[Recorded by Electronic Apparatus]
Tuesday, May 28, 1996
.1110 
[Translation]
The Chairman: Order! It is 11:10 a.m., and I will now call this meeting to order.
Since we will be hearing from a very important institution today, with your agreement, we will extend the meeting until 1:10 p.m. if necessary. If not, we will conclude at the scheduled time.
[English]
Following a motion by the official opposition, we have the National Film Board before us for the first hour, and in the second hour we're going to hear from the Syndicat général du cinéma et de la télévision.
Greetings, Mrs. Macdonald. I also greet Mrs. Laurie Jones and Mr. René Villeneuve from the National Film Board.
I suggest that you try to keep your presentation to fifteen to twenty minutes in length to enable us to have time for questions afterwards.
Just before we start our proceedings, I would like to inform the members that our clerk, Madame Bélisle,
[Translation]
cannot be with us today, because of the death of her father. I would like to extend our condolences to Ms Bélisle.
[English]
Mrs. Macdonald, the floor is yours.
Ms Sandra Macdonald (Government Film Commissioner and Chairperson, National Film Board of Canada): My name is Sandra Macdonald, and I'm government film commissioner and chairperson of the National Film Board of Canada. With me are Laurie Jones, who is the director general of communications and distribution services, and Monsieur René Villeneuve, who is the assistant director general of services and technical development.
We were asked here today to discuss the restructuring of the National Film Board announced earlier this spring and the effects of that restructuring on the board itself and on the film industry generally. Since this is a very broad topic, and our time with you this morning is limited, I will take a few minutes to give you a brief overview of the challenges with which we were confronted, the approach we used to analyse our options, and our ultimate decisions. We can then respond in more detail to any specific questions you may have.
A kit has been provided for each of you. It contains the decisions taken by our board of trustees on March 13 and March 14 of this year, the action plan that embodies those decisions - which we are now putting into effect - and a number of tables that illustrate the changes in the National Film Board's budgets, staffing, deployment of personnel, and expenditures by province over the period of the action plan. Charts showing details of our laboratory operations are also included, since we understood that this was a topic of particular interest to the committee.
When we were here in December we provided copies of the National Film Board's catalogue for the interest of all of the members of the committee, and because we have not met many of you before, we've taken the liberty of doing so again this morning for those who are interested.
Why restructure? First of all, let me take a few moments to explain why restructuring was necessary. Of course, the most obvious factor is the substantial reduction in our parliamentary appropriation. Details can be seen on chart 1, which you have.
Last year we sustained a $5 million cut. We will lose a further $11 million this year and $9 million next year. Our finances will stabilize unless something unforeseen happens following a further $2 million cut in 1998-99. This means that over a four-year period our appropriation will drop from $81 million to $54.5 million, a 32% reduction.
We hope to keep our earnings at about $10 million a year, which will cushion the blow somewhat. However, it's obvious that such a radical change in our financial circumstances must inevitably result in significant impacts on the organization. Since we spend approximately 80% of our revenue on people, a significant impact on people is equally unavoidable.
Obviously, the cuts were an externally imposed impetus for change. I can confidently say that given a choice we would have elected to retain the financial status quo. However, change was also required for other reasons.
The production industry in Canada and indeed in the world has changed radically in the last few years, and the pace of change seems certain to continue at the same dizzying rate. A large part of this change is technological. One important aspect is the transformation of the film production and distribution process from film to video and to digital formats.
It has now been many years since the primary vehicle by which the Canadian public has seen NFB productions was film. The overwhelming majority of our viewings are through the medium of television. There were 5,000 broadcasts of NFB films last year alone. Next in order of importance is the video cassette, whether loaned, rented or sold. A very distant third is projection on the screen. The dominance of video as a method of distribution is well established at the board. Over the last couple of years the editing process has also turned overwhelmingly to video.
The phenomenal growth of computer-assisted animation and visual effects has transformed post-production from a mechanical to a digital activity. The arrival on the scene of reliable digital video cameras has meant that film-makers are increasingly turning to video for image capture as well.
These are not changes that have been imposed on anyone. They have been adopted because the public preferred them, because the technicians preferred them, and because the film-makers preferred them. However, video and digital are fields where equipment changes rapidly and where staying at the state of the art requires commitment and investment. This is a strategic choice.
Another important aspect of technological change is the arrival of interactivity on the Internet, on CD-ROM, and in other forms of multimedia. Interactivity has changed the whole vocabulary of production and has opened up wonderful new horizons for creators, particularly those interested in producing learning materials, a traditional strength of the NFB.
Multimedia requires quite a different set of skills than traditional linear storytelling does. Should the NFB, which has always prided itself on innovation, be present in this new audio-visual frontier? Again, this is a strategic decision.
.1115
In addition to technological change, important changes have taken place in the way the production industry in Canada operates. Over the past decade there has been a phenomenal growth in the number of independent production companies in all parts of the country.
This growth has been actively encouraged by both federal and provincial governments and by the CRTC. As a consequence there exist many credible and valuable co-production partners. There exists a large and capable pool of skilled freelance personnel in all areas of production. There exist numbers of high-quality providers of all kinds of technical services, from laboratories to sound stages to post-production facilities.
When the NFB started it was the film industry in Canada. Everything had to be done under one roof. Over the years a whole other industry has grown up beside it. The existence of this other industry offers the NFB the flexibility to structure individual projects in a variety of ways, according to need and opportunity.
Budget reductions are therefore not the whole story in our need to restructure. They did, however, force us to focus in a very concentrated way on where we wanted to go and why.
In this examination we had the additional impetus of the concurrent examination of our mandate by the mandate review committee chaired by Pierre Juneau. The work of the mandate review committee was a constant parallel to our internal work and arrived, as those of you have read his report are aware, at the same time as our own conclusions.
[Translation]
Fundamental principles: The logical starting point in our re-examination was our mandate. The National Film Act of 1950 defines the Board's mandate as follows:
- To produce and distribute and to promote the production and distribution of films designed to
interpret Canada to Canadians and to other nations.
A discussion paper entitled, "The NFB in the Year 2000", was circulated to all staff and a number of industry associations in July of 1995. More than 40 meetings were held with NFB personnel to discuss the document over the months of July and August. The mission statement and the vision were generally endorsed, both within the Board and outside. They appear, essentially as first drafted, on page 2 of the Action Plan you have before you. The clear priority was determined to be maintaining the NFB's production capacity at about 85 films a year. All other activities would be reassessed in light of this priority.
