made a point of reaching out to the Canadian music industry to lend our support to a number of music events across the country.

8791             XM Canada has worked with and provided financial support to the East Coast Music Awards, New Music West, Canadian Music Week and Juno Fest. and Halifax on Parade, as part of this year's Junos.

8792             At this year's Junos, in conjunction with Halifax on Parade we produced a free concert for 16,000 people featuring local Maritime acts such as Jimmy Rankin, Bat Mays, Julia Plasket, Garrett Masson and The Trues.

8793             We are continually looking for new emerging Canadian talent and we are pleased to tell you that so far we have programmed dozens of previously unclaimed Canadian bands.  These artists were not being played on conventional radio, but have found a home on XM.  Brand new artists such as the Museum Pieces from Halifax and 16 million metres from Vancouver have contacted us directly stating that they have been receiving CD artists from across North America due to their play on The Verge, our English music Canadian station.

8794             Many bands have also commented and how many comments and friends' requests they have been receiving on my space because of their exposure on The Verge.

8795             An example of what we can do would be a band called Murder City Sparrows who are from Edmonton.  I met them recently at Canadian Music Week in the lobby of the hotel, they played me their video and gave me their independent CD.  I gave it to our program director at The Verge, and he immediately liked it and added it to the air.

8796             We sponsored new music class this year in Vancouver and the Murder City Sparrows were voted next big thing at that conference.  We interviewed the band while we were there and then, we have since done a special on our station from New Music West highlighting the independent bands.

8797             They will now be coming to Toronto for North by North East in the next couple weeks and we'll have them in our Toronto studios to record live there.  Hopefully, the next step will be to prove to the American stations the success that the bands had on our station and get them added on their play list as well.

8798             We have been recording bands for the last ten weeks and have done 40 already at our studios in Toronto and Montreal as well as we have arranged recordings in our Washington offices for such bands as Stars and New Pornographers and Blue Rodeo as they tour across America.

8799             It's these rare exclusive performances that we will turn through our U.S. stations.  Also for airplay we had a band in this week's Small Sins who recorded in our studio that XMU will also be programming on their schedule in the States.

8800             Ron Sexsmith and Jason Collett recently gave two remarkable enthusiastic performances are regularly heard on The Loft, one of our popular U.S. channels.

8801             This is just a few examples of how we are spreading the word about Canadian music across North America.

8802             MR. TAPP:  Mr. Chairman and members of the Commission, that completes our brief progress report of XM Canada on the status of our business and we would be pleased to respond to any questions that you have.  Thank you.

8803             THE CHAIRPERSON:  Thank you very much.  We appreciate this update.  I just have a few questions.

8804             Mr. Carpenter, I don't know whether you were here for the AVR presentation around 3:00 A.M. last night, I think it was?

Laughter / Rires

8805             MR. CARPENTER:  No, sir.

8806             THE CHAIRPERSON:  You weren't.  Well, I guess you mentioned that you are still offering performances and promoting groups.  Do you promote any aboriginal groups in that context?

8807             MR. TAPP:  We haven't as of yet.

8808             THE CHAIRPERSON:  You haven't.  Have you got any plans to carry aboriginal music as an example of spreading the word about Canadian music across North America?

8809             MR. DAVIES:  Mr. Chair, if I may, our plans for that studio are to cover all genres of music.  We are now as Stewart said, I think 170 days into this.  We have been primarily bringing bands in that are comparable to our channel specific right now, The Verge, that Cam mentioned.

8810             However, I think it was just yesterday, we had Haydn Neil in there who... from Jacksoul who has recorded I think five songs.  He probably ‑‑ well, he won't get played on The Verge channel per se, but we are going to take that record and get it ‑‑ that recording and send it down to the studio down in Washington.

8811             And so that is aboriginal will absolutely be part of that and we are just in the early days just still trying to reach out to the artist community with that in mind.

8812             THE CHAIRPERSON:  Thank you.  I don't know again yesterday whether you heard the National Campus and Community Radio Association presentation alluding to commitments that the satellite applicants had made at the '04 hearings and they didn't name names, but they implied that one of the groups hadn't returned the phone calls and so on.  Have you had dealings with them and have you got anything to report on your relations with Campus and Community Radio Station?

8813             MR. DAVIES:  Mr. Chair, I hope they weren't referring to me because I always make a point of returning my phone calls and e‑mails.  I can tell you, I did not hear the submission by the Campus people last night, but I was made aware of it.

8814             I can tell you that in that particular instance, we have had communication with them and I would like to believe that we are still in communication and they submitted a proposal to XM radio about maybe, I guess maybe a month ago.

8815             Now, it did take me a few days to get back to them, but it basically gave us a proposal for two full‑on channels, one music channel and one spoken word channel and we simply can't afford that band with right now and I informed them of that in the reply and, however, said, you know, we still need to talk about this and see what ways we can, you know, work together on this, but their proposal as they sent to us, wasn't ‑‑ couldn't work at this time.

8816             I can also tell you that we have had communication with CKUA and Mr. Regan, he and I have exchanged e‑mails over the last few months and although we had spent the last couple of months, we haven't been in touch with each other, but I think the ball is in Mr. Regan's court about he was going to have his people submit a three‑hour demo of a proposed CKUA show that we are going to broadcast on the XM platform.  So that conversation is still taking place.

8817             THE CHAIRPERSON:  He also wants you to heavily contribute to a CTD fund, I don't know whether you have any reaction to that.

8818             MR. DAVIES:  I'm going to let Stewart Lyons answer that, Mr. Chairman.

8819             MR. LYONS:  Yes.  In our CTD plan as submitted, we actually have amounts allocated to NCRA.  We haven't had a chance to distribute those amounts yet because they're based on our fiscal year revenues which have not been built up because we have only been in business as Ross pointed out for 170 days, but as we get up there, definitely they have been part of the plan approved by the Commission.  So, they are on our list and we plan to commit to them for sure.

8820             THE CHAIRPERSON:  Thank you.  Those are our questions.  Thank you very much.  Madam Secretary?

8821             LA SECRÉTAIRE:  Merci, monsieur le président.

8822             I would now invite the next participant.

8823             J'inviterais maintenant le prochain participant à l'ordre du jour, monsieur Jean‑Paul Perreault d'Impératif français s'il voudrait se présenter pour sa présentation, s'il vous plaît.

8824             Après que vous nous aurez présenté vos collègues, vous aurez dix minutes pour votre présentation.

PRÉSENTATION / PRESENTATION

8825             M. PERREAULT:  Alors, j'aimerais d'abord vous présenter les personnes qui m'accompagnent.  Madame Armelle Vallée, chargée de projet Impératif Français, madame Claude‑Annick Samson également chargée de projet au sein de notre organisme et monsieur Paul Simard, membre du conseil d'administration.

8826             Écoutez, dans un premier temps, je tiens à remercier le CRTC pour l'invitation qu'il nous a lancée afin de vous faire connaître notre point de vue concernant la radio commerciale et de ce pas, j'emboîte immédiatement.

8827             Nous nous sommes présentés à plus d'une reprise devant le CRTC depuis 1998 et en 2002 nous avons aussi partagé nos réflexions avec le Comité  permanent du Patrimoine canadien.

8828             D'où vient notre intérêt pour la radiodiffusion, c'est que nous sommes d'avis que le développement de la Francophonie en Amérique du Nord, son avancement, son rayonnement dépendent en grande partie des médias visibles accessibles et soucieux de diffuser nos artistes francophones.

8829             Comme vous le savez, plus de la moitié des québécois demeurent dans le sud du Québec, soit en Estrie, dans la région de Montréal et en Outaouais et sont donc bombardés par des médias états‑uniens ou Canadians anglophones à contenus états‑uniens élevés.  On ne parle ici que de la radio et de la télévision classique.

8830             En p lus de la radiodiffusion terrestre traditionnelle à laquelle la majorité des québécois et autres francophones du pays ont accès, il y a la télévision et la radio distribuées sur câble et par satellite qui nous inondent de centaines de choix provenant du continent.

8831             Parlant de radio, seulement à Montréal, outre trois signaux sur bande AM en provenance de Plattsburg, Champlain et Burlington, on peut entendre clairement la radio états‑unienne sur les fréquences FM 92,9, 94,7, 99,9 et 107,9.

8832             Une des stations au format rock hip‑hop, laquelle cible un jeune public de 15 à 25 ans avec un studio à Chateauguay, ville pas très éloignée de l'État de New‑York et émetteur situé dans l'État de New‑York, la station WYUL va même jusqu'à prétendre maintenant être une station de Montreal and Northern New York.

8833             Elle a mis sur pied en mars 2006, vous le savez, un site web complètement bilingue et lorsque je dis *bilingue+, je parle d'un site en anglais et en français conçu expressément pour charger le jeune auditoire québécois.

8834             Je ne suis pas contre le contenu en français du site web, cela va de soi, d'une station de radio états‑unienne, mais il s'agit ici d'une station qui ne fait qu'exporter vers le Québec du matériel non soumis aux objectifs de la Loi canadienne sur la radiodiffusion puisque sa licence lui a été émise par le Federal Communication Commission des États‑Unis.

8835             Sans la radio francophone commerciale, communautaire et publique, nos artistes n'auraient pas accès à leur public.  Sans une radio forte et sans ses artistes, la population francophone aurait accès à quoi?  Au matériel culturel que le reste de l'Amérique du Nord consomme et lui offre gratuitement en grande quantité.

8836             Il est donc essentiel que la radio et la télévision francophone soient bien distribuées par câble et par satellite et qu'elle soit visible et facile d'accès.  Il y a va de la rentabilité de ces médias et du développement de la francophonie sur ce continent.

8837             En ce sens, l'Impératif français se rallie aux objectifs énoncés au paragraphe 8 de l'Avis Public, certaines suggestions du CRTC sont intéressantes.  Par contre, le CRTC aura‑t‑il le courage d'imposer quelques nouvelles règles qui sont conséquentes à la Loi sur la radiodiffusion.

8838             Le premier objectif parle d'une radio commerciale dynamique et bien financée dans les deux langues officielles de la Fédération canadienne est capable de contribuer à la réalisation des objectifs de la politique énoncée dans la Loi.

8839             Les données publiées dans l'Avis d'audiences publiques aux paragraphes 26 et 27 sonnent l'alarme sur la rentabilité des stations de langue française indépendante par rapport à la moyenne canadienne.  Il y a des mesures que le CRTC devrait prendre pour aider la radio de langue française.

8840             Pour assurer la notoriété des stations commerciales de langue française, le CRTC devrait appuyer davantage la distribution des stations de radio de langue française par les entreprises de distribution par satellite.  Voici quelques observations.

8841             Bell ExpressVu ne diffuse pas CKOI, pourtant la station FM la plus importante en terme de cote d'écoute dans le marché de Montréal.

8842             Sur 19 stations de radio publique et commerciale, ExpressVu n'en diffuse que quatre en français dont seulement deux sont des radios commerciales.

8843             Aucune entreprise de distribution par satellite n'offre une gamme de stations de radios commerciales de langue française en provenance de l'extérieur de Montréal.  Depuis 1998 Star Choice diffuse des stations de radio de SpokeCan et Seattle, État de Washington dans le renouvellement de licence, décision de radiodiffusion CRTC 2004‑84.

8844             Le CRTC renouvelle la licence de Star Choice avec les stations FM suivantes dont la liste... et là, je ne vous passerai pas la liste, il s'agit de stations en provenance des États‑Unis.

8845             Le CRTC a accepté ce renouvellement de licence par cette entreprise de distribution par satellite qui ne trouve de la place que pour seulement sept stations de langue française dont uniquement cinq stations commerciales sur un total de 65.

