(PLEASE CHECK AGAINST DELIVERY)
This speech was pronounced on November 30, 2012
Good afternoon Mr. Chairman, Vice-Chairman, Commissioners, staff.
My name is Steven Guiton and I am Vice-President and Chief Regulatory Officer at CBC/Radio-Canada. With me today, on my right are:
Hubert T. Lacroix, President and CEO of CBC/Radio-Canada
Louis Lalande, Executive Vice-President, French Services
Marie-Philippe Bouchard, Executive Director, Strategic Planning
Patricia Pleszczynska, Executive Director, Regional Services
And on my left:
Kirstine Stewart, Executive Vice-President, English Services
Christine Wilson, Executive Director, Content Planning
Jennifer McGuire, General Manager and Editor in Chief, CBC News and Centres.
And on the back panel we have:
Neil McEneaney, General Manager, Finance and Strategy
Chris Boyce, Executive Director, Radio and Audio
Bev Kirshenblatt, Senior Director, Regulatory Affairs
Stan Staple, Senior Director, Research and Strategic Analysis
Debra McLaughlin, President, Strategic Inc.
Jean Mongeau, Executive Director, Revenue Group
Michel Cormier, Executive Director, News and Current Affairs
Mr. Chairman, our reply today has three main parts.
Hubert will address several corporate issues which have been the focus of interveners’ comments and Commission questions.
Louis will then talk to French Services topics.
Kirstine will discuss English Services topics.
I will now turn it over to Hubert.
Hubert T. Lacroix:
Good afternoon everyone.
This has been a long two-week process. We thank you for your patience. We thank you for your questions and interest in establishing the regulatory framework that will allow the national public broadcaster to provide Canadians with a wide range of programming which seeks to inform, enlighten and entertain.
I would also take this opportunity, Mr. Chairman, to thank everyone who took time to appear in front of the CRTC to express their opinions and provide their recommendations.
Like you, we have listened intently to all of these presentations.
Interestingly, we often heard interveners trying to convince you that their vested interest was more important than the next one or the one before, and that if we needed to make a choice about a service to be curtailed or dropped, or a genre of programming to be affected, it was alright to make it, as long as it wasn’t in their own backyard. Everyone wanted to pull on their piece of the blanket.
Most interveners wanted us to do more: more Canadian programs more documentaries, more original programs, more children's programming, more regional reflection of their interests, et cetera, et cetera. The list of "asks" is long and detailed.
I found it encouraging to hear members of the Panel point interveners towards the trade-offs that the public broadcaster is charged with balancing; for example, between those who want to be more informed and those who want to be entertained, those who want to favour regional expression and those who want more space for national content.
Like you, we know with some precision what role CBC/Radio-Canada has to play in the media landscape. The Broadcasting Act still tells us that. What we do not know precisely is by what vehicles and with what tools we will achieve those balances during the next licence term. And that is why we have resisted, and we continue to resist, the kind of granular conditions of license that some interveners are still looking for.
And it is why we have asked for enough flexibility, both on the content and platform side, for us to be able to serve Canadians adequately and successfully as citizens, consumers and creators while meeting our obligations under the Act.
We think it's quite telling that not one of the major private broadcasters – not Bell Media, not Quebecor, not Rogers - is opposed the idea that the public broadcaster requires such flexibility. And we are pleased that Shaw has supported our argument.
A limited number of significant, high level commitments with respect to key objectives - backed by reporting as necessary – we feel that what is required.
On that point, we heard the Chairman last Friday when he suggested a high level condition of licence to ensure balance in our television schedules. We have no problem with that suggestion and we are providing you with suggested wording.
And, as the Chairman has noted, on more than one occasion during this hearing, there are other mechanisms in place which serve to ensure that a wide range of high quality programming is provided. Access to the CMF alone is a major driver, and obviously serving our audiences is our most important driver.
In the same vein, we appreciated many of the interveners' enthusiasm for our content and, in a few moments, Louis and Kirstine will outline what modifications we are suggesting today to our initial proposals for our conditions of licence for the next five years. We hope that you will see from these modifications and from our initial commitments a serious and credible attempt to reconcile all of these demands with our mandate and our economic reality.