[English]
The restructuring process: The employee consultations during the summer of 1995 revealed that while the overall goals which had been defined were broadly supported, a number of the proposals for how to implement those goals within the anticipated financial constraints were quite controversial. Four areas were singled out for more intensive study for a twelve-week period during the fall of 1995. They were the production process, technical services, collection management, and administration and support. Committees consisting of ten or more NFB employees, representing the English and French programs, Montreal and the regions, those working directly in the area under study, as well as those in other sectors whose work intersected that area, were established for each of these four topics.
A sponsor from senior management supported each team. The consulting firm Ernst and Young was engaged to help organize the work of the committees, which met one full day a week, toward the end often two, and which devoted an additional day each week to research and further discussion. Staff representatives from Vancouver, Edmonton, and Toronto came to Montreal weekly for these meetings.
.1120
Each committee forwarded a series of recommendations for actions in their area of expertise to the senior management committee just before Christmas. The senior management committee reviewed these recommendations as a whole, accepted almost all of them, and in January set about reviewing the financial and human resources implications to ensure the ensemble of the recommendations formed a coherent whole and would indeed result in $20 million in savings.
[Translation]
The Report of the Mandate Review Committee was released on January 31, 1996. The Report endorsed the approaches the NFB restructuring plan had set out, with two significant differences; it recommended that most of the English program be moved to Toronto, and that the remaining Montreal activity be moved downtown.
On February 12, a meeting of all staff was held to release details of the plan, which was made available in hard copy and on the Internet. Montreal staff participated in person, and the regional and New York offices were linked by telephone. Staff were advised that the plan would be discussed by the Board of trustees on March 13 and 14, and that each of the three NFB unions would have an opportunity to meet with the Trustees to propose alternatives to the plan which would meet the goals set out in the mission statement and arrive at the same $20 million saving.
The federal budget was released on March 4, confirming the cuts. After many months of representations, we finally succeeded in having the NFB designated a most affected department, permitting more generous severance packages for employees whose jobs would be affected.
The Board of Trustees met on March 13 and 14, and after long and serious deliberations, adopted the restructuring plan. The three NFB unions did appear, but other than requesting a moratorium for two years, did not offer any alternative scenarios for dealing with the cuts.
The decisions of the Board of Trustees were circulated to all staff on March 18. Meetings were held with all affected or potentially affected staff on the 18th, and a human resources support program went into action.
[English]
How the NFB has restructured - first, production: We started from the principle that production is our top priority, that we want to release 85 new titles a year, and that we want to continue to have a presence in all our existing production centres, Vancouver, Edmonton, Winnipeg, Toronto, Moncton, and Halifax, as well as Montreal. In order to ensure as much of the production money as possible appears on the screen, the number of producers and executive producers has been reduced by half. Creative positions will be filled on a per-project or fixed-term contract and location personnel will be hired on a freelance basis, which is the norm in the private-sector production industry.
If we are successful in maintaining our level of production, the number of individuals engaged to direct, shoot, capture sound, and perform all the other tasks associated with making a film will remain the same as it is today. They will simply be predominately freelance rather than full-time employees.
We will continue to co-produce with film-makers from across Canada and to provide support to emerging film-makers through our existing programs for that purpose.
[Translation]
Technical services: A major change in the area of technical services was to assess the cost of each service being offered at our Montreal plant and to compare that cost with services available from the private sector. We took the position that we should only continue to offer in-house those services which offered a cost advantage relative to the private sector, or provided some other advantage of such value as to justify their retention, where they were not economic. The assessment of the viability of each service was based on decisions about production formats taken by the technical services restructuring committee, and on estimates of volumes provided by the two production programs.
.1125
Based on these assessments, it was decided to expand visual effects, to retain pre-production, editing, sound and video services, and to cease operating the graphic studio, the shooting stage and the laboratory, except for certain specialized functions needed for conservation and visual effects. Charts 2 through 5 illustrate the facts which governed the decision to close the lab. I will ask René Villeneuve to walk you through them.
Mr. René Villeneuve (Assistant Director, Technical and Production Services, National Film Board of Canada): Good morning. Chart No. 2 illustrates what Ms Macdonald was saying about the trend in the use of film and video at the NFB. Since 1956, the NFB has used film as the main medium for capturing the images it creates.
However, beginning in 1975, we see a significant reduction in the use of film, first as a distribution medium, because at the time, over 90% of the approximately 40 million feet of film we processed each year was used for distributing our films to film libraries, cinemas, and so on. As early as 1984, there was a considerable reduction in the use of film in favour of distribution on conventional television and already a little on videocassette. By 1995, the volume had dropped significantly. Now only some 10 million feet of film are processed in our NFB laboratories in Montreal.
At the same time, the production or capture of images began to move a little toward electronic capture. We turned toward video production. Last year, many of our productions were produced electronically for the most part, or at least were a mixture of an electronic medium and film.
Clearly, we will continue to use film for image capture. However, we must look for more economical ways of processing it. I would draw your attention to Chart No. 3. It gives a breakdown of various laboratory and video operations. These are all the costs related to our operations. In 1994-1995, 42 people worked in the laboratory, 15 in video and three worked in engineering services, in the maintenance of lab facilities.
The total cost, including rent, and so on, is approximately $2.7 million a year. If we add on the maintenance cost of $268,000, the total comes to some $3 million a year. If we had to have the film developed by outside services, the cost would be approximately $3.7 million. So these services still seem relatively cost-effective.
However, it must be mentioned that 30% of the volume processed in the lab was work done free of charge, as part of assistance or co-production projects, in which we supplied some of our services free of charge. This did not have a direct impact on NFB productions.
We made this surplus volume available, because we had an infrastructure that was designed first and foremost for distribution purposes, but which was being used to all intents and purposes for production purposes only. It should be mentioned that in 1975, close to 120 employees worked in the lab. In 1995, with 42 employees, we had a significant production capacity, but we were not using all of it for our own needs.
In Chart No. 5, we have used the data submitted by the various programs to estimate the volume of work that would be done in the next few years - so this is a hypothetical study - if we were to reduce the number of staff in the lab to 14. If we were to use for production only the majority of the services that we formerly offered for distribution, the cost would nevertheless be approximately $1.2 million. However, the value of the services we would be offering is less than the cost. If we had to purchase these services from an outside source, they would cost us about $900,000.