8846             Les chiffres mêmes du CRTC indiquent qu'une rentabilité plus solide des stations de radio appartenant à des groupes de propriétés.  Il aurait donc été logique pour le CRTC d'accepter des demandes de licence de propriétés de groupes, par exemple, lors de l'attribution de licence en 2005 pour le marché de Gatineau et Ottawa.

8847             Impératif Français ne comprend donc pas le refus du CRTC énoncé dans sa décision de radiodiffusion 2005‑257 à Corus Entertainment pour une station de radio commerciale.  Il y avait pourtant de la place pour au moins une autre station de langue française dans la région.

8848             Il faut se rappeler qu'en 2001 aussi sur quatre nouvelles stations, il n'y avait qu'une seule nouvelle station de langue française.  Le déséquilibre s'est élargi en quelques années, ce qui a encouragé le glissement de l'auditoire vers les stations anglophones.

8849             Il est question de transfert d'auditoire vers les stations de radio anglaise dans le mémoire du Ministère de la culture et des communications du Québec, paragraphes 19 à 25.  Ces transferts sont dus en grande partie au manque de choix radiophonique en français.  Une meilleure gamme de services radiophoniques en français réduirait l'effet de transfert de l'auditoire francophone vers les stations anglophones.

8850             Impératif français fait état de la situation dans les régions de Gatineau et Ottawa dans un article qui a été publié en 2005 dans les principaux médias.

8851             Impératif français a d'ailleurs dénoncé la proportion trop peu élevée de nouvelles licences de radiodiffusion en Outaouais.  Le deuxième objectif cible porte sur la promotion des artistes canadiens et québécois.

8852             Je peux vous assurer que non seulement Impératif Français appuie l'exigence de 65 pour cent de contenu vocal francophone de catégorie 2 formulé par le CRTC pour favoriser le rayonnement de la langue et de la culture d'expression française, mais il souhaite que ce seuil soit porté à 75 pour cent.  L'exigence d'au moins 55 pour cent de pièces vocales de langue française du lundi au vendredi et durant les heures de grande écoute est une politique louable.

Ce minimum devrait être haussé à 60 pour cent devrait être haussé à 60 pour cent et devrait aussi s'appliquer aux heures de grande écoute pendant les week‑ends.

8853             Le CRTC doit s'assurer qu'il s'est doté des outils de surveillance du contenu canadien et de langue française pour s'assurer qu'il n'y a pas de délit.

8854             Alors que les stations de radios de langue française sont soumises à une double obligation en matière de musique vocale, soit le contenu canadien et le contenu francophone minimal, les stations de langue anglaise ne sont tenues qu'au contenu canadien.

8855             Alors que le premier objectif de la politique de 1998 vise une programmation canadienne et qu'une autre porte sur la dualité linguistique, le fardeau de ses obligations devrait être mieux partagé, sinon il est trop facile pour un radiodiffuseur anglophone d'implanter une station de langue anglaise où que l'on soit au Québec.

8856             D'aucuns essaieront.  Par exemple, le 20 mars dernier Standard Radio se présentait devant le CRTC à Québec pour y exposer un projet de radio commerciale de langue anglaise de musique rock.

8857             Pourtant, selon le recensement de 2001, la région métropolitaine de recensement de Québec compte 9 845 personnes dont la langue maternelle est l'anglais, sur ses 673 100 habitants, soit 1,46.  C'est évident dans ce cas‑ci que c'est le jeune auditoire francophone que cette station vise.

8858             Globalement, Impératif Français suggère que le CRTC exige des stations à contenu musical élevé de langue anglaise au Canada, que celles‑ci fassent leur part pour la diffusion de musique vocale de langue française et ainsi contribuer à l'atteinte des objectifs de la Loi.

8859             En outre, entre autres, Impératif français suggère que les stations de musique de langue anglaise diffusent au moins 10 pour cent de leur musique vocale d'artistes francophones dont au moins les trois quarts d'artistes francophones canadiens et québécois et ce, sept jours sur sept et autant aux heures de grande écoute de 6 h 00 à 18 h 00 que durant les heures de moins grande écoute.

8860             Impératif Français suggère que le CRTC exige des stations à contenu musical élevé de langue anglaise opérant au Québec que celles‑ci diffusent au moins 20 pour cent de leur musique vocale d'artistes francophones dont au moins 80 pour cent d'artistes canadiens et québécois et ce, sept jours sur sept autant durant les heures de grande écoute, 6 h 00 à 18 h 00 que durant les heures de moins grande écoute.

8861             Impératif Français suggère que dans le cas des studios de stations anglophones situées près du territoire québécois et dont le périmètre de rayonnement est situé en grande partie en sol québécois ou dont l'antenne émettrice est située au Québec, par exemple, les stations radiophoniques FM d'Ottawa diffusant ici à partir de Camp Fortune, que le contenu musical exigé de langue française se situe au même niveau que dans le cas des stations anglophones du Québec.

8862             La règle voulant que les pièces musicales de langue française soient diffusées intégralement doit être maintenu.  Tournons‑nous vers l'objectif portant sur la variété plus large de genres musicaux et d'enregistrement d'artistes canadiens.

8863             D'après les études du CRTC de 1997 et de 2005 sur les artistes dits de la relève, il est évident que les stations de radios commerciales de langue française font quelques efforts pour encourager les artistes de la relève, les nouveaux talents, du moins, si on les compare aux stations anglophones.

8864             Impératif Français se réjouit du progrès observé en 2005, 16,4 pour cent pour les stations de langue française et suggère qu'un seuil minimal, il est bien minimal de 15 pour cent soit maintenant exigé.

8865             Lors de l'attribution d'une...

8866             LA SECRÉTAIRE:  Excusez‑moi, monsieur Perreault.  Votre temps s'est écoulé.  J'aimerais peut‑être vous demander de conclure vos remarques, s'il vous plaît.

8867             M. PERREAULT:  Oui, alors, merci, je vais aller immédiatement aux recommandations.

8868             Alors, à la lumière de notre présentation et du document que vous avez en main, le CRTC doit agir... doit par contre agir en conséquence de ses propres objectifs et devrait notamment imposer la distribution des stations radios commerciales francophones par satellite.

8869             Encourager les artistes canadiens en exigeant des stations anglophones du Canada et des stations anglophones du Québec des seuils minimaux de diffusion de musique vocale francophone d'artistes canadiens et québécois.

8870             Encourager les artistes canadiens francophones en augmentant les minimums requis de contenu vocal de langue française diffusé par les stations de langue française.

8871             Encourager l'émergence de nouveaux talents en imposant un seuil minimal, encourager la programmation locale et canadienne, aider financièrement certaines stations, surtout les stations indépendantes qui doivent investir dans le passage à la technologie numérique.

8872             C'est avec plaisir que nous répondrons à vos questions.

8873             LE PRÉSIDENT:  Merci.  Madame la conseillère Noël.

8874             CONSEILLÈRE NOËL:  Bonjour mesdames, messieurs, monsieur Perreault.

8875             Monsieur Perreault, d'abord une question sur votre commentaire écrit au paragraphe 5, vous parlez de données inquiétantes et vous faites référence aux recettes brutes des stations de langue française qui ne représenteraient que 17 à 18 pour cent de l'ensemble des stations AM‑FM commerciales au Canada.

8876             Pouvez‑vous nous dire en quoi... comment vous en êtes arrivé à nous dire que c'était inquiétant?  Est‑ce que... j'aimerais comprendre.

8877             M. PERREAULT:  Eh bien! écoutez; seulement 17, 18 pour cent de l'ensemble des recettes brutes alors que la proportion francophone au Canada est d'à peu près 25 pour cent, vous conviendrez avec nous qu'on pourrait s'imaginer et croire qu'il serait à peu près sensé, normal que ces recettes brutes aillent aussi chercher à peu près 25 pour cent de l'ensemble du total des recettes.

8878             Vous avez là un écart en proportion.

8879             CONSEILLÈRE NOËL:  Est‑ce que vous avez des statistiques à l'effet qu'il y aurait 25 pour cent de francophones à l'heure actuelle au Canada?

8880             M. PERREAULT:  Bien, c'est des statistiques publiées par Statistique Canada, recensement 2001, 25 pour cent de francophones et les québécois représentent aussi 25 pour cent de la population.  C'est des statistiques officielles, ça, publiées...

8881             CONSEILLÈRE NOËL:  J'avais l'impression que les taux avaient un peu baissé étant donné le peu de progression démographique notamment au Québec par rapport à certaines autres provinces comme l'Ontario, l'Alberta ou la Colombie‑Britannique.

8882             M. PERREAULT:  Vingt‑cinq pour cent, madame, à plus ou moins un pour cent, je peux vous l'assurer, étant branché à l'année longue sur les statistiques officielles du dernier recensement, je peux vous garantir que c'est dans des proportions de facilement un sur quatre, 25 pour cent, et si les recettes brutes des stations de radios de langue française ne représentent que 17, 18 pour cent, vous conviendrez avec nous qu'il y a un écart qui joue en faveur des stations de radios de langue anglaise et, évidemment, il est important pour un organisme comme le nôtre de vous permettre de le constater.

8883             Il y a un écart qui doit être comblé par des mesures qui pourraient aider à corriger cette situation.

8884             CONSEILLÈRE NOËL:  Pour ce qui est de la diffusion de musique populaire vocale de langue française, vous souhaitez... vous souhaitez que le Conseil hausse la norme à 75 pour cent en période de grande écoute, 75 pour cent et que le montant passe de 55 à 60 pour cent aux heures de grande écoute, avez‑vous pu mesurer l'impact d'une telle augmentation, compte tenu de ce qu'on a entendu cette semaine, qu'une telle augmentation pourrait avoir sur les radiodiffuseurs francophones qui se trouvent déjà pénalisés, d'après ce qu'ils nous disent, par le double critère, par rapport aux stations anglophones?

8885             M. PERREAULT:  D'abord, je ne vois pas en quoi elles sont pénalisées selon un des communiqués émis par le CRTC sur la santé financière des stations de radios.

8886             De 2004 à 2005 globalement, les profits de l'ensemble des stations de radios canadiennes qu'elles soient de langue française ou de langue anglaise ont augmenté les bénéfices avant impôt et intérêt ont augmenté de 24 pour cent.

8887             En ce qui concerne les radios FM de langue anglaise, les bénéfices avant impôt et intérêts ont augmenté de 2004 à 2005 de 20,9 pour cent et pour les stations de langue française de 8,2 pour cent.

8888             Vous conviendrez avec nous que la situation, si le 65 pour cent et le 55 pour cent avaient été à ce point dramatique, nous ne parlerions pas d'une augmentation des bénéfices comme de celles de je viens de vous faire part et ça, à partir d'un communiqué émis le 4 mai 2006 par le CRTC dont j'ai une copie devant moi.

8889             Néanmoins, je pense que... néanmoins, je pense qu'il est tout à fait normal de demander aux stations de radios de langue française d'être de langue française et d'augmenter le contenu de pièces vocales de langue française diffusées.  De demander de passer de 65 à 75 pour cent, c'est tout simplement de demander une mesure de correction, de telle sorte que les stations de langue française soient davantage de langue française, qu'elles soient davantage axées sur la mission qui est la leur, la diffusion de la langue de la francophonie et de la culture d'expression française.

8890             CONSEILLÈRE NOËL:  Les radiodiffuseurs nous ont expliqué cette semaine que le nombre de pièces musicales nouvelles ne leur permettaient pas d'en ajouter autant que vous souhaitez et que ce qui arrivait, c'est qu'on avait un phénomène où on brûlait les artistes émergents.

8891             Pouvez‑vous me faire vos commentaires là‑dessus, en imposant un montant trop élevé de nouvelles pièces?

8892             M. PERREAULT:  Je suis particulièrement étonné de ce commentaire puisque, selon une étude réalisée par le Ministère de la culture et des communications du Québec, un très grand nombre de pièces, je pense, dans les 25 pièces vocales les plus importantes, elles vont chercher 50 pour cent du temps de diffusion.