Before I turn it over to Louis and Kirstine for topics specific to their respective media lines, I want to comment on three fundamental issues for us: (i) Terms of Trade; (ii) Ads on radio; and (iii) our Ombudsman process.
1. Terms of Trade
Let's start with Terms of Trade.
As we emphasized last week, and with the greatest of respect, this is a commercial matter to be resolved between two organizations and our Corporation, and we do not believe that the CRTC should be intervening in these negotiations nor has the jurisdiction to impose an agreement on us. In that same way, we are of the opinion that the CRTC can't require us to conclude a Terms of Trade agreement as a condition of licence.
We understand and recognize that an acceptable Terms of Trade agreement with the CMPA and the APFTQ would be useful for both sides as it would lessen the time spent negotiating individual contracts with individual independent producers. But these agreements must make commercial sense for us, and we will not simply accept Terms of Trade negotiated for other parties and tailored to their particular needs.
We believe that, if all parties continue to negotiate in good faith, an agreement will eventually be reached. In the meantime, we at CBC Television and Radio-Canada will continue to make deals with independent producers.
Before I leave this point, Mr. Chairman, I need to say a few words about the intervention of the APFTQ.
I’d like to correct a very important point of fact. During a discussion you had with the APFTQ, the association claimed there were chain-of-title issues associated with digital uses of television productions. This is inaccurate. Radio-Canada owns all necessary rights for its current use of TV productions on its TOU.TV platform, as well as on the partner platforms of BDUs or pure players like iTunes or Netflix.
2. Our applications for Ads on Espace Musique and Radio2
a) Financial Situation
Let's now turn to ads on radio and let's start with our financial situation, which was the trigger point for this application.
The CAB Panel said that we presented “no compelling financial evidence” that we need this revenue and that the crisis we are in is really what they called “bookkeeping sleight of hand”. The financial crisis facing the Corporation is real and has been demonstrated. This is not about bookkeeping. Our financial situation has been well documented, and is very, very public.
b) Nature of the service
Some interveners suggested that, if you let us advertise on these two networks, we will be prone to programming according to the desires of our advertisers. This is false. We have industry leading Canadian content commitments in both Radio 2 and Espace Musique, and, during the course of this hearing, we have agreed to take on new commitments.
c) Private and community broadcasters
The private broadcasters and community broadcasters came in and said that CBC might take some advertising revenues from the stations they own.
Well you heard Debra McLaughlin explain how we built our revenue models from both the ground up, and the top down, for two radio services that already exist. We have done what the Commission would have expected a new applicant to do – use well-recognized, established methods to support our applications.
Finally, I would like to respond to three more arguments we heard on this particular issue.
First, we have attached a chart, at Appendix A, showing the impact of Commission licensing in each of Vancouver, Edmonton, Calgary, Halifax, Quebec and Ottawa-Gatineau. In each case, the effect of a new station was stimulative, even through the recession. The idea that advertising is a zero sum game and that we would simply take revenues at the expense of existing radio stations is not correct.
Second, there was much concern expressed about the plight of smaller market stations. These stations derive up to 95% of their revenues from local advertising. These revenues will remain untouched.
Third, it was suggested that sell-out rates seem low for a station already in the market. The implicit suggestion is that one can instantly convince advertisers to come aboard and, at the same time, not lose any listeners. Yet, some actually said that their surveys indicate that the number one reason why people listen to Espace Musique and Radio 2 is because they don’t have advertisements. Yet still, the privates estimate that we will double our projected revenues. This is not credible.
And, please remember that through all of this noise we are targeting about 1% of all ad revenues in the radio market in this country. One percent.
Finally, we note that the Commission has asked several interveners whether a phased-in approach for such advertising would be appropriate. We heard that.
So, we are prepared, Mr. Chairman, to accept the following phased in approach for the addition of national advertising to Radio 2 and Espace Musique: (i) a weekly average of 5 minutes per hour in Year 1, (ii) 7 minutes in Year 2, (iii) 9 minutes in Year 3, and (iv) no restrictions from Year 4 and beyond.
In our view, while not ideal, this revised proposal addresses perceived concerns respecting the impact of a new national advertiser in the marketplace and will allow all radio broadcasters sufficient time to adjust accordingly.