.1130
Moreover, with 14 people working in the lab, we wouldn't necessarily have the capacity required to meet production needs properly when a number of films are being processed at the same time. It is well-known that increasingly faster service is being required for production.
If eight productions come in on Monday morning, I won't be able to provide the film or the working copies needed by the next day or the day after that. That is what is being required at the moment. We can offer it, because we have an infrastructure that can handle a volume of this type.
It is important to note another point. With the technological change mentioned byMs Macdonald, film is being used mainly for image capture, not for distribution purposes. Increasingly, electronic editing procedures are being used. We will be using them almost exclusively in the next two years. We convert the negative film directly to a video electronic image and everything is edited electronically. As a result, I don't have to make working copies, and this results in a considerable drop in in-house demand.
This leads us to take into account the fact that the infrastructure we would have would be under-used in terms of volume and too expensive for our real needs.
[English]
The Chairman: Ms Macdonald, could you perhaps conclude in the next three or four minutes so we can have time for questions, please?
Ms Macdonald: Yes, I certainly can, sir.
[Translation]
I should mention that we offered assistance in developing a business plan to any former employee who wanted to offer, as a private company, a service we were getting out of. An agreement has subsequently been reached with a former employee to operate the shooting stage as a private venture.
The third component of our restructuring plan is collection management. In the past, the NFB had an approach to making its collection available to the public which offered a very high quality of service through some 30 distribution centres across the country. This service was also very expensive. Over the past two years, all of those centres except Toronto, Ottawa and downtown Montreal have been closed. Toronto and Ottawa will close in August. The collection has been placed with partner public libraries in each centre. A much more streamlined approach to the most active 300-500 titles has been installed which makes use of a 1-800 number and the Internet to respond to enquiries and to make sales. This activity is slated to become cost recovering within a year.
A different approach has been taken to the balance of the NFB's 9,000 titles. A major effort is underway to evaluate and conserve our vault holdings, and to transfer all those titles which are in suitable condition to laser disc for consultation and the making on request of single video copies through our CinéRobothèque in downtown Montreal. Some 3,500 titles have already been transferred. The collection belongs to the Canadian people, and we take our responsibility as its custodians very seriously - even in these difficult times.
[English]
Finally, we have simply reduced all administration and support activities by 50%.
As to the impact of restructuring on staffing, chart 6 in your package provides the details of where jobs have been affected. Although the jobs affected as a consequence of our March decisions are primarily in Quebec, you will see from the chart that the closing of distribution centres across the country over the last year or two has resulted in significant reductions almost everywhere.
.1135
Montreal, of course, remains overwhelmingly our largest location, and therefore has borne the brunt of most of our reductions. Obviously, if we wished to keep our existing production centres in operation, there wasn't much left to cut anywhere else in the country.
As I mentioned earlier in discussing freelance production positions, we are aiming to maintain our production levels, so the 2,000 to 3,000 contracts a year we issue to freelance personnel should be maintained or even increased.
Of the continuing positions that are being or have been eliminated at the NFB, approximately 170 employees over the last two years have been eligible for early retirement and have therefore been able to leave the board with their full pensions. In cases where employees are not eligible for early retirement, continuing positions are being filled according to the bumping rules set out by the unions. For those who do not find another position, severance packages average one year's pay, accompanied by counselling sessions, financial advice from professionals, and a variety of other services.
That briefly is an overview of the restructuring process we have undertaken in order to respond to our changing circumstances while continuing, as our mandate requires, to interpret Canada to Canadians and the world.
I would like to draw your attention to the two final charts in your package. Chart 7 shows the allocation of our resources, which are a combination of our parliamentary appropriation and earnings, to different activities once the plan is implemented.
You will see that we have held firmly to our commitment to production, with the proportion of overall expenditures increasing from 51% last year to 63% in 1998-99. The absolute dollar amounts are in fact slightly smaller, but we believe the production efficiencies that will result from our streamlined production structure, our greater reliance on freelance personnel, and ensuring that our technical services are cost-effective will permit us to maintain our output within the amounts of money we have available.
Chart 8 shows the geographic allocation of NFB spending before restructuring and after. Proportionally, there isn't much change.
These are the impacts of the restructuring on the internal workings of the NFB. The committee's resolution also raised the issue of the impact of our restructuring on the private industry. This is somewhat harder to assess, particularly in view of the fact that the private industry tends to deal with other public agencies such as Telefilm Canada, the CBC, provincial broadcasters like Radio-Québec and TV Ontario, and provincial film agencies. While cuts to the board have been severe, the actual dollar impact of cuts at larger agencies like Telefilm and certainly the CBC will have a more far-reaching effect than the cuts to us.
The provincial agencies have also been hard hit this year, with Radio-Québec cut in half, the Alberta Motion Picture Development Corporation eliminated entirely, and the Ontario Film Development Corporation getting out of direct investment in films. The fate of TV Ontario is also hanging in the balance as we speak.
In the scheme of things, therefore, the fact that the NFB is maintaining most of its production resources means that the private sector creators and technicians we work with in the documentary and animation fields will be less affected by our restructuring than by cuts to other agencies.
The fact that the Canadian Film and Television Production Association, l'Association des producteurs de films et de télévision du Québec, and the Film Caucus, all branches across the country, have endorsed our plan, as indeed did the mandate review committee, would seem to indicate that we're on the right track. From the letters and phone calls that have crossed my desk since the plan was announced, there has been very little fault found with our priorities, although many naturally regretted the fact that we were being cut at all.
The issue that has generated by far the most criticism, but from community groups rather than the industry, has been the closure of Studio D, the English program's women's studio. In fact, these concerns represent a misunderstanding of our intentions in this area, which include a much more comprehensive, institution-wide commitment to film-making that reflects the diversity of Canadian society.
There is no one right way to approach the kinds of challenges the National Film Board is facing. That was the reason for the very lengthy process we embarked upon before taking any decisions. It was the reason for including so many people, both inside and outside the board, in the formulation of recommendations for change. It was the reason for our willing involvement in the work of the mandate review committee.
We have tried always to keep our obligation to serve the Canadian people with high-quality, relevant productions as our touchstone, while at the same time seeking to improve our stewardship of taxpayers' money by producing and distributing films as efficiently as we can. We believe our plan does that.
