Scott Hutton to the Standing Committee on Canadian Heritage


Ottawa, Ontario
February 23, 2016

Scott Hutton, Executive Director of Broadcasting
Canadian Radio-television and Telecommunications Commission

Check against delivery

Thank you, Madame Chair, for inviting my colleague – Michael Craig, Acting Senior Manager for English Television – and me to appear before your Committee.  We commend you and your members for focusing on media and local communities.  It’s something top of mind for many Canadians, with repeated announcements of cuts to local newsrooms across the country.

Coincidently, this is a topic which the CRTC is currently examining.  In late January, the Commission began a public hearing on television programming that is closest to Canadians – local news and current affairs that keeps them informed of events and issues pertinent to their communities. This type of programming promotes the democratic process by keeping citizens informed and engaged. We are looking at the presence of this programming in order to ensure the future of local and community television in today’s fast-evolving and increasingly fractured media environment.

There are limits to what I can say about this issue. As you know, the CRTC is an administrative tribunal with quasi-judiciary responsibilities. Since the matter is pending, and to preserve the integrity of our decision making process, our appearance before your Committee is necessarily confined to explaining the proceedings.  Naturally, we will not be able to share the information gathered confidentially or to speculate on decisions or license renewals that will follow.

However, I am pleased to provide an overview of the state of local media and the motivation for our current review. I’ll focus primarily on TV, although I’ll briefly highlight radio stations too. I can also shed light on local broadcasters’ regulatory obligations when they receive a license from the CRTC.

With regard to radio . . . there are more than 1,100 radio stations in the country, which are inherently local and focused on the needs of their communities. Local news, weather and sports are the key elements of private radio operations. The talk radio format is especially popular in most major urban centres.

Yet the radio sector must contend with the growing impacts of music-streaming services and the widespread availability of connected cars.

While radio’s challenges are great, those facing TV are even greater in the age of Netflix, Facebook and YouTube. 

That’s why we launched our comprehensive “Let’s Talk TV” review of the entire television system in October 2013. We engaged with 13,000 Canadians during the course of the review, which included a public hearing in September 2014.

It was during this process that the CRTC identified a number of challenges faced by local and community television in an increasingly fragmented media world.  More and more, Canadians are utilizing different platforms to consume information and entertainment content, and even to broadcast their own. The fact that certain dailies have ceased their print versions and moved online are proof of this new reality.

Putting additional pressure on broadcasters, the advertising revenues derived from local television news have fallen sharply in recent years.

These shifting realities notwithstanding, the Commission believes profoundly that the Canadian television system should encourage the creation of compelling and diverse Canadian programming. This programming should include news, analysis and interpretation to ensure a local perspective on current events – whether that programming is produced by the private, public or community component of the system.

When we look at broadcasting policy, we strive to accomplish a number of outcomes:

  • Empower Canadians to be at the centre of their broadcast system;
  • Place the focus on the creation and promotion of world-class programs made by Canadians; and,
  • Remove barriers to innovation.

In our review of local and community TV, we additionally sought to ensure that:

  • Canadians have access to locally produced and locally reflective programming in a multi-platform environment;
  • Both professional and non-professional producers and community members have access to the broadcasting system;
  • Locally relevant news and information programming is produced and exhibited within the Canadian broadcasting system

Our review of local and community TV, which we launched in September 2015, underscores that Canadians care deeply about the service provided by the more than 85 private conventional stations and 160 community channels in their towns and cities. This is consistent with a public opinion poll conducted during Let’s Talk TV that found 81% of all respondents said they consider local news programming important. According to Numeris audience data, the local television evening newscast garners in excess of 20% of all households in some markets.

Peoples’ attachment to their local TV stations was apparent during eight days of hearings that ran from January 25th to February 3rd. Canadians told us they value local news for its capacity to connect them directly with their communities. Local news also helps them make sense of world events and enables them to participate in Canada’s political, economic and cultural affairs.

Many echoed the sentiment expressed by Kirk Lapointe, who appeared before the Commission during the public hearing.  The former head of CTV News and founding executive editor of the National Post, Mr. Lapointe said, We are too small of a country to permit broadcasters to further dim the lights in their news studios town by town.

Yet, that’s exactly what has been happening. An alarming number of television stations have reduced the length of their newscasts, cut back on staff or centralized the production of their news programming. 

That’s, in large part, because of declining advertising revenues. Data collated by the Commission indicates the cost of producing local news television content was 22% higher than revenues in 2015.

Needless to say, these are concerns the Commission takes very seriously.  That’s why we asked for public input on a number of questions as we determine how best to support media in local communities.

You may have heard about the speech given by Jean-Pierre Blais, Chairman of the CRTC, at the Canadian Club of Toronto last week.  It focused on TV news in an era of change.

The Chairman’s message was clear:  Even if the old way of doing business is no longer sustainable, there is no shortage of opportunities to make great content that will continue to draw viewers – however Canadians choose to access programming.

He also underlined that there’s a massive amount of money in the television system that should be put to work to resolve these issues. Our research for the Let’s Talk TV review found that supports for Canadian television production are worth more than $4 Billion annually.

When the CRTC issues local broadcast licenses, they come with conditions – one of the most critical being that they produce and provide local TV programming. In exchange for the right to sell advertising and use the public airwaves to bring their productions into the homes of Canadians, broadcasters have a duty to serve the public interest.

Because our democracy depends on it. Local programming promotes the democratic process and the public good by keeping citizens informed and engaged.

English-language stations owned by the largest ownership groups are required to broadcast at least seven hours of local programming per week in non-metropolitan markets.  And at least 14 hours per week in metropolitan markets. 

In 2014, TV stations spent more than $470M on local programming and news, while broadcasters spent $150M on community television channels.

So, the Commission is convinced there’s sufficient money in the system to support the creation of news and local information programming. 

Canadians have been clear throughout our public consultations that they expect us to pay close attention to the quality and quantity of news and public affairs programming being provided by broadcasters.

We’ve sent an equally clear signal to the TV industry that we’ll hold major broadcasters to account when their licenses come up for renewal in 2017.  If they fail to live up to their end of their bargain with Canadians, the CRTC will not hesitate to take action.

As CRTC Chairman, Jean-Pierre Blais, warned the TV industry last week that Television news belongs to the marketplace of ideas, not the marketplace of higher dividends for investors. We certainly hope that the message got through.

Madame Chair, this is what I can safely say prior to the release of our decision on local and community television.  Of course, both Michael Craig and I would be happy to respond to your questions to the best of our ability.  We welcome your questions now…..

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