8893             Je pense que... et c'est aussi une autre de nos recommandations, il faudrait qu'on accorde plus de temps de diffusion aux nouveaux talents, aux artistes de la relève.

8894             Vous savez, je pense que s'il y a une chose de certaine, c'est qu'il y a au Québec une culture très riche, très créative qui demande d'avoir accès aux ondes des stations de radios.  Malheureusement, les stations de radios diffusent très souvent les mêmes pièces vocales d'une station à l'autre, répètent très souvent les mêmes pièces, ce qui fait que les nouveaux talents et c'est un des soucis important des objectifs de l'Avis 2006, et il est important à mon avis.

8895             Et vous savez, quand les stations de langue anglaise d'ailleurs qui disent manquer de contenu canadien pour respecter ‑‑ je parle des stations de langue anglaise ‑‑ qui manquent de contenu canadien pour respecter le 30 pour cent, eh! bien il faudrait peut‑être qu'elles apprennent...

8896             CONSEILLÈRE NOËL:  C'est 35.

8897             M. PERREAULT:  Il faudrait peut‑être qu'elles apprennent la réalité québécoise et francophone parce que jusqu'à preuve du contraire, ce qui se produit au Québec et ce qui se produit au sein de la francophonie canadienne est aussi canadien.

8898             Et s'ils manquent de pièces vocales pour respecter le 30 pour cent, eh! bien il y a un bassin très productif de chansons.

8899             CONSEILLÈRE NOËL:  Monsieur Perreault, depuis 1998, c'est 35 et non pas 30.

8900             M. PERREAULT:  Merci beaucoup, mais ils ont de la difficulté avec le 35, alors on est prêt à les aider en vous demandant...

8901             CONSEILLÈRE NOËL:  Maintenant, vous suggérez que les stations anglophones au Québec et les stations anglophones hors Québec soient tenues à des niveaux de musique de langue... à diffuser des niveaux de musique de langue française, 20 pour cent si elles sont au Québec ou si leur antenne est au Québec ou si elles sont captées au Québec et de 10 pour cent dans tous les autres cas.

8902             Pour ce qui est du Québec, est‑ce que ça ne vous inquiète pas une proposition comme ça?  Est‑ce qu'il n'y aurait pas un glissement encore plus grand de l'écoute francophone vers les stations anglophones, et une réduction en conséquence des recettes publicitaires qui sont basées sur les sons BBM pour les stations francophones?

8903             M. PERREAULT:  Je n'aurai véritablement aucune inquiétude vous savez parce que, déjà les stations de langue française diffusent à peu près 35 pour cent de pièces vocales en langue anglaise.

8904             Je pense que la contrepartie... vous savez, quand on connaît la situation asymétrique des cultures en Amérique du Nord et des langues, je pense que les mesures à adopter sont différentes d'une réalité à l'autre.

8905             D'imposer un minimum de musique vocale de langue française de 75 pour cent et de 60 pour cent aux heures de grande écoute, ça c'est une mesure responsable, compte tenu de la situation de la langue de la francophonie et de la culture d'expression française et de la présence massive de la culture anglophone et américaine, surtout américaine autour.

8906             De demander, d'imposer un seuil minimum de 10 pour cent et de 20 pour cent aux stations de langue anglaise, ça je pense que c'est une autre mesure responsable, mais différente, qui tient compte de la situation asymétrique pour les obliger à reconnaître qu'il y a une autre réalité, la réalité francophone du Québec, la réalité francophone de la Francophonie canadienne et de leur donner une place importante, d'autant plus qu'elles se plaignent de manquer de contenu canadien.

8907             CONSEILLÈRE NOËL:  Monsieur le président, ce sont là mes questions.

8908             LE PRÉSIDENT:  Merci.  Monsieur le vice‑président Arpin.

8909             CONSEILLER ARPIN:  Je vous ai vu pour la première fois aujourd'hui, donc je présume que vous n'avez pas assisté aux audiences au cours des jours précédents?

8910             M. PERREAULT:  Grâce à la technologie moderne, j'ai pu écouter à partir d'internet.  On vous en remercie d'ailleurs.

8911             CONSEILLER ARPIN:  Donc, bienvenue.  Quand le groupe Standard Radio a comparu, la question de la musique francophone sur les stations de langue anglaise particulièrement celles de Montréal a été soulevée et monsieur Braide qui est le directeur général des stations de Montréal a fait l'observation suivante :  il a dit : vous devriez plutôt poser la question aux radiodiffuseurs francophones, il me semble qu'ils ne veulent pas.

8912             Et la raison, il ne l'a pas donnée, mais elle nous est connue au Conseil, c'est de connaissance du Conseil, ça remonte dans le temps.  C'est que ça favorise le glissement des auditoires francophones vers les stations de langue anglaise.

8913             L'expérience a été tentée par la station CHOM pendant plusieurs années et à tel point qu'un jour le Conseil a été obligé de demander à CHOM d'arrêter de diffuser de la musique de langue française.  À ce moment‑là, CHOM diffusait cinq pour cent de musique vocale de langue française et la majeure partie de son auditoire était essentiellement des francophones.

8914             Le Conseil d'ailleurs a noté dans sa question autant à l'ACR qu'à Astral Radio, Cogeco et à Standard que l'auditoire des jeunes francophones de Montréal, 68,4 pour cent des auditoires des trois stations FM de Montréal étaient essentiellement constituées de francophones.

8915             Avez‑vous... pouvez‑vous peut‑être nous dire pourquoi ce phénomène‑là, qu'est‑ce qui attire les francophones vers ces stations de langue anglaise et qu'est‑ce qui attire aussi les francophones à la station WYUL que vous avez mentionnée?

8916             M. PERREAULT:  C'est le degré d'anglicisation des francophones qui et en cause.  C,est un problème qui excède de beaucoup la discussion ici aujourd'hui, bien qu'elle en fasse partie.

8917             Vous savez, 91 pour cent des anglophones au Canada sont unilingues anglais, donc vous avez plus de neuf canadiens anglais sur dix qui ignorent, qui ne sont pas capables d'accéder à notre réalité.  Le taux de connaissance de l'anglais chez les francophones est au‑delà de 40 pour cent.  Si vous enlevez les enfants qui, évidemment, n'ont pas appris l'anglais, vous constaterez que c'est souvent dans des proportions de un francophone... six francophones sur dix qui connaissent l'anglais.

8918             Cette anglicisation par la bilinguisation des francophones les amène, leur donne la possibilité d'écouter et d'accéder à l'autre culture.  Cet isolement du Canada anglais par son unilinguisme à quelque part, je pense que le Canada une responsabilité à laquelle peut contribuer le CRTC, mais je pense que l'unilinguisme anglais défavorise les stations de langue française et le bilinguisme des francophones, l'anglicisation des francophones avantage les stations de langue anglaise; je m'excuse.

8919             Et à cet égard, je pense que vous me demandiez une explication, je pense que l'essentiel de l'explication est là.  L'unilinguisme très répandu au sein du Canada anglais versus la connaissance très avancée de l'anglais au sein de la francophonie, ce qui crée, évidemment, une érosion de l'auditoire en faveur des stations de langue anglaise, mais au détriment des stations de langue française.

8920             Quand vous me dites que le temps d'écoute chez les jeunes de 12 à 17 ans, et c'est mentionné dans le mémoire du Ministère de la culture et des communications du Québec que 33 pour cent du temps d'écoute est consacré aux stations de langue anglaise, vous conviendrez avec nous que si les stations de langue anglaise ne diffusent aucun contenu canadien et pourtant canadien et elles se plaignent de manquer de contenu canadien, ne diffusent aucun contenu canadien de langue française, je pense que, là, il y a un phénomène d'érosion assez évident et l'érosion est double parce que même au sein des stations de langue anglaise, ils n'ont pas accès aux artistes de la francophonie.

8921             Je peux comprendre le côté délicate de la recommandation que nous faisons, je pense qu'à cet égard il y aurait lieu, à mon avis de bien y réfléchir, mais néanmoins, il va falloir briser ce cercle qui va en s'accentuant de l'anglicisation et de l'érosion des auditoires à la faveur des stations de langue anglaise.

8922             Il va falloir trouver une façon de briser ça. et ça, là‑dessus, jusqu'à preuve du contraire, la bilinguisation des anglophones n'a pas donné de résultat extraordinaire, ce qui fait qu'ils consomment très peu nos produits de langue française qui, pourtant, sont d'excellents produits puisqu'ils sont reconnus et nos artistes aussi, internationalement, mais ils ne peuvent pas les découvrir, ils n'ont pas accès à la...

8923             Ils n'ont pas de connaissance par la langue et les stations de radios ne les aident pas à leur donner le coup d'y accéder, ils ne diffusent aucun artiste de langue française.

8924             CONSEILLER ARPIN:  Monsieur Perreault, ça va être ma dernière question.  Vous vous présentez devant le Conseil pour faire des recommandations.  Vous avez dit que vous avez comparu devant le Comité du Patrimoine probablement avec les mêmes préoccupations.

8925             Est‑ce que vous avez déjà pris l'initiative de rencontrer des radiodiffuseurs eux‑mêmes, soit individuellement, soit par l'entremise... l'intermédiaire de leurs associations?

8926             M. PERREAULT:  Un très grand nombre de nos interventions se font justement par média interposé, par interventions publiques.

8927             Vous savez, c'est ici même, je pense qu'Impératif Français vous avait sensibilisé à l'exclusion dont nous sommes victimes dans cette région‑ci par Bell ExpressVu dans le domaine de la télédiffusion.  Bell ExpressVu refuse toujours de diffuser entièrement la station Radio‑Canada régionale de langue française, alors que Bell ExpressVu diffuse la station régionale de langue anglaise, CBOT.

8928             Nous avons fait plusieurs interventions et même notre organisme a remis à plusieurs reprises un prix citron à Bell ExpressVu pour ses pratiques d'exclusion et pourtant dénonçait et plus d'une fois par notre organisme, mais par d'autres également.  J'ai lu des éditoriaux dans le journal Le Droit, et pourtant ces pratiques d'exclusions continuent.

8929             Il y a eu des rencontres... il y a des rencontres chaque fois que nos intervenants...  il y a des rencontres par l'intermédiaire des médias.  Quand nous exposons des situations aussi inacceptables que celles qui ont une forte odeur de discrimination par la non‑diffusion de l'antenne régionale de Radio‑Canada, et je parle de la télé ici, vous conviendrez avec nous que... rencontres... s'ils souhaitent nous rencontrer à partir des déclarations que nous faisons, c'est avec plaisir que nous répéterons ce que nous avons dit publiquement et que nous vous répétons encore aujourd'hui et que nous vous avons dit à une des rencontres que nous avons eues ici concernant justement le cas de la radio publique.

8930             CONSEILLER ARPIN:  Je vous remercie, monsieur Perreault.  Je n'ai plus d'autres questions.

8931             LE PRÉSIDENT:  Merci beaucoup messieurs, madame et mesdames.

8932             Madame la secrétaire, le prochain item, s'il vous plaît.

8933             M. PERREAULT:  On vous remercie infiniment.  Au plaisir.

8934             LA SECRÉTAIRE:  Merci, monsieur le président.

8935             I would now invite the next participant, the Canadian Conference of the Arts, monsieur Alain Pineau, if you could come forward for your presentation.

8936             Mr. Pineau, when you are ready,  you have ten minutes for your presentation.

PRÉSENTATION / PRESENTATION

8937             M. PINEAU:  Merci.  Monsieur le président, mesdames et messieurs les commissaires.

8938             Depuis novembre dernier, j'ai l'honneur d'être le directeur général de la Conférence canadienne des arts.