.1140
The Chairman: Thank you very much, Ms Macdonald.
[Translation]
Since we were a little late starting because of technical problems, we will continue with questions until 12:10 p.m. We will begin with a ten-minute round for the Official Opposition and the Liberal Party.
[English]
which will be followed by individual questions of five minutes each. Mr. Leroux.
[Translation]
Mr. Leroux (Richmond - Wolfe): Thank you for your presentation, Ms Macdonald.
My first observation is that I have here two documents that seem contradictory. There are even clearly opposing views in these two documents. There is therefore a long list of things I'm wondering about.
In your presentation, you talked about speed with regard to your action plan and the cutbacks. You said that you had noted that the cuts announced in the budget did correspond to those you had anticipated.
That initial observation indicates to me that you acted very quickly. You speeded up the changes before even knowing... I get the impression that you didn't fight very hard to maintain your situation and you said to yourselves: "Since there will be cutbacks, we'd better prepare for them."
You spoke of discussions with consulting firms and staff on the changes in the plan, etc. If there's been this kind of exchange, why did the craftspeople ask for a two-year moratorium? You said that they didn't propose any other plans, but in your opinion, why did they demand a moratorium?
[English]
Ms Macdonald: If you permit me, I'll respond in English. It's easier for me.
First, the question was raised, which was unfair, I would have to say, that we did not object to the cuts the government was planning to impose on the National Film Board, among others. Obviously, the level of our cuts was, in percentage terms, virtually identical to the cuts that have been imposed on Telefilm Canada and on the CBC.
We made our arguments with the minister of the day, Mr. Dupuy. We made our arguments at length with the mandate review committee with which we worked for five months before their plan was adopted. However, the position I have been given by the Government of Canada is to manage an institution, taking proper account of the resources Parliament sees fit to give us.
We were aware that the priority of the government as supported by the government, which has the elected representatives of the people, was to reduce the budgetary deficit of the Government of Canada and that all departments and agencies were likely to be affected in this process. We were aware of this. Who could not be aware of this? So as prudent managers we had two avenues that were essential to pursue. One was to privately argue why we should not be cut. The second was to prudently plan for what should happen if we were cut.
The worst possible thing that could have happened was that on March 3 or 4, whichever day the budget was announced, we would be told that on April 1 we would have $11 million less, and we would have no plan for what we were going to do.
We made a commitment years ago, which we have honoured. It's that any employee who has their job eliminated at the National Film Board will get six months' notice. That is, they will continue to be paid for six months, if not longer. At the present time, our severance package is more like a year, on average. They would be paid for at least six months.
.1145
Therefore, any budget cut that we had starting April 1 of this year could not in fact even begin to come into effect until September 1, which would mean that we would have to in fact cut even more deeply in the balance of the year in order to come out of the year within the budget we had.
We said we should make a plan that first of all makes it very clear, no matter what our financial situation is, what our priorities are. That plan was that our priority is production. We will try to reduce everything else as much as possible. We will try to make sure that every service we offer is completely cost-efficient. If it would be cheaper to get a service from the private sector, we'll go to the private sector and get it, because that will give us more money to make films.
In that way, that means that if, for example, next year we do not get the $9 million cut, which is in the estimates for next year, then we will make more films with the money we have available, because we have already eliminated any inefficiencies that were in our plan.
So by putting the priority on production, the plan basically says that we have reduced all non-production costs to the minimum as much as we can. Therefore, anything we have that is in excess of that can and will go to production.
We will continue to argue why we should not get next year's cut, and if we don't get next year's cut, then we will make more films. However, if we do get next year's cut, we will be ready.
It was part and parcel of the planning process to say that we will not be caught with one month in which to make a hasty plan that will hurt more people because it will be poorly thought out.
[Translation]
Mr. Leroux: I understand all your arguments very well, but what arguments were put to you internally in favour of a moratorium. You didn't describe them. Given the speed with which things were done and the fact that the Juneau Report seems to have been forgotten - it wasn't commented upon and nobody discussed it - I get the impression that the government ordered you to do certain things. The administration wants to cut back and makes plans internally. There is no discussion of the Juneau Report nor the recommendations, and we have to go ahead. That's my impression. I would still like someone to tell me what arguments were put forward internally to justify a moratorium.
[English]
Ms Macdonald: Well, very simply, I don't think there was an argument for a moratorium. That's because, with an $11-million cut starting April 1, which we knew about when the board met on March 13 and 14, what we would have had in order to have a moratorium - I presume by moratorium you mean to not affect anyone's job in a two-year period - was that in year one half of all of the money we had available to make films would not be used to make films. We would therefore be paying people, not making films. Then, in year two, we would have the balance of what the board calls free money, which is to say money you can write a cheque on, which is not a fixed cost.
[Translation]
Mr. Leroux: In understand all those arguments, Ms Macdonald, because you stated them very well, but what arguments were put forward in support of a moratorium? Was it to save people, to save jobs? Were you told about the unknown or partially known consequences of restructuring? What arguments were presented in favour of a moratorium? Was it simply to save staff and jobs? Was it to understand the consequences of changes? What were the arguments?
[English]
Ms Macdonald: I have right here the presentation that was made by the Syndicat général. Only one union asked for the moratorium, which was the Syndicat général. The other two did not ask for this.
The arguments were that moving to video from film was a hasty decision that was not fully understood. There is the problem of preserving videos. And the cost of replacing film with video equipment is high, which we know.
.1150
There was an issue about whether we would continue to be able to offer film restoration. We have in fact made plans to continue to do that with our existing lab.
What will happen to black-and-white film, which was maintained to be developed only at the board's laboratory? Actually, there are other laboratories in Canada which develop black-and-white film.
There was an argument - first of all, this was a completely inaccurate statement - that the board has announced its intention to transfer a high proportion of English production to Ontario. In fact we are transferring only $1 million to Ontario.
Why dismantle a proven model for bicultural organizations that many would like to reproduce to maintain national unity? About that argument, I would have to say we actually have one production going on as between English and French programs this year. It's actually unusual. We don't usually have any.
And there is the argument that once the lab is closed it will never again be able to be reopened.
These are the arguments that were made for why we should have a moratorium.
First of all, I think we do understand very well and have demonstrated through the work of all those committees that worked through the fall that we understand the effects of the transition from film to video. We understand video is a medium that doesn't have the history of life that film has, so we don't necessarily know its conservation prospects and so forth.