3. Ombudsman process
My last comments will be around our Ombudsman, actually a timely conversation as we announced on Wednesday the appointment of Esther Enkin to that position for English Services.
During the hearing, there was a lot of discussion as to whether we should expand the scope of our Ombudsman's jurisdiction so as to include all programming matters, not just journalistic issues. At the beginning of the hearing, we expressed our concern that this type of modification would not be feasible. We have not changed our mind on this issue.
Duplicating the CBSC but solely for CBC/Radio-Canada is not viable.
We have two concerns: cost and practicality.
On the cost point, we believe the cost of duplicating the CBSC structure would be significant. However, the expenses go well beyond the infrastructure element to put in place, such as structure at CBC/Radio-Canada.
As you know, the CBSC membership base includes all private broadcasters. These companies provide both financial and volunteer support for the CBSC. In particular, CBSC operates on a volunteer basis for its assessment panels, drawing on personnel from its member companies when a complaint requires education. That route would not be available to CBC/Radio-Canada. We would have to retain outsiders. Setting up and compensating assessment panels would become very expensive.
That brings me to the second point - practicality. Who would actually be adjudicators on this panel?
The CBSC has already told us that they don't want the Corporation to be a member. So, we would have to hire our own outside counsel and consultants. Would that be viewed as acceptable?
I suggest to you that the only logical adjudicator is the Commission itself. The Commission has the jurisdiction and the obligation under the Broadcasting Act to deal with these matters.
I know that you might not like this conclusion, but we think this is the only conclusion which is practical and fair.
I will turn it over to Louis to discuss the topics relevant to French Services.
Thank you, Hubert.
Large numbers of Canadians from all parts of the country have expressed their affection and enthusiasm for Radio-Canada, as well as – it must be said – their very high expectations and, at times, their frustrations at the limited resources we have to meet them.
My team and I were very attentive throughout the discussions that took place before you. There are therefore five issues I’d like to revisit: 1) imposing minimum expenditure levels for television, including for independent production outside Quebec; 2) children’s programming; 3) reflection programming and local production in Windsor; 4) regional reflection and the reflection of OLMCs in network programming; and 5) the proposed conditions of licence for ARTV and its national distribution.
1. Proposals for Minimum Expenditure Levels for Télévision de Radio-Canada
a) Programs of National Interest
Let’s start with the proposal to impose minimum expenditure levels on Radio-Canada for programs of national interest.
The APFTQ suggested that, instead of a requirement based on broadcast hours, Télévision de Radio-Canada’s conditions of licence for Programs of National Interest and Canadian content should be expressed in terms of minimum expenditure levels and that the threshold be established on the basis of average expenditures over the past three years. We disagree with this suggestion.
During the licence renewal process for the major English-language groups, the Commission itself stated that expenditure requirements were not appropriate for CBC/Radio-Canada.
In addition, given recent budget cuts and the loss of the LPIF, it makes no sense to impose an expenditure requirement based on budgets that we no longer have.
The approach based on commitments expressed in terms of broadcast hours remains the most appropriate one.
b) Independent Production Outside Quebec
Let’s now look at independent productions outside Quebec.
For its part, the APFC called for a condition of licence dealing with expenditures on independent productions outside Quebec and wants to negotiate an agreement with Radio-Canada guaranteeing its members a percentage of Télévision de Radio-Canada spending on independent productions.
Through these measures, the APFC hopes to maintain the business volume that had been enabled by the LPIF. Unfortunately, this is simply not possible without the LPIF contribution, and even less so in the context of cuts to our parliamentary appropriation. That said, we reiterate our intention to continue acquiring programs from independent producers outside Quebec – including those established outside Quebec but who aren’t Association members, because we don’t want to exclude anyone. We will do so as far as our means allow and based on our programming priorities. The CMF’s outside-Quebec program is an effective incentive mechanism, by the way, and we will continue relying on it.
2. Children’s Programming
Let’s now move on to children’s programming.
The continued presence of children’s programming on Radio-Canada was discussed extensively during the hearing. At the Commission’s request, we drafted and filed a document that presents our assessment of the needs of the various youth audience segments and our strategies for reaching them on our multiple platforms, based on the specific characteristics of each media line.