 

8939             The Canadian Conference of the arts is a unique national organization with a long and proud tradition of service to the community and to a succession of Canadian governments and public agencies.

8940             For more than 60 years the CCA has represented the interests and been the national voice of Canada's arts and cultural communities from north to south, east to west, English and French.

8941             Artists, cultural producers and their associations from every medium and every part of the artistic continuum, creators, producers, distributors, exhibitors and the Heritage Institutions are under the CCA umbrella.

8942             Many are individuals CCA members, tens of thousands more are connected to us through professional cultural organizations in every arts discipline and trade association in all cultural industries.

8943             Il me fait grand plaisir de vous présenter aujourd'hui le point de vue de la CCA dans le cadre de cette audience dont l'importance ne fait aucun doute.  Il y a plusieurs années que la CCA n'avait pas comparu devant le CRTC.

8944             Quant à moi, ma dernière intervention remonte à 1995 quand je présidais la délégation de Radio‑Canada requérant une licence de services audios payants.  Mes neuf dernières années à Radio‑Canada ont été consacrées au lancement et à la gestion de Galaxie, le service commercial de musique continue de Radio‑Canada actuellement encore le service dominant du genre au pays.

8945             À ce titre, j'ai acquis une certaine familiarité avec les questions de quotas contenus canadiens, de contributions financières au développement du talent de chez nous

 

8946             There is no doubt, this is a time of significant transition for Canadian radio broadcasters and for the music industry with which they have a long standing symbiotic relationship.

8947             Audiences particularly younger Canadians are increasingly using new distribution technologies to receive music, news and information.

Web casting, broadcasting, downloading and all the other buzz words are having a real insignificant impact on both sectors.

8948             Young people are as passionate about music as ever, but they are moving away from radio.  There are many reasons for this, but as was mentioned in this hearing, commercial radio is largely responsible for that reality.

8949             Over the life of the policy you are going to establish radio broadcasters will indeed be facing increased competition from streamed audio that can originate anywhere in the world to the recently licensed satellite radio subscription services.

8950             Pourquoi la CCA se préoccupe‑t‑elle de la santé de l'industrie de la musique et des finances de la radio commerciale?

8951             À cause du contenu culturel dont elles sont responsables, les musiciens, les compositeurs, les interprètes et les producteurs contribuent de façon significatives à la définition de ce que nous sommes et de ce que nous avons à contribuer au dialogue mondial.

8952             Les succès actuels de notre musique sont biens connus.  Il ne fait pas oublier que cette activité culturelle était pratiquement inexistante avant la réglementation actuelle.

8953             We must build on this success and continue to provide Canadians and the world with a rich diversity of Canadian music in every imaginable genres as well as Canadian perspective in news, sports and other information programming, that is local, regional and national.

8954             History shows that where we regulate, the Canadian presence is much stronger than where we don't regulate.  We need only look at Canadian television and movies for proof.  For television?  There are public funding programs, Broadcasting Act provision, CRTC rules and regulations, Content rules and licence requirements.  For movies, there is only ‑‑ limited primarily to funding.

8955             The significant missing piece is Canadian content rules in movie theatres which have not been introduced for a variety of reasons and what has been the outcome?  After 50 years, we have a generally effective television system.

8956             Many believe that the recent problems concerning English language television drama have a lot to do with regulatory changes that CRTC made in 1999.

8957             In cinema, we continue to struggle to achieve even a two per cent market share in English Canada.  Yet, the talent pool of the two industries is more or less the same.  So, the primary differences are regulations and control of distribution systems, two issues that are very close to the heart of the CCA.

8958             Notre intervention insiste sur la nécessité non seulement de consolider la réglementation pour la radio commerciale, mais de l'étendre à toutes les plate‑formes de distribution.  Avec respect, nous nous demandons où en est la révision de l'exemption de 1999 promise pour 2004.

8959             La CCA croit qu'il est critique d'assurer une offre substantielle de contenu canadien sur les services de musique offerts sur internet par abonnement ou autrement et de revoir la décision aberrante et potentiellement pernicieuse de contenu canadien sur la radio satellite.

8960             CCA believes internet and DAB if it ever comes to pass, broadcasters can and should be regulated to ensure that they provide an appropriate supply of Canadian materials in their public offerings.

8961             These regulations probably cannot be Canadian content rules as they exist in the traditional media since the material is not necessarily scheduled and broadcast the same way.  But the present situation seems untenable to us.

8962             We all want Canada's broadcasters to take full advantage of the new technologies offered by internet or DAB, but when they do so, they are no longer regulated and they can effectively be in competition with their own regulated offerings.

8963             Internet service provider should also be asked as distribution  undertakings to provide access to Canadian sites and content and to make a financial contribution to arms‑length funding agencies that can be used to develop new Canadian content for the internet and other media.

8964             In CCA's views, if such regulations are not introduced soon, we will see precipitous declines in the production of Canadian content materials of all kinds and our cultural industries will either become marginalized or merely browns plant producers.

8965             Pour en revenir à la radio commerciale, nous croyons qu'il est tout à fait approprié et réaliste d'augmenter le contenu canadian pour la musique de catégorie 2 à 40 pour cent ou plus, d'avantage si on songe à instaurer un système incitatif dans lequel cas il faut établir au moins un plancher de 35 pour cent.

8966             Dans le cas de la musique classique, mon expérience comme responsable des cinq chaînes classiques de Galaxie me convient de la faisabilité de porter le contenu canadien à au moins 25 pour cent et pour le jazz à au moins 20 pour cent.

8967             Dans tous les cas, ces proportions devraient être mesurées sur une base de trois heures de diffusion, de façon à mettre définitivement fin à toute tentation de *gettoïser+ la musique canadienne aux heures de faible écoute.

8968             Encore une fois mon expérience à Galaxie m'a démontré de façon très claire que la musique canadienne particulièrement les nouveautés ne font pas fuir l'auditoire si la programmation est faite de façon compétente.

8969             Côté francophone, nous appuyons les représentations faites par nos collègues et membres de maintenir la politique actuelle.

8970             The commercial radio system is financially sound and there is a good reason to expect that it will continue to be so for the next five to ten years.  Radio is a useful vehicle for advertisers because the medium is local, targeted and easily measurable.

8971             CCA believes it's appropriate for the Canadian talent development contributions made by commercial radio broadcasters to increase dramatically to levels at least to return it to the 1995 ball park.

8972             We also believe strongly that new media, internet, satellite radio notably, be asked to contribute significantly more to Canadian talent development, this contribution being inversely proportional to the Canadian content that they offer.

8973             Let me finish by making a few comments about the debate on how these Canadian talent development funds should be disbursed.  CCA believes that Factor, Music Action, should continue to play the lead role in the system.  They presently operate about 20 different programs across a broad spectrum.

8974             There may be a role for the more targeted program offered by the Radio Star Maker Fund, Fonds Radio Star, which assist artists who have already achieved a certain level of success.

8975             There may also be a role for the provincial music industry associations who have a better handle of local needs than anyone else.

8976             But there must continue to be a place for Factor Musique Action, and arms‑length agencies that receive public funds and thus, adhere to strict operating and accountability standards.

8977             In closing, if I may add, I think quite frankly that broadcasters' contributions for the next few years are probably more reliable than federal funding, at least until proven wrong.

8978             Il me fera plaisir de répondre à vos questions si vous en avez.

8979             LE PRÉSIDENT:  Merci, monsieur Pineau.  Commissioner Cugini.

8980             COMMISSIONER CUGINI:  Good morning, Mr. Pineau.

8981             M. PINEAU:  Good morning.

8982             COMMISSIONER CUGINI:  Your oral presentation today was pretty true to your written submission, so I only have a couple of questions that are perhaps a bit more philosophical than they are detail‑oriented with regards to your submissions.

8983             You do advocate varying levels of Canadian content for different genres of music and as you've said today, popular music at 40, classical at 25 and jazz to at least 20.

8984             Based on what you've heard this week, I am wondering if you could for us assess what you think the impact would be of Canadian content at one level for all genres of music?

8985             M. PINEAU:  Quite frankly, I don't think that's realistic.  I mean, we don't have... we don't provide the same... I mean, for example, there is currently no or hardly any hip‑hop music being produced here.  I mean, when services like Galaxie offer a hip‑hop channel, it offers a platform.  Regulation and distribution provide an opportunity for music to develop.  I think you have to realize that.

8986             There was a long discussion internally and we consulted our membership because our membership covers a number of organizations who were here before and they are all over the map in terms of that.

8987             We try to strike something that is reasonable, achievable.  There were arguments, for example, that jazz could be more than 20 percent.  I think if it is so it should be gradual, because when we started with CanCon regulations there was hardly anything to speak of, so there is a first period where production comes but there are lots of weeds and everything gets played and eventually natural selection leads to the best to survive.  The more there is outlet, the more production there is.

8988             So I think you could look at raising the level progressively over various genres, but you have to take into account the reality of life, which is that these things will evolve over time.  So there could be step‑up procedures.  You are looking at five years so I don't think it is material.  If you were looking at 10 years I think you should really look at graduating steps in various genres.

8989             By they way, if I may use this platform to say why we think that the Canadian content regulation for satellite radio is a burden, is that you don't create audiences by putting a big dustbin in the middle of the room where all genres confused are thrown in.

8990             This is not the way people listen to music.  They don't listen to Canadian content.  People don't say, "Oh God, yes, I got the satellite service here.  I'm going to check what Canadian content is like today."  They want to hear, jazz, they want to hear rock 'n roll, they want to hear progressive, they want to hear ambient.  That is the way people use radio.

8991             What is important is that the Canadian content be weaved competently throughout the programming.

8992             COMMISSIONER CUGINI:  As you know, just about every broadcaster who has appeared before us this week has said if you raise Canadian content levels you will simply drive radio listeners to internet radio, to satellite radio.

8993             You obviously don't agree with that.

8994             MR. PINEAU:  No, I don't agree with that.  I think if they do their job properly they will find the right music and they will be able to put it into the programming the way that it fits.  I know that because they all use the same software that we use at Galaxie to do programming.

8995             It is all a matter of choosing the music and establishing the proper rules and you push the button and out it comes.  You check to make sure that the outcome is what you wanted, because no software system is perfect, but that is the way you do programming and that is the way you introduce talent.  And you do that no by hiring hackers who just plunk whatever comes in and say okay, I have my Canadian quota in today.

8996             I don't want to sound disparaging to the radio industry, that is not the point, but there are ways of doing it that will not drive people away at all.

8997             In nine years at Galaxie ‑‑ and we had Canadian content, 38 percent spread over 45 channels.  That means that some channels had to be ‑‑ 1950s, you don't have much Canadian content to put there, so you have to make up at the other end by putting more Canadian content.

8998             We had lots of Canadian content on the classical channels because there is lots of material.  Quite frankly, users of services like Galaxie or commercial radio don't really give a damn whether it is this conductor that conductor, as long as it is the piece that they like, because they are all competently recorded.

8999             THE CHAIRPERSON:  You haven't checked your audio files recently, have you?

9000             MR. PINEAU:  Sorry?

9001             THE CHAIRPERSON:  Those are fighting words.

‑‑‑ Laughter / Rires

9002             MR. PINEAU:  Sorry?

9003             THE CHAIRPERSON:  Choice of conductors is extremely important for many.

9004             MR. PINEAU:  Oh, it is, sir.  That is why I have a record collection at home.  But when I'm listening to Galaxie I am quite happy to listen to Beethoven's Fifth or Schubert's Eighth by a Canadian orchestra.

9005             COMMISSIONER CUGINI:  Just one final question.

9006             In your written submission you say:

"A judicious reinterpretation of the definition of a Canadian recording..."

