Cannot rely on market forces to ensure Canadian content, witnesses tell industry committee

OTTAWA—What started as an ideological debate about foreign ownership turned emotional Thursday as groups representing Canada’s broadcasting artists went head-to-head with Tory members of the Commons industry committee. “You’re not listening to what we’re telling you,” an apparently frustrated Alain Pineau, national director of the Canadian Conference of the Arts, told Mike Lake, Conservative MP and parliamentary secretary to Industry Minister Tony Clement. But throughout the meeting, Lake maintained that, “We can protect culture in broadcasting using the laws that we have.” Pineau and other witnesses, who appeared before the industry committee Thursday morning for its study on liberalizing Canada's foreign ownership restrictions, said increased vertical integration in Canada’s telecommunication industry means that opening the sector to foreign ownership would have a marked effect on the broadcasting sector. “It has long been recognized in this country that market forces alone are insufficient to ensure that we have access to a reasonable supply of high quality Canadian choices in every medium,” Pineau told the committee. “We need to have public policies and regulations to achieve these objectives.” But Lake said loosening the foreign ownership restrictions in the telecom sector would be good for consumers. “Canada, among developed countries, is going to come out of the slowdown in the most competitive position,” he said, resulting from Canada’s openness to global trade. “It’s not different in telecommunications,” Lake said. “We can’t short-change our consumers, and our consumers are being short-changed under the rules as they stand right now.” The Conservative government has committed to opening up Canada’s foreign ownership restrictions for the telecommunications sector. Industry Minister Tony Clement told The Wire Report last month that the government is determining the scope of consultations on the matter. Peter Murdoch, vice-president of media with the Communications, Energy and Paperworkers Union of Canada, told the committee that opening the foreign ownership restrictions in the telecommunications industry will adversely affect Canada’s unique cultural voice—particularly through its impact on the news media. “If we start to allow foreign investment to shape the kind of coverage , we’ll find ourselves in serious trouble,” he said. Solange Drouin, vice-president and executive director of public affairs with the Association québécoise de l'industrie du disque, du spectacle et de la video (ADISQ), told committee members that foreign investors will quickly pounce on Canada’s cultural industries if the government opens the doors to foreign investment. “They want all the market, and they will take it,” Drouin said. She said the argument that the government could regulate foreign companies once they entere the market is a “little bit naïve.” Drouin pointed to American satellite radio companies Sirius and XM, which she said convinced the CRTC to allow the use of foreign-owned satellites to broadcast their content in Canada. But most of the bandwidth on the satellites was being used to broadcast American content, so the CRTC could not impose Canadian content quotas for terrestrial radio stations, she said. While Quebec terrestrial stations must air 65 per cent Francophone content, Sirius and XM got away with a 10 per cent Francophone requirement. “The company’s ended up with ridiculously small amounts of Francophone content because of the decision,” Drouin said. Ferne Downey, president of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), told the committee Thursday that it would be a mistake for the government to relax foreign ownership rules in the telecommunications industry without thinking of the negative impact it could have on Canadian culture. “We believe that Canadian voices are worth hearing, sharing, and celebrating,” Downey said. Thursday’s committee hearing came on the heels of new report titled “Canadian Telecommunications and Cable Markets,” by industry research firm Moody’s, which said that Canadian cable and telecommunications companies will offer increasingly similar services over the next five years. Telecom services like voice, Internet, and video will increasingly bundle and have impacts on the wireless market. “Service providers will become more homogenous as their capabilities converge,” Bill Wolfe, vice-president and senior credit officer at Moody’s, said in a release. On March 25, Industry Canada officials told the Commons industry committee that Canada has the most strict foreign ownership restrictions among Organisation for Economic Co-operation and Development (OECD) countries. jmigneault@thewirereport.ca

Cannot rely on market forces to ensure Canadian content, witnesses tell industry committee

News | 04/01/2010 7:24 pm EDT

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