This led to our developing a new proposed condition of licence for our main television network, which we hope strikes the right balance between children’s needs, the role of other players in the broadcasting ecosystem, and the public broadcaster’s particular opportunities and constraints. Over and above the commitment to broadcast an average of 10 hours per week of Canadian programs for viewers under 12 years old on Télévision de Radio-Canada, with at least 75% of those hours being allocated to independent productions, we propose committing to air a minimum of 100 hours per year of original Canadian programs, based on broader parameters that allow for co-broadcasts, such as in the case of Toc toc toc, which is broadcast jointly with Télé-Québec.
3. Reflection Programming and Local Production in Windsor
Now on to reflection programming and local production in Windsor.
For radio, you suggested a condition of licence for local production in Windsor. In our discussions with the community, we always said that we would take every opportunity to try to improve the level of local service. We managed – despite the challenging financial context – to increase the volume of local production to 7.5 hours this year and will endeavour to provide the community with 10 hours of local production per week starting in September 2013.
As a result, we would accept a condition of licence requiring 10 hours of local production aired locally on our Windsor Première Chaîne station.
4. Regional Reflection and Reflection of OLMCs on the National Network
I’d now like to discuss regional reflection and reflection of OLMCs on the national network.
Over the past two weeks, a recurring theme was the fear of programming becoming too Montreal-centric and the importance that the national network adequately reflect regional realities. In our quest for flexibility, we never wanted to diminish the presence of regional production on our TV network. We heard the concerns of interveners from all parts of the country and we are now willing to commit via condition of licence to ensuring that network programming contains at least 5 hours per week, averaged over the broadcast year, of programming produced outside Montreal. In the current financial context, we feel that this condition of licence is an important guarantee.
With regard to the many intervener requests that quotas be set to ensure that OLMCs are reflected on the network, the discussions that the Commission had with francophone community representatives, including the president of the SNA, clearly demonstrated that using quotas to capture such a complex reality is hard to define in regulatory terms. Everything is subject to interpretation. Radio-Canada is aware of the scope of its mandate and the clear dissatisfaction expressed by the groups representing OLMCs, who nonetheless mentioned their strong attachment to Radio-Canada and the essential nature of its services.
We proposed a condition of licence for Programs of National Interest, under which we will report on the origin of programs and the reflection of OLMCs. We feel this provides an effective regulatory foundation that will increase pressure on all production and decision-making teams, and ensure the level of transparency sought by the groups that appeared before you.
The exercise is even more fraught with difficulty when it comes to news. The Fédération professionnelle des journalistes du Québec and the Commissioner of Official Languages – an Anglo-Quebecer and former journalist who could not be suspected of being insensitive to OLMC expectations – told you that it was a bad idea, and could even be dangerous, to impose quotas on newscasts based on territory, subject matter or any other non-journalistic criterion. A news organization that produces newscasts based on quotas is simply not credible.
We are, however, capable of tracking the origin of segments aired on the Téléjournal and, although it doesn’t provide a fully comprehensive picture of reflection, it’s surely a metric that we can track and share with the Commission.
That said, we can and should do better so that French-speaking Canadians across the country feel at home when tuning into our networks. Issues of accountability and consultation were discussed at length over the hearing’s two weeks. To improve the situation perceived by communities, we propose holding public meetings every two years in official-language minority regions. We’ll take this opportunity to present our regional initiatives and what concrete steps we’ve taken to reflect regions on the network, as well as hear what communities have to say and propose. These town-hall-style meetings will be open to associations and all residents of OLMCs.
5. Proposed Conditions for ARTV
I’ll end off with ARTV.
For ARTV, the APFTQ proposed minimum expenditure levels for independently produced Canadian programs and first-run original Canadian productions, based on the previous year’s revenues.