9007             And you note that artists such as Diana Krall may not qualify as Canadian.

9008             MR. PINEAU:  Yes.

9009             COMMISSIONER CUGINI:  Are you suggesting a retooling of the MAPL system?

9010             MR. PINEAU:  Well, we didn't delve into that question and I will just answer on a personal level.

9011             When I was responsible for Galaxie I had a problem with the fact that she wouldn't qualify, quite frankly, as I have a problem with the fact that if it is Léopold Simoneau, or if it's Jon Vickers, this is not Canadian content?  I have a problem with that.

9012             I would not pose as an expert to say ‑‑ because there are many considerations to this, but I can only state that yes, we do have a problem.

9013             COMMISSIONER CUGINI:  Thank you, Mr. Pineau.

9014             Those are all my questions, Mr. Chairman.

9015             THE CHAIRPERSON:  Just to follow up on that, when you refer to your own experience which I'm interested in here when you were in charge of classical for Galaxie, when you say you think, as you put it here:

"...me convaincre de la faisabilité de porter le contenu canadien au moins à 25 pour cent."

9016                  (Tel que lu)

9017             You are saying that was content level achieved at Galaxie for classical?

9018             MR. PINEAU:  Actually it was higher than that.

9019             THE CHAIRPERSON:  What was it?

9020             MR. PINEAU:  It was only for compensation in other sectors and there is also lots of material available.  It depends.  We had five classical channels at Galaxie.  Opera was not very high.  There is not many opera ‑‑ quite frankly, I was very tempted to count as Canadian content an opera that had Jon Vickers in it even though it wasn't MAPL.

9021             Chamber music there are abundant recordings.  You don't have all the important stuff, but you have a lot of it.

9022             The pop classic, which is mostly what off‑air radio broadcasters are offering, there is ample choice.

9023             Where there are holes is somewhere in symphonic music and concertos, classical concertos, the most popular ones, but even those are coming available.

9024             And there are other ways of doing that, too.  I mean, it's possible to purchase rights to recorded concerts or things like that.  I mean, when you want to there are ways of doing it.

9025             I am a steady listener of the classical radio stations, it is my passion, and the kind of stuff that I hear there, they should have no problem meeting 25 per cent at all.  Quite frankly, I think it is a modest target.

9026             THE CHAIRPERSON:  Under the MAPL rules?

9027             MR. PINEAU:  Yes.  Of course it will lead to a lot of royalties flowing into TEFL musique and l'Orchestre symphonique de Montréal, amongst others, to the CBC also, but ATNA and ELECTA, Marquis ‑‑ the gentleman was here earlier this week.  This was all material that we used extensively.

9028             So there is more of a debate about the quality of Canadian recordings fitting MAPL for jazz, so we took a sort of compromise position there.

9029             THE CHAIRPERSON:  Right.  Okay.  Thank you very much.

9030             MR. PINEAU:  You are most welcome.

9031             LE PRÉSIDENT : Monsieur Arpin...?

9032             CONSEILLER ARPIN : Vous parlez avec abondance de la musique classique.  Une audience qu'on a eu récemment, dont le Conseil n'a pas encore pris de décision, mais le requérant, qui était monsieur Collier, nous a dit qu'il était capable de supporter 40 pour cent de musique classique canadienne.

9033             Est‑ce que vous trouvez, basé sur votre expérience, que c'est une proposition réaliste?

9034             M. PINEAU : Moi, je vais vous dire franchement, j'ai programmé personnellement la chaîne des Grands classiques, et j'ai programmé personnellement la chaîne Baroque, et un niveau de 50 pour cent est facile à atteindre quand vous comptez la rotation.

9035             CONSEILLER ARPIN : Oui, évidemment.  Oui, oui.  Je suis sûr qu'il comptait la rotation, puis il avait suffisamment d'expérience pour répondre à la question.

9036             M. PINEAU : Quarante pour cent, je... puis, d'ailleurs, monsieur Collier sait de quoi il parle là.

9037             CONSEILLER ARPIN : Oui.

9038             M. PINEAU : Je le respecte beaucoup à ce chapitre‑là.  C'est un grand amateur de musique classique, puis il connaît ses enregistrements.

9039             CONSEILLER ARPIN : Et, donc, il y a suffisamment... parce que vous avez mentionné Jon Vickers et quelques autres qui ont enregistré sur des labels étrangers, et je pense à monsieur Hamelin, je pense à Alain Trudel.  Je sais qu'il y a beaucoup d'enregistrements qui sont faits en Europe.  Mais c'est encore le même problème que vous avez mentionné avec Diana Krall.

9040             M. PINEAU : Oui.  Oui.  Mais malgré ça, même en disant que ces gens‑là ne compteraient pas comme contenu canadien ‑‑ et, encore une fois, j'ai un problème à ce chapitre‑là ‑‑ je pense que le contenu... MAPL devrait peut‑être être un peu modulé en fonction des genres musicaux.

9041             CONSEILLER ARPIN : Bon, d'accord.

9042             Il y a d'autres intervenants qui ont soumis au Conseil, encore dans le secteur de la musique classique, que le Conseil devrait penser à une réglementation qui favoriserait les compositeurs canadiens.  Un groupe a mentionné 3 pour cent, et un autre groupe a mentionné 5 pour cent.

9043             Croyez‑vous que ce sont des demandes qui sont réalistes?  Je parle bien de compositeurs canadiens.  Donc, c'est de la musique beaucoup plus contemporaine.  Est‑ce qu'il y en a suffisamment, basé sur votre expérience sur disque et puis...

9044             M. PINEAU : Il y en a suffisamment, je le crois.  Oui, il y en a une bonne quantité.

9045             Mais là, vous avez mis le doigt sur quelque chose qui est extrêmement difficile à discuter.  J'étais toujours dans une position très difficile à Galaxie quand j'allais devant le Conseil québécois de la musique pour donner des bourses à des artistes, où on se faisait interpeller, justement, sur le fait que sur 45 scènes, il n'y en a pas une qui soit consacrée à la musique contemporaine.

9046             Vous avez le même débat qui est soulevé chaque fois que Radio‑Canada apparaît devant vous.  Il y a un problème là, puis moi, je dois dire que de ce côté‑là... le côté commercial chez moi l'emporte sur le côté nationaliste.  C'est qu'il faut être réaliste aussi.

9047             Est‑ce que... il faut que cette musique‑là soit diffusée, mais ce n'est peut‑être pas dans le broadcasting que ça se fait.  Les nouvelles technologies permettent d'offrir ce genre de musique‑là.  Cette musique‑là, le public doit y être introduit par le biais des concerts et tout.

9048             Il y a toute une infrastructure derrière ça.  Demander à des gens qui doivent vivre de revenus commerciaux puis attirer du monde, de jouer de la musique qui est tellement marginale, je regrette de le dire là, je vais peut‑être me faire tuer par les membres que je représente, mais personnellement, ma sympathie est partagée.

9049             CONSEILLER ARPIN : On risque de l'entendre à 6 h 00 le matin ou à 11 h 00 le soir?

9050             M. PINEAU : Oui, probablement, un peu comme c'était à Radio‑Canada, d'ailleurs, où ça passait à 11 h 00 le soir les fins de semaine.

9051             CONSEILLER ARPIN : Je vous réfère à votre page 6... et là, la question, je vais vous la poser en anglais.  Vous pouvez y répondre selon votre choix.  Effectivement, c'est dans votre dernier paragraphe en anglais de la page 6.

9052             Ma question, c'est : Do you have substantive proof to sustain that if internet rules are not shortly introduced production of Canadian content will decline?

 

9053             M. PINEAU : Je m'excuse, je cherche...

9054             CONSEILLER ARPIN : Parce que vous dites :

"If such regulations are not introduced soon, we will see precipitous declines of the production of Canadian content materials of all kinds."  (As read)

9055             M. PINEAU : Oui.

9056             CONSEILLER ARPIN : Est‑ce que vous avez... pouvez‑vous documenter cette affirmation‑là?

9057             M. PINEAU : Non, pas au sens statistique du mot.  Puis ça serait difficile de le faire, d'ailleurs, parce que c'est une prédiction.

9058             CONSEILLER ARPIN : Oui.

9059             M. PINEAU : Maintenant, precipitous, on peut argumenter sur qu'est‑ce qui est precipitous là, est‑ce que c'est cinq ans ou est‑ce que c'est 10 ans.

9060             Ça pris 30 ans pour construire l'industrie de la musique qu'on a actuellement, qui réussit à travers le monde.

9061             Ça peut prendre beaucoup moins de temps pour la démanteler parce que... je vais prendre l'exemple qui était... les gens qui me précédaient ici tout à l'heure.

9062             On le sait que ça prend une seule génération pour effacer un groupe linguistique.  Je connais plein de gens dont les noms sont tout à fait francophones et dont les parents parlaient français et qui ne comprennent pas aujourd'hui.

9063             Bien, c'est un peu la même chose aussi.  Avec l'explosion des moyens de distribution qu'on a maintenant... et toutes ces questions‑là sont interreliées.  Ce n'est pas pour rien qu'on mentionne ici la question de la propriété étrangère, qui va certainement faire l'objet d'un débat politique...

9064             CONSEILLER ARPIN : Oui.

9065             M. PINEAU : ...très actif chez vous et ailleurs, et on y sera.

9066             CONSEILLER ARPIN : Je suis sûr.  Sûr, sûr, sûr.

9067             M. PINEAU : Absolument.

9068             CONSEILLER ARPIN : Donc, si je vous comprends bien, c'est que vous nous invitez à la vigilance et non nécessairement à introduire une instance réglementaire dès la semaine prochaine?

9069             M. PINEAU : Non, mais je vous dirais que le mois prochain serait déjà pas trop tard.

9070             CONSEILLER ARPIN : Ah! bon.

9071             M. PINEAU : Et si je peux me permettre, on aura peut‑être des suggestions à faire qui pourraient être constructives à ce chapitre‑là, parce que je comprends les réalités commerciales de la radio satellite, qui était ici plus tôt.

9072             Quand les chaînes viennent des États‑Unis, ça va prendre du temps avant que le contenu canadien soit très élevé là‑dessus.  Mais il y a d'autres façons, puis j'écoutais avec intérêt comment est‑ce qu'ils contribuent au développement.

9073             Bien, s'ils ne sont pas capables de contribuer au développement en exposant puis en donnant des tribunes, parce que ce n'est pas deux chaînes francophones qui vont donner beaucoup, beaucoup d'exposure.  Ce n'est pas rien que de mettre ça en l'air, c'est de voir qui l'écoute.

9074             CONSEILLER ARPIN : Oui.

9075             M. PINEAU : Demandez‑leur quand ils reviendront chez vous quelles statistiques ils ont sur l'écoute qu'il y a de ces chaînes‑là spécifiquement.  Ils sont assez riches pour se payer cette recherche‑là, je pense, avec les backers qu'ils ont.

9076             CONSEILLER ARPIN : On s'est fait dire à l'audience par les gens du groupe Jim Pattison ‑‑ évidemment, ils ne nous ont pas donné des données sur l'écoute francophone, mais ils nous ont donné des données globales ‑‑ que la part de marché de la radio par satellite, selon BBM du printemps 2006, dans le marché de Kamloops, c'était 9 parts de marché.

9077             M. PINEAU : Oui.  Mais ce qui est important de regarder là‑dedans pour ceux qui viennent dire, on fait du contenu canadien, holà, holà, c'est qui l'écoute.

9078             CONSEILLER ARPIN : Oui, oui.

9079             M. PINEAU : Ce n'est pas rien que d'en mettre sur une tablette.  Si c'est là, puis que personne n'y touche, puis que c'est couvert de poussière...

9080             CONSEILLER ARPIN : Et je comprends que c'est 9 parts consolidés des 200 canaux qui sont là, parce qu'il y a deux entreprises, hein.