But we also understand, first of all, that we have already, internally at the board, made much of the transfer to video. The transfer to video has come because distribution wanted it because it's what the clients wanted. The clients don't want films to screen, they want video cassettes. We respond to that. We made the change in editing because the editors wanted it. We made the change in post-production because you can do much more interesting work.
We made the change, to the extent it has been made - no one has been forced to go to video instead of film for image capture - because the directors liked the immediacy of it. They like having it right in their hands the next day.
We know the effects of the transfer, and we wrote into our plan all those things. I think we've understood it very well.
[Translation]
The Chairman: Mr. Leroux, your time is up. Mr. Bélanger.
Mr. Bélanger (Ottawa - Vanier): Ms Macdonald, I followed your presentation and I must say that the process that was followed seems to have been relatively open and inclusive as opposed to exclusive. Therefore, I can only wish you the best of luck in the reform that you've undertaken and I hope that you will attain your production objectives.
I would like to ask you a question about a completely different matter. It is with regard to the agreement that you signed with a former NFB employee concerning a sound studio, I believe.
I would like someone to provide me with more details about that.
[English]
Ms Macdonald: When it became clear there were certain services it did not make economic sense for us to provide ourselves, one of them was our shooting stage, which is a very large stage and which costs us $500,000 a year in rent for the Department of Public Works. We do mostly documentaries and animation and therefore we use that shooting stage very little. That was why we decided to close it.
Mr. Bélanger: Is this the sound stage?
Ms Macdonald: It's our sound stage, yes. There's an error in the document, I'm sorry.
Mr. Bélanger: So ``shooting stage''.
Ms Macdonald: ``Shooting stage'', yes, in the French version.
Mr. Bélanger: Violent language.
.1155
Ms Macdonald: We call it a sound stage.
We have said to all of the employees in areas where we were in fact completely closing something down, ``If you think you could run this as a private operation, then if you want to develop a business plan to see if it will work, we'll help you with that''. And in fact we had several people come forward who were interested in providing graphic services. We had two or three activities where people asked us for help in developing a business plan.
One was that we had a former employee who felt that he could run the sound stage effectively as a private business, so we provided the services of a business planner to him. We spent a great deal of time looking into the details. We negotiated a better rent for him with the Department of Public Works. Finally, having worked out all of the details, we have come to an understanding with him that we will rent him the sound stage at the new negotiated price for a period of five years. We have made a deal with him to lease-buy the equipment he will need to run the sound stage over a period of three years, at the end of which time he will own it. Of course it's up to him who he engages to work with him on it. Others, though, will work with him on that activity.
It will be a private activity. It will not be a National Film Board activity, but we have spent a good deal of time and energy in trying to make it work out.
In fact, whenever someone came forward with something that they thought they could offer on a private basis, we looked at it carefully.
Mr. Bélanger: On the same matter, does the NFB have a policy that guides its decisions in this matter? For instance, how would you resolve between two individuals or two groups of employees that might have a similar interest? I'd like to know if there's an internal policy or if you follow Treasury Board guidelines or what not.
Also, are there other individuals or groups of employees who are interested in other aspects from which the NFB has decided to withdraw?
Ms Macdonald: First with respect to policies, of course we are bound by Treasury Board policies on dealings with ex-employees. There are certain guidelines that you must follow in that regard. For example, whatever arrangement you make with them that is preferential has to be opened up for public bidding after three years. That's a Treasury Board guideline that we must follow.
As it happens, we haven't yet had really competitive bids for the same service. The things that people wanted to do were all slightly different in some way, so they were looked at case by case. But if we had competitive bids for the same thing, obviously we would simply look at the one that would seem to provide the best service under the circumstances.
Mr. Bélanger: Have there been any complaints from either the unions or any of the employees about the process for offering these kinds of partnerships or arrangements?
Ms Macdonald: I haven't received any. Sometimes these things are difficult to work out, and in the course of working out the arrangement over the sound stage we had many difficulties, which involved us in deciding how we would deal from something that was staying inside with something that was going outside. We've had to work them through, and in some cases it was not very easy. But we've stuck with it. In fact, we have spent a long time on this particular process.
Mr. Bélanger: Have you had any complaints?
Ms Macdonald: No.
[Translation]
The Chairman: Are there any other questions from the government side?
Mr. Arseneault.
[English]
Mr. Arseneault (Restigouche - Chaleur): I thank the witnesses for the presentation, because it was very impressive. It clarified a lot of the questions that have been floating around this table for a number of weeks.
.1200
The first question I have is about the so-called women's studio and the representation of cultural minorities in your productions. I'm wondering if you could address that. You made allusion to it in your conclusion, just slightly. I hope that doesn't show the priority the NFB gives this subject area. I know it doesn't, but I'll let you answer that first.
Ms Macdonald: I'm happy to. In fact there are a great many things in the presentation which we addressed very quickly, in the interest of time, but which there's a great deal more to than a sentence or two could possibly express.
About the priority we place on ensuring our films represent the diversity of Canadian society, in the past we had two or three different things. We had a distinct studio structure for films made by women, first in the English program, which was started in 1974. That was known as Studio D. In those days if you were a woman who wanted to make films, and particularly if you were a craftsperson who was a woman, the board was a pretty male place. So Studio D offered perhaps a more supportive environment for women film-makers in those days.
Subsequently, in 1986, the French program developed the program Regards de femmes. In 1990 we started Studio One, which was our aboriginal studio in Edmonton.
Out of Studio D, for the last five years, we have also had a program called New Initiatives in Film, which was to provide more opportunities for aboriginal women and women of colour to get exposure and training in order to get them on the first rung of the ladder, shall we say, to make films.
We have also had quite numerous training programs in the board to train film-makers and technicians from the designated groups for employment equity. That's been an ongoing thing for a number of years, both for our own projects and sometimes simply to provide training after which the people go to work elsewhere.
What we looked at when we were doing our restructuring plan was we said first of all this is an activity that shouldn't be isolated to one particular area; it should be everybody's responsibility; it should be a global responsibility. So we made a commitment that across the board in our decision-making process we would ensure that something approaching half our films every year would be directed by women; that we would put a new program - we are about to put a new program - in place for aboriginal film-makers; and that we would undertake special efforts by designating specific producers to ensure visible minorities were getting their proper chance to make films with the National Film Board.