All of the APFTQ’s calculations are based on a false premise: in both its brief and at the hearing, the Association concluded that ARTV didn’t produce a single program in-house and that it didn’t air a single original first-run Canadian program from a producer associated with it. Yet, since its inception, ARTV has produced – and continues to produce – a number of original, first-run Canadian programs in-house. These original Canadian productions don’t have access to production funds or tax credits – ARTV absorbs the costs on its own. They therefore account for a substantial percentage of the channel’s Canadian programming expenditures, contrary to what the APFTQ claimed to you. Given that all of the APFTQ’s proposed conditions of licence for ARTV stem from this false premise, we urge the Commission to reject them.
For their part, the FCCF and APFC claim a greater share of ARTV’s independent production expenditures for APFC members. We disagree. ARTV voluntarily offered to increase Canadian programming expenditures to 50% of its revenues last year and to triple its commitment to acquiring independent productions from outside Quebec, raising the minimum annual amount to $600,000. These commitments are extraordinary for a Category A specialty service. ARTV set them at these levels, confident that it could achieve them each year. It will strive to exceed them if revenues permit and it receives quality proposals meeting the needs of its subscribers.
Finally, with regard to ARTV’s distribution, last week Shaw argued before you that a 9(1)h order “light” – as you dubbed it – wasn’t necessary to ensure ARTV’s availability in OLMCs.
Shaw stated that the current 1 for 10 rule was sufficient and that Shaw Cable distributed ARTV in three-quarters of its systems.
This is inaccurate. According to Mediastats data from June 2012, Shaw Cable operates 38 Class 1 systems in Canada. Yet only 15 systems, or less than half of its Class 1 systems, offered ARTV.
What is more interesting to look at is ARTV’s availability across Shaw Cable’s subscriber base and its territorial distribution. Thus, as we stated to you during our appearance, Shaw Cable doesn’t offer ARTV on any of its systems – regardless of class – in Manitoba and Saskatchewan. For the Winnipeg area alone, ARTV not being available in this market deprives 138,000 Shaw subscribers of this service. It’s worth recalling that ARTV airs programming produced out of Winnipeg. All in all, according to the same Mediastats figures from June 2012, 74% of Shaw Cable systems actually do not carry ARTV. Our own surveys confirm that nearly 800,000 Shaw subscribers cannot access ARTV.
Shaw maintains that it’s adhering to the 1 for 10 rule and that when ARTV isn’t available, another French-language specialty channel is offered instead. By leaving the choice of French-language channels to distributors’ sole discretion, the Commission can see for itself that Shaw, on its own admission, gave preference to the category B channels, Yoopa and Teletoon Retro French, whose Canadian content requirements are low and contain no reflection of OLMCs. ARTV contributes significantly to Broadcasting Act objectives, with Canadian programming expenditures amounting to 50% of its revenues, 60% Canadian content, substantial regional production outside Quebec, and a conscious effort to promote a shared national identity and awareness from coast to coast through arts and culture. ARTV should be among the services that all Canadian subscribers can choose.
I will now turn it over to Kirstine.
Nice to see you again today.
There have been many topics raised over the past two weeks, I have six that I would like to speak to today: 1) Radio 2’s support for Canadian emerging artists; 2) children’s programming; 3) followed by sports programming; 4) then local programming on CBC Television; 5) CBC’s commitment to documentaries; and 6) programs of national interest on CBC Television
Before starting, I would like to remind the room of something we discussed earlier. CBC is committed to great Canadian programming and content, both video and audio. You can see from the television grid that you have at the back of this presentation – what we call the Red Schedule - how much we believe in the power of Canadian content, and our record breaking successes of recent seasons illustrate the connection Canadians have with great Canadian content on CBC. While we want to maintain this momentum, we did get cut at the worst possible time to maintain this upward trajectory.
Many interveners spoke of status quo. But CBC doesn't have funding status quo. And while strategies and talent are still there to maintain a great television and radio schedule, our linear 24 clock, and our finances, limit us. We are juggling that Rubik's cube on a wakeboard trying to give Canadians what they've told us, with their words, their clickers and their dials, they want the CBC to deliver to them. So we work together with the CRTC to keep our promise in serving Canadians.
I want to first address the Radio 2 discussions, and then move to the television interventions.
1. Emerging Canadian Artists
Turning to Radio, there has been a great deal of discussion respecting the potential addition of national advertising to Radio 2 but while the discussions were focused on the financial aspects of our request, they didn't address the Canadian content, artist and program distinctiveness these services provide. Radio 2 is dedicated to the support of Canadian artists. We set the standard.