9081             M. PINEAU : Je reconnais, cependant, qu'ils font une contribution, puis j'étais très intéressé de les entendre parler de ce qu'ils font en terme d'exposure, puis en terme d'entrevue, puis en terme de publicité, puis en terme d'argent surtout, parce que s'ils ne sont pas capables de donner une tablette ou un débouché que le monde va écouter pour vraie là, bien, qu'ils compensent en donnant plus d'argent.

9082             CONSEILLER ARPIN : Oui.

9083             M. PINEAU : C'est ça, puis c'est la même chose pour internet.  Puis vous allez nous revoir réintervenir sur une autre demande qui est devant vous concernant la distribution de ces signaux‑là sur le câble, parce que ça, c'est the thin edge of the wedge là.

9084             CONSEILLER ARPIN : Oui.  Écoutez, on se reverra à ce moment‑là.  Je vous remercie, Monsieur Pineau.

9085             M. PINEAU : Je ne pense pas qu'il y aura d'audience publique, mais vous allez me lire.

‑‑‑ Rires / Laughter

9086             THE CHAIRPERSON:  Mr. Pineau, when you were programming the classical stations for Galaxie, did you ever track record sales?

9087             One of the arguments that we have heard is that record sales of Canadian recordings appear to be at the 16 percent level overall.  I don't think it was broken down by category.

9088             Do you have any idea of classic record sales percent Canadian of the classical record sales?

9089             MR. PINEAU:  No, I'm sorry, I don't have that information.

9090             THE CHAIRPERSON:  You have never tracked that?

9091             MR. PINEAU:  No, I'm sorry, I don't have that information.

9092             THE CHAIRPERSON:  Do you think it is a pertinent consideration in establishing content quotas?

9093             MR. PINEAU:  I don't think so, quite frankly.

9094             THE CHAIRPERSON:  Why is that?

9095             MR. PINEAU:  As long as a recording is available it can be played there.  It generates royalties, it is another way of feeding the system, it is another way of exposing our artists.  Record sales is one way, royalties on services like this.

9096             By the way, when I suggest that regulation and contributions be proportionate, you have the precedent in Galaxie for example.  Galaxie was asked to provide 4 percent of its gross revenue for talent development.  That is not what radio is providing.

9097             So you can modulate, and you can modulate with commercial radio, you can have a different level much higher because they don't contribute in other ways with satellite radio or with internet providers like Rogers or like anyone else, Sympatico who offers only MSN music.  How much Canadian content is there?

9098             I am wired at home.  I can listen to MSN channel anywhere in the home.  It comes from my computer.  This is direct competition with everything else that has to do with Canadian content, let alone commercial radio.  I think you have to bear that in mind.

9099             One of my concerns, quite frankly, coming here ‑‑ and I'm glad to see that the debate is not that way and you seem to be open to the concept also ‑‑ we cannot look at any of these components separate from the big picture.

9100             THE CHAIRPERSON:  I certainly think there is general consensus on that.

9101             Thank you very much, Mr. Pineau, for appearing today.

9102             M. PINEAU:  Merci beaucoup.

9103             LE PRÉSIDENT:  Merci beaucoup.

9104             Madam Secretary.

9105             THE SECRETARY:  Thank you, Mr. Chairman.

9106             Before going to the next participant I would just like to indicate for the record there are three participants who have advised us that they will not be appearing.

9107             One is No. 44 on the Agenda, Monsieur Jean‑Robert Bisaillon, Société pour la promotion de la relève musicale de l'espace francophone; No. 51, La Fédération nationale des communications; et également le numéro 50, Mr. John Stevenson.

9108             I would now call on the next participant, who was expected to appear yesterday but due to a serious consideration he was asked to participate today.

9109             I am calling Evanov Radio Group Inc., if you would come forward for your presentation.

‑‑‑ Pause

PRESENTATION / PRÉSENTATION

9110             MR. B. EVANOV:  Before we begin, thank you for considering our problem of yesterday.

9111             We have appeared before everyone on the Panel, I believe, in previous hearings but this is the first time before one of the Commissioners.  So we would like to say bonjourno.

9112             Bonjour and good morning, Mr. Chairman, Monsieur Vice‑Chair, Commissioners and Commission staff.

9113             My name is Bill Evanov.  I am here today with my team to present comments that are in addition to those we filed in these proceedings.

9114             With me today, and seated at my right, is Carmela Laurignano, Vice‑President of our Radio group; and to my left is Paul Evanov, Vice‑President of Programming.

9115             Carmela will summarize the comments we submitted in the written phase of this process.

9116             MS LAURIGNANO:  We think competition is vital to the long‑term health of any industry.  Given the recently published revenue figures for the industry, it is undeniable that the 1998 decision by the Commission to change the ownership rules has made the radio industry more profitable.

9117             However, we would believe it has not necessarily served to strengthen it.  Fewer companies control more of the radio spectrum and tuning among key demographics has declined.

9118             We feel that it is the independent radio operators ‑‑ unfettered by public offerings and unable to amortize the cost of operations across stations in profitable markets ‑‑ that are really responding to consumer needs.  Beyond just our own group we can point to many other small operators across this country who have taken risks with formats, found underserved demos and created truly local initiatives in both programming and CTD.

9119             And most importantly these operators have found success, in hours tuned and in advertiser support.

9120             Smaller operators may not report the same high level of earnings as the larger companies, but this should not be the test of their success or contribution.  It goes without saying that we are not adverse to profits, but it is clear that the larger operators have consistently chosen to serve markets and audiences that are most advertiser friendly.

9121             In the Canadian broadcast system it is the smaller operators by and large who are filling in the gaps in service, making sure that ethnic groups, youth, smaller communities and niche markets are served.

9122             Their collective contribution is also sharply demonstrated in the innovative contributions to Canadian Talent Development that are evident at most licence hearings.  After we reviewed several applications spanning multiple markets and proceedings, we were left to conclude that it is generally the smaller operators that bring forward the truly local initiatives for developing talent.

9123             Much has been said about the role of FACTOR and StarMaker in these proceedings.  There has even been a position put forward that 80 percent of all monies should be split between these two groups in English Canada.

9124             However, we think this position completely undermines the very goal of funding Canadian Talent Development.

9125             Music, like art, is a matter of taste.  So, too, then is the decision of who gets funding and how much.  And while we do not presume that our assessments are superior to that of either of these funding organizations, we do recognize they are different.  And in that difference there is value.

9126             We think the more people engaged in the decision of who gets funding in this country, the better off we all will be.  This includes artists, consumers, broadcasters and regulators.

9127             We feel that broadcasters should not only be encouraged but also rewarded for their innovative local initiatives that expand the opportunities for talent from all over this country to access funds and develop their craft.

9128             We noted in our filing that when we write a cheque to FACTOR we have no really idea where the money goes.  Thanks to the audited report by PWC that was filed by the CAB, we now do.

9129             And while we do not question the very real talent of the recipients, we note with dismay that several recipients of funding have successful careers, receive radio airplay and are Canadian success stories in their own right.

9130             This sadly explains to us why so many young and aspiring artists find their way to our door complaining that they need help.

9131             If you limit the monies that radio operators can direct to these artists by forcing the funding to two national organizations with mandates that include funding established and successful acts, you will do so at the detriment to community based initiatives.

9132             Artists are not born ready to record, and if we do not fund the artists who are in their pre‑recording phase, who will?

9133             Concentrating funding will serve the interests of the recording industry and certainly make it much easier to pull together an application.  But it really does not serve the intent of the Canadian Talent Development, nor we believe the needs of the artistic community.

9134             MR. P. EVANOV:  One of the areas of concern that we would like to touch on is Canadian Content.  I would like to address this by responding to the comment filed on the levels of CanCon.

9135             We do not think that the level of Canadian Content should go above the current 35 percent.  We say this although we, too, have committed at hearings to play at least 40 percent in some of our most recent applications.

9136             Some formats, including the two we have pioneered, can easily handle this commitment because the supply of artists and the genres of music being played is sufficient.  For other genres, however, this is not the case and increased requirements will result in higher repetition of a few artists.

9137             Gold formats, for example, are unable to include new and emerging artists at a level that truly promotes Canadian talent.

9138             The predominance of Gold based formats contributes the consumer perception that a lot of radio sounds the same because the same artists are played frequently and everywhere.  This does no one any favours.  As a programmer, I am very sensitive to issue of listener fatigue and artist or title burn‑out.

9139             When an artist is burned out in programming terms, it means that listeners actually tune out when they are played, and from a business perspective this makes no sense.  We lose listeners and for the artist there will be fewer CD sales and lower attendance at live performances.

9140             We support a Smart 35 that encourages broadcasters to play more Canadian selections by rewarding then through reducing the overall percentage requirement. This means that broadcasters will be better positioned to meet the consumer need for diversity and variety in music ‑‑ a recurring theme in all of the programming research we look at.

9141             MR. B. EVANOV:  Digital radio.  Over the years the Commission has encouraged the industry to invest in digital.  At licence applications and renewals the broadcast industry has been directed to adopt and adapt the L‑Band digital technology.  Broadcasters have incurred considerable capital and ongoing carrying costs with no results.  The L‑Band digital experiment has thus far failed.

9142             When Canada adopted L‑Band digital, or Eureka, the United States, for reasons we will never know, rejected its use.  That message did not reach Ford and General Motors in Canada, which more than three years ago announced that digital radio would be in their cars and would be rolled out in numerous models.

9143             This is what Canadian broadcasters needed for the experiment to succeed.  They could now launch a campaign promoting both in‑car use and portable use of digital radio.

9144             Then out of the blue ‑‑ for reasons we will also never know ‑‑ the two major car manufacturers did an about‑face, a 180‑degree turnaround, and announced that they would not put digital in their cars.  Later they announced they would carry satellite radio.

9145             The selling thrust of digital radio was based on state of the art sound quality.  Therein lies the mistake and the failure of the digital experiment in Canada.

9146             If we had created unique programming that appealed to niche markets, a demand for the digital frequency would have been established.  In Toronto alone we would have served more than 20 distinct niche markets.  When you serve 20 niche markets, they each create passion and enthusiasm for that particular service, which collectively with the total 20 could have convinced other car manufacturers to include digital.

9147             Even Ford and GM, for a few pennies more, could have added digital in the car as well as a satellite band.

9148             But our focus was on digital sound clarity, and the automobile roll‑out would have made it very, very easy.  Yet the emphasis should have been on programming, and 14 hours alone does not create niche programming appeal.

9149             Without the automobile, it is redundant to carry mainstream programming on both FM and digital channels simultaneously.

9150             The options are clear.

9151             We keep doing what we are doing ‑‑ broadcasting to no one ‑‑ while waiting to see what happens with new technology, as the CAB has suggested.

9152             Or we shut down the digital transmitter sites and cease broadcasting.

9153             Or we are proposing, for a five‑year experimental period, totally deregulate digital radio and allow broadcasters to program a unique service to underserved segment of the population.  This niche broadcasting will create a demand for digital radio.  Eventually that demand will convince car manufacturers to include L‑Band.

9154             Give us free rein to create the content, address niche markets and we will create a demand for digital receivers.  If we do not have the latitude in a highly competitive multimedia to create offerings that distinguish the value of the digital platform, all of our investments to date will have been lost.

9155             MR. P. EVANOV:  In summary, we strongly urge the Commission to implement any changes to policy only after the impact on the independent broadcasters has been thoroughly considered.  Any change that strengthens their position or expands their role would be a direct contribution to the goals of the Broadcasting Act.

9156             We thank you for inviting us to appear and for us to present our case.

9157             We will be happy to answer any questions you might have.

9158             THE CHAIRPERSON:  Thank you very much.

9159             I am going to lead off and my colleagues will pick up other questions possibly.

9160             I appreciate the situation you are in, Mr. Evanov, in regard to the L‑Band and your sense of the stranded investment and so on.