Rather than have a specific studio structure for that, what we've done is we've made it an across-the-board obligation. But in order to ensure it happens, because we know these things don't happen if just left to themselves, we've set up special-mandate teams in the programs, and they have designated producers who are to be the champions of diversity in the film-making program. These people will report directly at every meeting of the board of trustees. They report on how we're meeting our overall targets, whether there are particular initiatives or areas where we're weak and need to be taking more action, and so forth.
That's the avenue we've elected to follow. But in addition we decided that for aboriginal film-making we did have far enough to go that we should also have a special program. We are replacing Studio One, which was localized in Edmonton, with a pool of money which will be available for aboriginal film-makers to use but which can used from any of our production centres across Canada.
.1205
We did discover in our experience with Studio One that in fact after five years Studio One had completed relatively few films in its own name. But we had made thirteen films with aboriginal film-makers at every studio in the country in the same period of time, so we felt that in fact it was better for the film-makers and that it produced the result we wanted.
[Translation]
The Chairman: I will now go to Mr. Leroux. There's not much time left.
Mr. Leroux: I have questions about the cutbacks that are hitting Montreal to the benefit of Toronto.
The Juneau Report proposed the transfer of production facilities of the NFB's English sector to Toronto. I think that the NFB first proposal was also to transfer a significant portion of production.
Ms Macdonald: No, sir.
Mr. Leroux: Well, let's get back to the Juneau Report, which proposed that transfer. We didn't hear anything about recriminations or major problems, at least not for the work of the anglophone section of the NFB in Montreal.
Why is there this sudden tendency to pull out and leave? I get the impression that I've witnessed several government instances of that, notably the transfer of Tokamak from Quebec to the West, the transfer of the Energy Canada headquarters to Toronto, etc.
Are people really scared of a positive referendum result that they pull out? If there have never been any problems in that sector, why are people suddenly pulling out? One hundred and seventy out of 180 positions in Montreal have been abolished and have moved to Toronto. What was the rationale for that decision?
Ms Macdonald: Mr. Leroux, it is very very simple.
First of all, in December, journalists were given inaccurate information and that caused a huge number of problems. Our plan is not a new one. It is at least two or three years old. Its purpose was to find a happy medium for English production in Montreal and Toronto, because there is a huge group of film makers located in Toronto.
As for our activities in Ontario, as you can see on Chart 6, there is very little activity in Toronto. Ontario had 26 person-years in September 1992 and 21 in February of this year, whereas Quebec had 583.
I really cannot say that Quebec was treated unfairly under this plan. That is simply not true. We gave our English production centre in Toronto $1 million more. That's all. There may have been two extra producers in Toronto, which is the country's most active production centre.
The Chairman: Ms Macdonald, could you stop there?
I will let Mr. Arseneault ask a very short question, because we must leave some time to hear the Syndicat.
Mr. Arseneault, go ahead.
Mr. Arseneault: My question has to do with minorities, women and aboriginals.
You did not mention francophones outside Quebec during your presentation. Despite the lack of time, could you tell me what impact your plan will have?
.1210
[English]
Ms Macdonald: We have made an absolute commitment to preserving our capacity to produce with francophones outside Quebec. We have retained our French production centre in Toronto. We have an English production centre, but we also have a French one. It's two people, but it's a production centre, and it's making four or five films a year. It serves Ontario and the west, and the producer there travels throughout the country and deals with francophone film-makers in Toronto and west of Toronto.
We've also retained our production centre in Moncton and we're making four or five films a year there.
Mr. Bélanger: Is that Ottawa west or Toronto west?
Ms Macdonald: It's Toronto west. We don't make anything in Ottawa.
[Translation]
But we kept our promise to continue production for francophones outside Quebec.
[English]
The Chairman: Ms Macdonald, thank you very much to you and your colleagues for coming today. We appreciate it.
Ms Macdonald: Thank you.
[Translation]
The Chairman: I would now ask the representatives of the Syndicat général du cinéma et de la télévision to come to the table.
[English]
Mr. Co Hoedeman is the president and animation director; Mr. Tim Latchem, line producer;
[Translation]
Ms Isabelle Dupuis, Leadhand, Inspections; Ms Louise Murchison, Director; and Mr. Philippe Trolliet, film technologist.
[English]
The floor is yours, Mr. Hoedeman. As you saw with Ms Macdonald, could you and your colleagues confine your remarks to about twenty minutes in length so that we have time for questions? Thank you.
Mr. Co Hoedeman (President and Animation Director, Syndicat général du cinéma et de la télévision): My statement will be very short. We have provided you with a much more detailed document that we also have presented to the board of trustees.
Mr. Chairman, members of the standing committee, Ms Macdonald, we'd like to thank you for your invitation to appear before this committee. We hope we will be able to answer all your questions. We also sincerely hope we'll be able to convince you of the urgency of the NFB crisis.
If I may, I will read to you an excerpt from the Speech from the Throne of Tuesday, February 27, 1996:
[Translation]
- The government reaffirms its commitment to ensuring the long-term vitality of the CBC, the
National Film Board and Telefilm Canada as institutions which interpret Canada to Canadians
and to the world.
However, among the cultural agencies, these institutions are the most affected by the federal budget cuts for 1995-96 and 1996-97, specifically, cuts of $10.5 million for the current year for the National Film Board.
To make matters worse, Ms Macdonald has immediately implemented a $20 million budget cut to the National Film Board.
Ms Macdonald states in her document, ``The National Film Board of Canada in the Year 2000'', the transformation plan from February 12, 1996, that despite all the cuts it is possible for the Film Board to maintain an output of 85 films or titles per year, including ten prime-time productions in English and five prime-time productions in French. We believe this is not possible.
.1215
The reduction or closing of many services and the loss of 180 highly skilled and specialized employees, the majority of whom are employed in Montreal, put the survival of the NFB at stake.
The Macdonald plan recommends radical technological shifts from film to digital formats. In implementing these changes the NFB has decided to close the film laboratory on June 28 of this year, 1996. The consequence of this decision is to lay off about 40 skilled technicians. We lose quality control over our productions. We lose technical means to preserve our film collection.