To reinforce and widen our leadership position in the Canadian music industry, CBC is prepared today to further increase our commitment to Canadian emerging artists to 40% of Category 2 music broadcast on Radio 2. This means that 1 in 5 Category 2 musical selections broadcast on Radio 2 will be an emerging Canadian artist. From coast to coast, Canadians will be able to hear new and exciting Canadian musicians, who would not get the same national airplay on other conventional network in the country. However, we would not be able to maintain the same service on Radio 2 that we have today without change that we have requested, as I'm sure Chris Boyce made clear last week in our presentation.
2. Children's Programming
Turning to children's programming, there was a lot said about children's programming during the hearing. As we explained, CBC Television has made a major commitment to programming for preschool children. Creating an all-Canadian, commercial free learning environment for this vulnerable age group, we felt was an important role for a public broadcaster. When asked by the Chairman if he had to choose which group he would target, I was pleased to hear Mr. Moss of the Youth Media Alliance respond – “I believe that preschool audiences are the greatest investment,” because that is the conclusion we have also reached.
Of course, we understand our role in reaching Canadian children of all ages, and just wish to remind the Commission of our current range of school aged children programming.
In addition to our weekday morning kids’ block - CBC also offers a commercial free Saturday morning block for kids aged 8-12. These shows set themselves apart from the regular comedies and sometimes violent shows and animation on other Canadian networks. Our online engagement, for which we have won international awards adds to the school aged children's relationship with programming on the CBC.
Some interveners have suggested that we should also be required to commit to a minimum level of original programming and independent production. As much as we would like to address their suggestions of 10 hours of original weekly programming, this would require an additional investment of approximately $52M, funds we do not have.
Despite these challenges, children's television is a priority in our plans and CBC is prepared to commit to the same condition for children’s programming currently in place: 15 hours weekly with a minimum of one hour of original programming. We also commit to an annual 75% independent production requirement for that children’s programming.
Children's programming is a CBC success story. Parents and their kids love the service that we provide, and we hope that this commitment will alleviate concerns that we will exit the children's programming genre, and ensure that, going forward, we provide at least the same service that we are providing today.
3. Sports Programming
Now I would like to turn to sports programming.
It is very important to have all of the facts regarding sports programming on CBC. In the past two weeks a lot was said, and much of it was incorrect, so I want to remind everybody of the facts:
These facts are to show that sports programming does not comprise a disproportionate amount of our broadcast schedule. CBC focuses on sports properties of interest to Canadians to further nation-building and bring Canadians together, and our focus is the same regardless of the outcome of our NHL contract renewal in two years, and we will continue make great Canadian programming of interest to Canadians.
4. Local Programming
Next, local programming.
We proposed a 7 and 14 hour per week commitment for local programming for CBC Television depending on the size of the market. We believe this is a serious commitment, complimenting our network programming. But the Commission and some interveners asked if we could do more. In particular, it had been suggested that CBC Television should commit to doing more non-news local programming.
Our local programming infrastructure is primarily News. This serves audience needs for local news and information it is also a cost effective expansion opportunity in light of our financial challenges. But we are prepared to commit to one hour a week of non news programming in the six 14 hour markets.
Unfortunately, we cannot go further than this. An elevated requirement beyond this would be problematic financially and would put an end to our expansion plans to reach out to under served markets and we do not think that is a net benefit to Canadians.
Also as a reminder, we did amend our local programming commitment last week to allow it to be measured on a weekly basis with basic exceptions for things like live sports and statutory holidays. This is our proposal to help satisfy the Commission that we will continue to provide local content of interest to Canadians on a consistent basis.
I would like to address two brief but important points.
On CBC Television, our schedule makes it clear that CBC Television is deeply committed to documentaries. We are the only conventional television service that airs two hours of documentary programming in prime time on a weekly basis. Through budget cuts, we preserved this place for documentaries in the schedule, and as you heard last week from Mark Starowicz, we have definitely not abandoned Documentaries
There were two comments made about CBC's promotional support of documentaries, and documentary rating performance against drama programming, both of which I need to quickly address.
