The Honourable Aileen Carroll
Minister of Culture
Government of Ontario

at the

CRTC BDU & Discretionary Services Public Hearing 

Gatineau, QC
April 22, 2008

Good morning. I would like to thank the Commission for this opportunity to appear.

I am pleased to be here with the Ontario Media Development Corporation—the OMDC. The OMDC, an agency of the Ministry of Culture, is dedicated to supporting the outstanding work of Ontario’s cultural media industries.

Joining me today are:
Kevin Shea, Chair of the Board of the OMDC
Steven Davidson, Assistant Deputy Minister of Culture, and
Karen Thorne-Stone, President and Chief Executive Officer of the OMDC.

I am here today, as Ontario’s Minister of Culture, to work with the Commission in our shared role as guardians and makers of public policy.

I urge the Commission to reinforce a regulatory framework that continues to position Ontario’s and Canada’s cultural industries as leaders—and long-term players—in the global, knowledge-based economy.

Cultural industries are being challenged by constant technological change and evolving business models. In this environment of change, the creation and distribution of uniquely Canadian content is more relevant than ever before.

The ability of our cultural industries to compete internationally depends on the tenacity and foresight of the Commission to uphold the public policy articulated in the Broadcasting Act.

Nurturing the growth of the cultural industries, and helping them maximize their potential to innovate and to compete internationally, is a major and personal priority for me.  

Creativity and innovation are the new raw materials for economic prosperity.

Ontario’s culture sector generated $19.7 billion to Ontario’s GDP in 2003.

Ontario is home to the largest number of Canada’s cultural industries. Our cultural industries sector is the third largest in North America by employment after California and New York.

Forty-three per cent of Canada’s total workforce in the cultural industries works in Ontario.

Between 1999 and 2007, Ontario’s entertainment and creative industries created over 80,000 net new jobs in Ontario. This is an increase of almost 40 per cent compared with 17 per cent in the overall Ontario economy.

The Ontario Ministry of Finance has identified the entertainment and creative industries as one of the key economic sectors expected to grow faster than the rest of the economy over the next two decades.

Ontario is the economic engine of independent production in Canada. Canada’s independent production companies are market leaders in all forms of entertainment, media, and cultural products.

They have built a global reputation for excellence in animation, drama, documentary, children’s television programming, games, and interactive media. 

You can see why the continued growth of this sector of our economy is a major concern of mine.

The Ontario Government understands the enormous competitive advantage that cultural industries give us in the global economy where intellectual property is high stakes.

That is why we are promoting a culture of innovation across the province.

In the last six months, the Ontario Government has announced new initiatives that will deliver over $100 million a year in additional support to the cultural industries over the next three years.

My ministry has developed an ambitious agenda to promote the development of Ontario’s cultural media sector.

Our “Entertainment and Creative Cluster Strategy” reinforces the objectives of the Broadcasting Act by fostering successful firms that contribute high-quality creative content to Canada’s broadcasting system.

Our strategy champions the creation and retention of Ontario-owned intellectual property. It encourages collaboration, through pooling resources, knowledge and innovation, to help firms increase their competitive advantage.

Cluster companies that can adapt to emerging technologies and business models, and produce marketable slates of quality programming and content — intellectual property that they own and control — will be better able to reinvest in their own growth.

And it is more important then ever that we have a regulatory system that supports the creation of quality content by making a place for our producers and creators on the airwaves and through every new digital channel.

The Broadcasting Act gave rise to a Canadian creative industry of cultural and economic importance. There is still a pressing need to nurture this sector.

The CRTC’s regulatory framework has fostered an innovative pay and specialty sector marked by a diversity of popular brands that rival the best foreign programming.

The collaboration between Ontario’s independent production and creative community and the pay and specialty services sector has resulted in long lasting benefits to Ontario’s economy and to the Canadian broadcasting system.

The pay and specialty sector and the broadcasting distribution sector have found a winning strategy that attracts the vast majority of television audiences in Canada. Many have achieved success internationally.

Continuing to strike the right balance between market forces and Canadian content requirements will ensure that our broadcasting system remains strong and grows stronger.

I would like to focus on a few key points from our submission. The first is support for Canadian content production.

High-cost entertainment programming—particularly drama and scripted comedy—engage the widest use of creative resources and talents within Ontario’s creative cluster.

And when a series is resold in international markets, it can generate economic benefits for production companies for years to come.

Ontario supports the principle that in exchange for regulatory supports, such as genre protection and guaranteed access to the broadcasting system, programming services are required to invest in and showcase Canadian programming. 

By stimulating market demand for Canadian content, CRTC policies have helped to build successful companies, including independent production companies which are the core of Ontario’s cluster.

Should regulatory supports or expenditure requirements be removed within the pay and specialty sector, there will be adverse effects on Ontario’s production community. The impacts will be felt throughout the creative cluster.

We strongly recommend that the CRTC’s regulatory framework maintain or enhance current levels of investment in the production and showcasing of Canadian content.

The second point I want to address is fee for carriage for over-the-air television broadcasters. I appreciate the complexities associated with this issue. 

Ontario’s cluster industries are undergoing rapid change to new content formats and distribution models. This change is occurring in a global media environment and impacts all players within the broadcasting value chain. 

Stable levels of investment will enable Ontario’s cluster companies to meet the demands of constant product innovation and development.

If the Commission chooses to introduce a fee-for-carriage, revenue should be directed to Canadian programming, particularly high-definition priority programming, such as Canadian drama produced by Canadian independent producers. 

Producing quality Canadian drama on HD will enable Ontario broadcasters and producers to compete more successfully with foreign programming and facilitate export to foreign markets.

We recognize that a greater number of Canadians are accessing entertainment content over broadband internet or mobile distribution.  Consumers want entertainment and cultural products when, where, and how they prefer.

Programming services and content-producers must move quickly if they are to flourish within the global, digital media market.

A portion of any new funds should be directed to the production of new media products associated with television programming—for example, to finance “webisodes” or “mobisodes” which could be broadcast on the internet or on cell phones.   
*
My final point is that a strong broadcasting system centres on the collaboration between a diversity of prosperous players.

The future production and showcasing of Canadian programming is dependent on the successful business relationships among all players within the broadcasting value chain.

Pay and specialty programming services that are able to negotiate mutually beneficial terms with distributors are better able to collaborate on, and invest in, the production of Canadian content.

We support the maintenance of regulations that provide the opportunity for smaller independent programming services to survive and prosper alongside larger BDUs and programming services.

Now, I would like to turn the presentation over to Karen Thorne-Stone, President and Chief Executive Officer of the Ontario Media Development Corporation.

Karen Thorne-Stone delivers OMDC portion of presentation

CLOSING REMARKS

Thank you, Kevin and Karen.

Our cultural industries are economic drivers and they have momentum. They are poised to grow substantially. Ontario has the creativity, the infrastructure, the technology, and the culture of innovation to ensure this growth.

I ask the CRTC to stay the course... to reaffirm its regulatory commitment to investment in the production and showcasing of Canadian content.

Thank you, Commissioners. We would be happy to answer any questions.