There is a definite plan to transfer English program activities and funds from Montreal to Toronto and to change the mandate of English production in Montreal from national to regional. In the new NFB there will be one documentary executive producer for the Montreal and eastern regions and one documentary executive producer for Toronto only. Before, there were two documentary executive producers in Montreal, one in Halifax, and one in Toronto. There will be a reduction, from nine to three positions, of English program documentary producers in Montreal and an increase from three, including one temporary position, to four in Toronto. Following these reductions in Montreal, employees concerned will be encouraged to retire or will be laid off.
Since the beginning of the year, we have written three times to the honourable minister, Madam Sheila Copps, to request a meeting with her and the NFB film-makers. Finally, in early May, just a few weeks ago, we received a letter from Ms Danielle May asking us to contact Mr. Andrew McDermott, special assistant to the minister. We have called Mr. McDermott many times and left messages, but he has never returned our phone calls.
We are here before you to ask you to impose a two-year moratorium on the implementation of this plan. We also request the recommendations from the NFB 2000 committees and all relevant studies. This will allow us to prepare our proposal on how the NFB can best survive the challenges it faces.
This is my brief statement.
[Translation]
We would be pleased to answer any questions in French or in English. We have with us experts from various departments of the NFB. I might answer some of your questions and let someone else answer the others.
The Chairman: It is up to you, Mr. Hoedeman.
[English]
It's completely at your own choosing. You can choose anybody you want to answer the question.
[Translation]
Mr. Leroux: Thank you for your presentation. I see you fully agree that the federal government has helped build this country by supporting the audiovisual industry, Telefilm Canada and the National Film Board. The Liberal Party of the day had strongly criticized the Conservative Party, who was in power at the time and wanted to cut in those areas.
I thank you for pointing that out, because it had been a formal commitment. Earlier on, however, Ms Macdonald, the chairperson, had mentioned two major factors that triggered the initiative, namely the current and future cuts in the Board's budget. Both those things led to this plan.
.1220
I pointed out to Ms Macdonald that there are contradictions between your brief and hers.
In Ms Macdonald's brief, it says there is a process involving close cooperation between management and employees, working groups, recommendations, information sharing. In fact, there seems to be a great deal of cooperation and transparency.
In your brief, however, it says a commitment had been made to not make any changes before they were approved by the board of directors. You say you never received those recommendations even though some of them have already been implemented. That is quite different from what it says in the text.
I would like you tell me whether I am right, because I am having trouble following all this. The two documents contradict each other as does the evidence presented by both witnesses. I am trying to make sense of it.
Mr. Hoedeman: It is true that at the outset Ms Macdonald told us there would be transparency. She wanted us to be involved in the entire restructuring process.
She was correct in saying that and that worked for a while, but since December, we have not been consulted on the restructuring plan that Ms Macdonald and the committees worked on.
We asked her to provide us with some material so that we could evaluate it. Since then, none of the committee members who worked on various facets of NFD production have been able to talk about it or share information.
Mr. Leroux: Among themselves?
Mr. Hurdman: Among themselves or with outsiders. Finally, on February 12, she gave us a complete document, including all the recommendations. She gave us three and a half weeks at most to prepare our response and to present counterproposals. But we were missing some essential details. We still haven't received them.
So she did give us the plan, but not the recommendations or documents that had been discussed by the committees.
Mr. Leroux: Fine. I would like to have some clarification on the events of February 12. You are telling me the plan is incomplete. I am trying to figure all this out. Why were you asked to make recommendations about the Francophone sector? In the file, the word "Francophone" is used. You say:
- ... she informs us that we can submit our own recommendations to the board of directors as long
as our recommendations translate into the same budget cuts.
- You also say that the section on French programming is missing from the incomplete plan that
was given to employees. You say that it didn't make any sense because NFB 2000 committees
worked full-time, with help from Ernst & Young, whereas you couldn't just turn around and
make your recommendations.
Mr. Hoedeman: English programming was already being restructured. As for French programming, the restructuring is not over yet.
I would like to give you more details, but Ms Louise Murchison can answer that for you.
.1225
Ms Louise Murchison (Director, Syndicat général du cinéma et de la télévision): When we received Ms Macdonald's plan, we knew we could present our alternative proposal to the board of directors, but we noticed that the part of French programming was missing. We therefore contacted the employer who told us he would try to send it to us before sending it to the board of directors, but we never did receive it.
So there is a huge section of the National Film Board we could not even discuss. Moreover, we never received the committees' recommendations nor the studies on which they were based. It was virtually impossible for us to present an alternative proposal since we didn't have the data. An if we had made some suggestions, they would not have been very valid because we did not have the data bank.
Mr. Leroux: I think that's clear.
Ms Isabelle Dupuis (Lead Hand, Inspection, Syndicat général du cinéma et de la télévision): I would just like to add one little thing. When the committees met, lab technicians were never consulted on how the lab should continue working. In fact, we had absolutely no idea what was being said about the lab. Mr. Villeneuve, the interim lab director, was the only person from the lab who was involved.
Mr. Leroux: Let me take this opportunity to ask you to give us a quick explanation of what took place within these four working committees and the way in which it is presented in Ms Macdonald's statement.
Ms Murchison: Four committees were set up and NFB staff members were appointed to them. They were not necessarily union members. There were branch directors, various managers, department heads and ordinary employees.
Mr. Leroux: So there were employees and members of management.
Ms Murchison: Yes.
Mr. Leroux: People from the Board.
Ms Murchison: Anyone who was an employee of the NFB.
Mr. Leroux: I see.
Ms Murchison: The Syndicat général du cinéma et de la télévision represents film makers and technicians but we had representatives in only three of the four committees. Judging by the lists I had, and I don't think there were any changes, there were only nine film makers and technicians among the 40-some members of this committee. Moreover, these people were required to observe confidentiality and we found out at the end of the process, that each committee, in handing in its recommendations, knew nothing about what the others were recommending. Each committee was isolated.
Mr. Leroux: I gather then that the internal process, as well as the airtight barriers between the committees, was decided by management without consulting you.
Mr. Hoedeman: Yes. Furthermore, management had retained the services of the consulting firm Ernst & Young to provide very specific directives. Production was to be preserved as long as possible and, at the same time, possible savings were to be identified. Anything that did not relate to these two aims was given no consideration.
Ms Murchison: It isn't the committees that came to the conclusion that a $20 million cut was necessary. They were told when they began their work that $20 million had to be cut and they had to find ways in which this could be applied to the NFB. This was confirmed to us by several members.