Interveners mentioned that they counted only 3 minutes of promotion, whereas a quick check with our communications department shows a weekly average ten times, or more than 30 minutes of promotional support of our documentary strands. And in addition to the on-air promotion, documentaries are supported by publicity, digital media and paid media. And while it may be a new episode of “Doc Zone” outperformed a repeat episode of “Republic of Doyle”, averages 320,000 Canadians weekly. Ratings of course are not the only measure of value, but it is important we speak factually about the realities of relative performance.
So that we can continue to maintain the balance of schedule time to showcase a broad range of interests and within our financial constraints, we cannot accept The Documentary Organization of Canada’s proposal of 4 hours weekly, including 50% original programming and 75% independent production.
On the Documentary Channel, with regards to the changes we have proposed to conditions of licence, they were a reflection of the changes that the Commission invited every Category A service to apply for.
I want to note that the Documentary Channel has not become a dumping ground for CBC documentaries; only 9% of its schedule consists of documentaries aired on the network.
The Documentary Organization of Canada requested that Documentary accept, as a condition of licence, a requirement to allocate 75% of its first-run original programming to Canadian independent producers. This is in line with our priorities and we are ready to accept this condition of licence.
Lastly, I want to talk about PNI, programs of national interest.
We have proposed 7 hours of PNI per week with 75% of that being independent production and with a minimum of 1 hour of drama and 1 hour of documentary. We believe that this is a very serious commitment. Some organizations have argued for larger commitments. More independent production means more work for their constituents, but interestingly, can have the unfortunate effect of pitting one genre against another, which I believe we heard in the Doc Associations' presentation when they incorrectly positioned themselves as more effective in reaching audiences than our drama programs like “Republic of Doyle”.
We struggle to maintain a balance in light of recent cuts to our budget starting with the impact of the 2009 global recession and most recently the DRAP cuts and loss of LPIF. Most of these cuts were to TV and it makes it difficult to accept obligations based on historical levels of performance, as we no longer have access to our historical level of funding.
A substantially higher PNI commitment does not work with our schedule where Canadians also want to see news, current affairs and other programming. PNI programming is some of the most expensive programming to produce. Any increase of our PNI commitment would add millions in programming costs, money that we simply do not have, unless we look to news, kids and other areas to take from.
We understand the desire of interveners to have more of everything – more drama, more documentaries and so on. We appreciate their passion for Canadian programming because we share it. We have listened carefully to the presentations of interveners over the past two weeks as well as the questions from Commissioners and we’re willing to step up.
As proposed before, CBC commits to providing an average of 7 hours of PNI weekly of which; 75 percent will be independently produced.
We heard the concerns of interveners who took issue with the 7 hours of PNI as being too low, given our relevant recent performance. However, this is a reminder that the status quo does not survive the drastic cuts we have been subjected to. But we agree that PNI represents genres important for CBC to reflect to Canadians.
To that end we commit to an additional 2 hours weekly of PNI genre material, but to be clear these hours would not be subject to the same formula as mentioned for the 7 hours of PNI. Due to the genres' relative expense and our issues with funding we would require flexibility with these additional hours of PNI commitment.
The Commission has asked for more and we have delivered. In our view, this is hopefully what you consider to be a fair and balanced commitment that fulfills our mandate to serve Canadians.
There are serious financial implications for the types of commitments proposed by interveners. We understand their position, it is their responsibility and job to represent their constituents’ interest. As I said in my opening remarks, I wish we had the ability to fund all the wishes of all those who took the time to appear. But CBC faces a finite 24 hour broadcast day and a financial reality which forced the layoffs of 650 CBC employees and managers, and the cancellation of 175 hours of programming. We are heartened that Canadians have turned to Canadian content, on our and other broadcasters' networks in a meaningful way these past seasons. And we humbly believe that the breadth and depth of Canadian content available on CBC has helped move the needle for the entire industry. One only has to look at the (red schedule) to see CBC's commitment. One only has to listen to our radio services' coverage of everything from Canadian issues to Canadian artists to know we understand what people expect from us. We look forward to continuing to serve them, with the resources we have and the best that we can.