9161             I am wondering about some of the assumptions, though.

9162             Your assumption is that with niche broadcasting, essentially allowing you to find formats without regulatory constraints, I assume is what you are saying, you believe that you can create enough demand to convince the car manufacturers to install in‑car receivers that will then provide you with the critical mass you need.

9163             I am wondering about those assumptions, given the size of the Toronto market, the Canadian market, how you believe that this will actually occur.

9164             MR. B. EVANOV:  First, I believe we have to do something.  We can't just let this channel sit there.

9165             We could hold it for future use, but we can do that anyway while we experiment.

9166             I guess what we are saying is what we are experimenting with now is really going nowhere.  There is no one listening to digital radio.  Unlike the Vice‑Chair, I don't even own a digital radio.

9167             I guess what turned everyone off is when the car manufacturers said they were not going to put it in there.

9168             We have had a good track record of creating niche programming, and very successful niche programming:  with an ethnic station that had a poor signal in the Toronto‑Brampton area; with even Z103 in the early days, which is CIDC‑FM, which doesn't cover the whole CMA; with FOXY, which has a poor signal.

9169             But with all these we more or less went after niche programming.

9170             Initially on CIDC‑FM we created the dance music format.  Then we had ‑‑

9171             THE CHAIRPERSON:  If you could just bear with me on the question.

9172             MR. B. EVANOV:  I'm sorry.

9173             THE CHAIRPERSON:  I am questioning your assumption that even if you did that, you would be able to somehow convince the car manufacturers.

9174             MR. B. EVANOV:  Let me jump forward.

9175             It is not based on any research with the car companies, but I know that if you create a market of 20 specialty channels in Toronto and call them digital, and those channels have a following, then you have a collective total of those.  I think you have a very good case to make with the car manufacturers.

9176             I think Duff Roman mentioned ‑‑ and I'm not sure if it was in the hearing or outside the hearing ‑‑ that to add L‑Band to the receiver is not a major problem.  It's a matter of one or two chips and it's not a costly factor.  The car radios can carry L‑Band.  They can carry ‑‑

9177             THE CHAIRPERSON:  Your statement that even Ford and GM for a few pennies could add digital, are you basing it on your conversation with Duff Roman ‑‑

9178             MR. B. EVANOV:  With other broadcasters and people we have talked to.

9179             THE CHAIRPERSON:  ‑‑ or any knowledge that you actually have as to the costs?

9180             MR. B. EVANOV:  Okay.  I haven't assessed the costs but I've talked to various engineers. I've talked to people that I've dealt with, people in Europe, that have basically conveyed to me ‑‑ and pennies may be not the right word, but you are not looking at an astronomical cost to include various bands on a digital radio.

9181             We think it would happen if there was ‑‑ if there were 20 channels operating or 25 channels operating in Toronto, as the specialty channels do, I think that someone is going to look at this and say there is a real market here.  And if I put them in my cars, these people will want to have them.

9182             THE CHAIRPERSON:  You are saying, given the other alternatives, as desperate as that one is, it is probably no worse than just abandoning the channel or going forward.

9183             I don't see the economic argument making much sense, frankly.

9184             I see that you are in a desperate situation or you feel that you are, and you want to try and figure out something.

9185             MR. B. EVANOV:  I am not coming to you with any great research on this.

9186             THE CHAIRPERSON:  Yes.

9187             MR. B. EVANOV:  I guess I am coming to you with years of broadcast experience in terms of niche marketing.  I know what we can do.

9188             I think it could be a successful venture in the Greater Toronto Area, for example.

9189             THE CHAIRPERSON:  Have you talked to other broadcasters about this proposal?

9190             You are assuming 20 other broadcasters or 20 other stations will set up and use their L‑Band frequencies to do the same.

9191             MS LAURIGNANO:  If I could just add to that, yes, we have spoken with other broadcasters when we cry the blues together about the annual renewals for the transmitter and the cost, and at meetings.

9192             THE CHAIRPERSON:  Sure.

9193             MS LAURIGNANO:  I can also speak, for example, of the CAEB, the ethnic broadcasters, that we are on the same page in terms of we need to do something, especially in the larger areas, larger markets such as Toronto, Vancouver, Montreal, Calgary, and so on, where the space on the dial is so limited and the demand, as you know, is so great for some services, be they ethnic or specialty or other niche kind of formats.

9194             We do believe that there is room for some service to be accomplished through digital.  If the service is unique and you can't it anywhere else, it will drive people to buy a digital radio receiver.  And eventually, if the demand is there, it just makes economic sense for the car manufacturers and other people eventually to get on board.

9195             It is not unlike the SCMO type of scenario where people went out and bought the receivers.  We certainly think that digital has a better chance than the SCMO in terms of equipment and sound, and that kind of thing.

9196             THE CHAIRPERSON:  General Sarnoff's philosophy was the opposite.  He handed out radios free so that there would be listeners ‑‑

9197             MS LAURIGNANO:  That's right.

9198             THE CHAIRPERSON:  ‑‑ be able to broadcast ‑‑

9199             MS LAURIGNANO:  Right.

9200             THE CHAIRPERSON:  Coming at it the other way.

9201             MS LAURIGNANO:  But we can't do that unless we can offer the programming.  If the programming is good and great and it is niche and it is not available anywhere else, then we the broadcasters would be happy to go get the radios and give it the people.

9202             THE CHAIRPERSON:  Thank you.

9203             Monsieur Arpin.

9204             COMMISSIONER ARPIN:  Only for the record, because it is not a question but I think it has to be said at some point in time.

9205             There are reasons why the manufacturers like GM and Ford did quit.  They felt that the broadcasters were not investing enough into the technology.  They didn't develop the Windsor‑Quebec City corridor fast enough.

9206             They are not interested in Toronto.  They are not interested in Montreal, because obviously people commute between localities and they were looking at the long haul, particularly GM with their service ‑‑ I forget the name.

9207             MS LAURIGNANO:  OnStar.

9208             COMMISSIONER ARPIN:  OnStar.  They were seeing that DAB was a very good way to introduce OnStar in cars, and obviously they were looking for the highways.  They were looking for the Trans‑Canada Highway.

9209             How long will it take us to develop from St. John's to Victoria?

9210             They felt that the plan that the broadcaster had, which was voluntary based on the various participants, some interested, some not interested, some looking towards IBOC rather than DAB.  So they made their decision.

9211             As Duff Roman stated, it cost $13 million to GM to quit.

9212             And that, I think for the record, has to be said.

9213             A multiplex receiver is coming.  Only a week ago, RadioScape, which is a receiver manufacturer based in the U.K., announced that they were coming out with a new receiver that integrates AM, DAB, FM, DRM.  And obviously they will be capable also over a short period of time to have satellite services.

9214             So it is coming.  But I understand what you said.  You said it may be worth trying other alternatives.

9215             But as long as we don't develop the corridors, the car manufacturers won't be there.

9216             MS LAURIGNANO:  Well, it's good that the digital receivers are coming.  We think under the current conditions, where we are practically simulcasting on both bands, with only 14 hours, that too will not drive the roll‑out or the sales of the radios.

9217             If people have it over the air and it is already so much more portable and convenient, they will not go out and invest in that.

9218             COMMISSIONER ARPIN:  Thank you.

9219             THE CHAIRPERSON:  Thank you very much for appearing before us.

9220             MS LAURIGNANO:  Thank you.

9221             THE CHAIRPERSON:  I think we will break now for lunch and resume at 2:00 p.m.

9222             Nous reprendons à 14 h 00.

‑‑‑ Upon recessing at 1240 / Suspension à 1240

‑‑‑ Upon resuming at 1407 / Reprise à 1407

9223             THE CHAIRPERSON:  Order, please.  À l'ordre, s'il vous plaît.

9224             Madam Secretary, would you call the next item.

9225             THE SECRETARY:  Thank you, Mr. Chairman.

9226             I would now invite the Coalition of Nine Provincial/Territorial Music Industry in Process Association to make their presentation.  Mr. Sam Baardman will be appearing for this participant.

9227             Mr. Baardman, you have 10 minutes for your presentation.

9228             MR. BAARDMAN:  Thank you.

PRESENTATION / PRÉSENTATION

9229             MR. BAARDMAN:  Good afternoon, Mr. Chairman and members of the Commission.

9230             My name is Sam Baardman and I am Executive Director of the Manitoba Recording Industry Association and Chair of FACTOR's National Advisory Board.

9231             I am pleased to be speaking today on behalf of a coalition of nine provincial and territorial music industry associations representing the regional interests of the Canadian music industry outside of Quebec.

9232             As we noted in our submission, we are new to the ongoing dialogue between the music industry, broadcasters and the CRTC, and we sincerely appreciate the opportunity to participate in this important national conversation.

9233             Our intent here today is to respond to two key issues that have been raised in this review to date.

9234             First, to CanCon.  As you recall, in our original submission we asked that the Commission consider strengthening Canadian content regulations across five different dimensions but the aspect of CanCon that seems to be garnering the most attention is the issue of emerging artists and how to define them for the purpose of broadcast.

9235             The most reasonable definition offered from the intervenors, in our opinion, is the plan in which artists are defined as emerging for a period of 12 months after reaching the Top 40 or after reaching 50,000 units in certified sales.

9236             We believe, however, that sales levels should be irrelevant to the definition.  The concept of emerging artist should relate to the emergence of an artist from obscurity into the radio marketplace and, in our view, no logical connection to sales can be drawn from this definition.

9237             We would also suggest that 18 months rather than 12 is a more appropriate time frame for artists trying to establish themselves in the radio marketplace.

9238             Regarding chart placement, we would prefer that the cutoff be set at achieving the Top 20 rather than the Top 40.  We know that there are various suggestions regarding chart placement and we would encourage the Commission to test out a variety of models before making a decision.

9239             Finally, we believe that a bonus system will incentivize the process and we would support this as long as incentives do not allow CanCon levels to fall below 35 per cent overall.

9240             Regarding the issue of CanCon, the learning curve for us has been steep, and since the March deadline we have been reading the submissions of other intervenors with great interest.

9241             We have great respect for the complexity of radio programming and we appreciate the challenges and risks inherent in playing new and unfamiliar music.

9242             But despite this, we would like to reiterate what the CAB itself pointed out to the Commission on Monday morning when it noted that:

"The future success of radio will rest on its ability to localize and editorialize to assist their listeners in navigating the growing array of choices present in the music marketplace and to point them towards new and exciting music."

(As read)

9243             We would encourage broadcasters to begin to initiate that relationship with their listeners now, thus making room for new Canadian artists in the process.

9244             I would like to turn to the matter of Canadian talent development.

9245             We would like to express our sincere appreciation for the CTD contributions that have been made in the past by broadcasters, especially those who have supported some of our associations directly and also for the support offered by radio through its participation in FACTOR.

9246             As we have said before, nothing could be more important to our artists and other constituents than sustaining and increasing the CTD contributions made by broadcasters.

9247             In our submission, we made specific suggestions regarding increased level of CTD funding and we welcome questions from commissioners regarding those suggestions.

9248             However, I would like to comment today on the proposal by the CAB to consolidate its CTD contributions entirely within the two Starmaker funds, effectively eliminating all CTD contributions to FACTOR and Musicaction.

9249             We find the CAB's proposal to be nothing short of alarming and we believe its implementation would be disastrous for the industry.

9250             It is clear to us that the loss of CTD contributions to FACTOR would result in a drastic reduction in the funds that FACTOR has available to distribute through its programs.

9251             What alarms us even more is that the Department of Canadian Heritage has stated that if private broadcaster contributions were withdrawn from FACTOR, their own contributions to FACTOR would be reconsidered and possibly withdrawn, resulting in a complete collapse of the organization.

9252             What would the downsizing or even the loss of FACTOR mean to us and to our constituents?

9253             In our written submission, we described our work in providing development initiatives to grassroots artists and other members of the Canadian music industry in every region of this country.  We are here to tell you today that our effectiveness is in large part directly attributable to the support that we have received from FACTOR.

9254             Our involvement with FACTOR began several years ago when, in an effort to increase its responsiveness to the needs of the independent music industry outside of central Canada, FACTOR instituted its National Advisory Board made up of representatives from our associations from coast to coast to coast.

9255             Through the NAB we were not only able to advise FACTOR on the effectiveness of its programs but we were also generously given time in our twice yearly meetings to work with one another to share insights on how to best serve and support music industry professionals who are geographically isolated from the centres of the Canadian music industry.

9256             Eventually, with FACTOR's help, we began to develop programs collaboratively, contributing jointly to the development of some initiatives and sharing resources whenever possible.  The results, as we have outlined in our written submission, have been remarkable and we are only beginning to realize our potential.

9257             The thousands of artists and service providers across the country who participate in our own development programs therefore owe much to FACTOR.  Add to these the huge number of artists and businesses who are direct beneficiaries of FACTOR funding programs and the impact of FACTOR on the independent music industry begins to become clear.

9258             This remarkable organization reaches into every corner of the country, across every genre of music, and serves artists and industry service providers alike.

9259             Each of our organizations receives support from FACTOR to assist us with our training and marketing initiatives and to assist us in developing the ANR Lounge and we also receive some small support in return for our service as regional affiliates of FACTOR.  Such a partnership is critical to our own work in the grassroots development of the industry.

9260             Let me give you an example of the kind of grassroots development that we are talking about.

9261             Two years ago, my own organization launched the country's very first Aboriginal music program and hired a full‑time Aboriginal music program coordinator.

9262             The program engages in significant outreach, liaising with Aboriginal artists, promoting their work, connecting them to key players in the mainstream industry and assisting in the development of the niche market for Aboriginal music.

9263             We engage in constant one‑on‑one consultation with Aboriginal artists, developing training seminars, national and international showcases, marketing material and we offer travel support.

9264             We are proud to note that one month ago we launched aboriginalmusic.ca, a full service website that showcases Aboriginal artists from Manitoba.

9265             The program also included a week‑long national Aboriginal music retreat with artists participating from nearly every region of the country.

9266             Not only did FACTOR support aspects of this work financially but FACTOR's continued sponsorship of our network of associations allows us to share information about this work with each other in a remarkably efficient way.

9267             As a result, provincial and territorial music industry associations will be promoting this year's upcoming national Aboriginal music retreat in their own regions.  In doing so, they will strengthen their own outreach to Aboriginal artists.

9268             In every way measurable, this program has been a success.  The artists who participate learn much about marketing, recording, touring, funding, performance skills and songwriting, and many have begun to achieve significant airplay on NCI Radio and other Aboriginal radio networks.

9269             Examples of this kind of imaginative programming abound in all of our associations but while we have achieved much in terms of grassroots development, our real goals are still far off.

9270             We have been working towards a fully integrated network of provincial and territorial association which can delivery a complete slate of services, providing information, communication, education, business development, market development, market access and industry outreach in each of our regions.

9271             At a time when our industry is experiencing tremendous pressure and radical change, those artists struggling to develop their careers beyond their respective regions require just this kind of intelligent support.

9272             It is clear to us that our goals are considerably tied to the ongoing support of FACTOR.  To put it bluntly, FACTOR gets it and is doing everything it can to help.  But we also know that under the current funding regime, FACTOR does not have the financial resources even to meet the basic needs of artists and industry professionals in our regions.

9273             Make no mistake, we constantly challenge FACTOR.  We constantly challenge FACTOR to increase its funding to grassroots development in our regions through its current programs dedicated to this purpose but we also understand FACTOR's dilemma, which is that its mandate is tremendously broad in scope.

9274             Through its 20 or more programs, FACTOR's financial support is felt by thousands of members of the Canadian independent music community, if not through direct project funding, then through its support of industry events, training programs, award shows, festivals, business development programs and on and on.

9275             The demands are tremendous and the money currently available is scarce.  And with every success FACTOR achieves, the demand for more resources increases significantly.

9276             Our own success as music industry development organizations is a case in point.  FACTOR helped us develop opportunities but those opportunities need to be supported in a real and meaningful way.

9277             It is for these reasons that we implore the Commission to continue with the current funding regime in Canada and not to jeopardize what FACTOR has achieved.

9278             What we need desperately is more money, more resources, not a rethinking of the model but a recognition that adequate funding is what will make the current model work exactly the way it is supposed to.

9279             I want to thank you so much for your time and I look forward to your questions.

9280             THE CHAIRPERSON:  Thank you, Mr. Baardman.

9281             Commissioner Pennefather.

9282             COMMISSIONER PENNEFATHER:  Thank you, Mr. Chairman.

9283             Good afternoon.  I wanted just to start ‑‑ now, you have actually added more information this afternoon.  It is very helpful to us to understand the role of the various provincial associations, which you say:  "Our real goals are still far off."

9284             MR. BAARDMAN:  Yes.

9285             COMMISSIONER PENNEFATHER:  This very good example you gave us of one of your programs, the Aboriginal music and all its aspects, can you give us an example, since you are here on behalf of the Coalition, of other programs, what kind of programs the provincial associations provide?

9286             MR. BAARDMAN:  Sure.  I think probably ‑‑ four years ago, the very first Music Industry Resource Centre was opened in our province ‑‑ now, there are four ‑‑ and the functions of the resource centre are probably quite present in virtually every association.

9287             Our resource centre has full‑time staff.  We have a ‑‑ since its inception, we have had more than 5,000 visits from independent artists and people working at the grassroots level.  We provide several different modes of training and professional development through the resource centre in terms of workshop series, seminars, short courses.

9288             One‑on‑one consultation is a really, really huge, huge part of what we do.  It is everything from what do I put in my media kit to I just made a record or I am thinking of making a record and I don't know what to do next, right up to some very sophisticated questions that come from people who have been at this for quite some time.

9289             One of the things that we strive to do is to make sure that there is adequate information within the resource centres for people to be able to access either virtually or in person.

9290             We have just set up a partners corner where we have partnered with 20 organizations regionally and nationally, the CMPA, the Music Managers Forum, the Songwriters Association of Canada, CIRPA, all the rest of it, where there is a conduit for their information to be made present in all of our associations, and all the associations are going to start to be establishing not just a kind of working relationship but also a constant information flow.

9291             So there is that kind of activity.

9292             In terms of the marketing activity, many of us now make it a regular part of our job to host showcases of our regional artists at national and international events and we support those showcases with marketing materials that we develop.  Some of us are lucky enough to have small funds where we can provide travel support, but our biggest job is to integrate all of this kind of support.

9293             Just to give you an example, several years ago we noted that none of our local labels, small, tiny, little local labels had any international presence and none of them were in a position to be able to access international markets, so we sourced funding to assist them in getting to MIDEM.

9294             But just getting these labels to MIDEM wouldn't have been enough for us, so what we did was we brought officials from the Canada Stand into Manitoba to talk with the people who were identified as ready to go to that event.  We also brought in another pre‑event to help those particular labels understand what they were going to do, and develop marketing materials for themselves.

9295             Then, once the event was over, we hosted another kind of post‑MIDEM event so that they could consolidate what they had learned, share what they learned with everybody and what kind of business they had done, and we continued to support those same companies in addition to others over a period of ‑‑ we just finished our fourth year.

9296             The thing is, that kind of integrate support ‑‑ you are not just giving them a travel fund and saying "Go to MIDEM.  Tell us how it was when you get back", but providing them with real solid information and giving them a forum and an opportunity to not only work individually but to work together and to work with us has been a really powerful model.

9297             I would just like to add another piece to that, and that is that when those companies hit that event they hit the ground running.  They were really on fire and some of them made some amazing things happen.

9298             COMMISSIONER PENNEFATHER:  Thank you very much.  That is very helpful.

9299             Your funding, you have made it clear, comes from FACTOR to some extent.  We will get back to that in a moment.

9300             Do you also get funding from broadcasters directly through local initiatives or other benefits or other types of CTD funding?

9301             MR. BAARDMAN:  I think three of our nine associations access direct contributions who have established relationships with their local broadcasters and some of them wouldn't be able to survive without that contribution.  It is tremendously appreciated.

9302             We basically try to access funding.  Most of us get a small operating grant from our local provincial governments through our departments of culture, or whatever it happens to be.  In our case, we get a single operating grant of $50,000.  Upon that operating grant rests hundreds of thousands of dollars of programming, depending on any given year what programs we are able to access.

9303             We try to access money across different levels of government and across different departments, from Industry, from Education and Training ‑‑ so from Industry Development, from Education and Training, from the Department of Canadian Heritage, from Culture, wherever we can find it, wherever it makes sense.

9304             COMMISSIONER PENNEFATHER:  You say in your written intervention that you:

"... would like to see a dedicated contribution of $2 million annually targeted specifically to provincial, territorial music industry associations."  (As read)

9305             MR. BAARDMAN:  Yes.

9306             COMMISSIONER PENNEFATHER:  I assumed that $2 million would be from FACTOR, but is it $2 million from all these sources and is it $2 million to each association?

9307             I wasn't clear.

9308             MR. BAARDMAN:  Oh, no, no.

9309             COMMISSIONER PENNEFATHER:  Could you explain that to me?

9310             MR. BAARDMAN:  Sure.  Absolutely.

9311             I think we had to pick a number and I think we were content to be generous.  We value the work we do of course.

9312             What we wanted to make sure was we are happy to have those funds administrated by FACTOR.  We have a great relationship with FACTOR and we know that there is kind of a really responsible relationship going in both directions.

9313             We know that any fund that is established has to serve every corner of the country.  We also know that once this network finally becomes completely established there will be a Music Industry Association in Ontario which is going to need tremendous resources to serve the grassroots industry.

9314             That is currently the biggest hole in the network.  There is no local provincial Music Industry Association that exists in Ontario, serving Ontario grassroots artists and others that exists.

9315             We also know that there is a new association coming online in Prince Edward Island.  There is even a new Music Industry Association coming online in the Northwest Territories called RAANT, which is the Recording Artists Association of the Northwest Territories.  Those people are already in discussion with a very mature and sophisticated Music Industry Association that operates out of the Yukon.  Obviously we have a strong collaborative relationship with those folks and we are always excited about what is going on out there.

9316             COMMISSIONER PENNEFATHER:  RAANT.

9317             MR. BAARDMAN:  RAANT, absolutely.

9318             COMMISSIONER PENNEFATHER:  You expressed your concern in your paper this afternoon regarding the CAB proposal, which you say would eliminate effectively CTD contributions to FACTOR and Musicaction.

9319             Have you been following the hearing this week?

9320             MR. BAARDMAN:  I followed the hearing on Monday and today,  I wasn't able to on Tuesday and Wednesday, so I'm assuming there have been some developments?

9321             COMMISSIONER PENNEFATHER:  I think there was certainly a commitment or a proposal from, for example, Rogers and Standard in terms of a guarantee, while the funds would all come from Starmaker Fund there is a proposal to guarantee a certain amount of funding, $1.8 million in fact, which is, as you know, under the policy, the CAB plan, to FACTOR/Musicaction.

9322             Do you want to comment on that?

9323             MR. BAARDMAN:  Sure.  I have a couple of comments.

9324             One is, that is significantly less money than needed.  I will just leave it as bluntly as that.

9325             The second comment that I have to make is that in our original proposal we made a really strong statement about who we believe should be in control of CTD contributions.  We believe that it represents a transfer of capital from industry to another.