The Chairman: Before turning to the government party, I'd like to ask Mr. Hoedeman how many employees, among the non-administrative and technical staff, are union members and how many are not union members? Could you give us a rough idea?
Mr. Hoedeman: There are about 300 unionized members. Louise can give you more specific information about those who are not unionized.
Ms Murchison: Are you talking about the National Film Board or the committee members?
The Chairman: The National Film Board.
.1230
Ms Murchison: Unfortunately I cannot give you the precise number of non-unionized employees.
The Chairman: Are the majority of technical employees unionized?
Ms Murchison: Yes, the majority of technicians are unionized. Assistants, lab technicians, directors and editors are unionized employees.
[English]
The Chairman: Mr. O'Brien.
Mr. O'Brien (London - Middlesex): Mr. Chairman, I guess the only point I make is the obvious one, but it's still here in writing. It's the group trying to make various contacts with the former minister, now, and her assistants. I assume they're aware Mrs. Robillard has assumed those duties. I wonder if they've tried to reach her or her staff.
The Chairman: In fairness, I think Mr. Andrew McDermott is still on staff.
Mr. O'Brien: With Mrs.... Okay.
Mr. Hoedeman: We've received specific instructions to contact Mr. McDermott. From then on we're at the mercy of his department and the people who occupy the post to receive us.
[Translation]
The Chairman: Do you have any question, Mr. Arseneault?
[English]
Mr. Arseneault: You mentioned you have 300 members in your union.
Mr. Hoedeman: Yes, indeed.
Mr. Arseneault: Does that represent all the sites across Canada, or is that -
Mr. Hoedeman: That includes all the employees of the National Film Board, in Montreal and outside Montreal.
Mr. Arseneault: I'm sure you've been studying the plan of action for the NFB. Have you done a projection for how many employees would remain in your union after all the plan has been implemented? Do you have any indication of that?
Mr. Hoedeman: At the rate it's going we'll be losing a substantial number of people who are part of the union. First of all, as is laid out in the recommendations and in Ms Macdonald's plan, the creative staff will eventually all be put on contract - they could be long-term contracts, they could be short-term contracts - and working with freelancers. Then it's up to a certain period that these people will remain syndicated. With the closing of the laboratory, with the elimination of the graphics department, with the closing of the shooting stage, and with many more things to come, yes, our membership will be greatly reduced.
Ms Murchison: The lab will be closing. About 32 people will leave. Most of the location personnel have left already. We're talking about cameramen, assistant cameramen, sound persons, and electricians. That would be 15 to 20 people.
The graphic artists have already been laid off. There are about ten people. The sound stage is to be privatized; there are two people. with the producers in English production we are not sure exactly how many. We believe four or five people will leave. For the directors in English production we don't yet have the number from management for how many they intend to keep. For French production we don't know exactly how many producers and directors they intend to keep. In English and French production you have sound editors, picture editors who will be phased out.
Mr. Arseneault: You heard Ms Macdonald's presentation this morning - you were sitting here - and I'm sure you've seen some of the plans. Do you agree with the overall mission of the National Film Board as it was presented? I'm not talking about the cuts - put the cuts aside - but the overall direction we're going in with the emphasis on production.
Mr. Hoedeman: Specifically, the mandate of the National Film Board is one we agree on. Where we really differ, and where we have to be extremely prudent - and that's where the time factor is crucial - is in what we call le virage technologique. The Film Board traditionally is a film production institution. We're very clear that indeed video is the new format people use in many ways. Yet a film has to be made.
.1235
There are a lot of unknown factors in here. What is the durability of a video cassette? What is the durability of digital imagery? All those are very new technologies that have not been fully proven. They are totally and continually changing as the years are coming.
As well, it is extremely expensive when you set up a new direction and all of a sudden within a couple of years or even months that direction changes; it's not going to be digital this or video that any more. You're going into a new technology. All technical equipment instantly becomes obsolete, whereas film has a life expectancy of about 100 years. The film support is essential for maintaining our collection.
Mr. Arseneault: With regard to the overall plan, production at NFB is 85 productions a year at present?
Mr. Hoedeman: Yes.
Mr. Arseneault: After the plan has been implemented, the target and the production would be maintained at 85 if the plan is actually realized and everything. I know this is the plan. There would be no change in the number of productions, supposedly, if the plan were implemented as such.
Mr. Hoedeman: Yes, this is the aim, supposedly. Already the producers I've been in contact with find this extremely hard to cope with. There is a disbelief that this can be maintained, specifically when a lot of services will be cut. The charges that will be imposed upon us as film-makers, the money charges that used to be the in-house charges, will all now be privatized. The cost of our productions will become much more expensive.
In addition, although there is an increase from 51% to 65% in production, there is at the same time a $3 million cut in production. How then would it be possible to maintain 85 productions per year?
Mr. Arseneault: Thank you.
[Translation]
The Chairman: Are there any other questions? Mr. Leroux.
Mr. Leroux: In your conclusion, you say that you are appalled by the silence of management on the Juneau Report. As I already said, I can understand your point of view. Personally, I think there was already an order relating to the Juneau Report. In any case, right now it's gathering dust somewhere.
However, I would like to know whether you still maintain that the Juneau Report contains a number of factual errors that have not yet been corrected. For example, the average age was given as 57 when in fact it's 45 and it's also said that there were 61 permanent directors when in fact there were 42. You say that management never corrected these factual errors. Is this still the case?
Mr. Hoedeman: Yes, and in an interview with Mr. Juneau, I was unable to make my point. When I attempted to raise this question, I was cut off and given no chance to say what I had to say. On one hand, we were unable to intervene and on the other hand, we were never able to find out what the counter-proposals officially made by the National Film Board were.
Mr. Leroux: So the Juneau Report still contains mistakes that have gone uncorrected.
Mr. Hoedeman: Yes.
Mr. Leroux: That's surprising.
Before returning to the specific details and the basis for your objections to the moratorium, I'd like to mention that your document states that the administration has hardly been affected in spite of all the cuts. Management accounts for approximately 9% of the budget, that is $7 million. You say that the administration that existed for 700 employees has undergone no change although there are only 450 employees left. You seem to find this fact difficult to accept but management claims that this is a normal situation and similar to what is found in other areas.
.1240
Mr. Hoedeman: Yes. If you look at the percentage of the budget assigned to directors and senior management, there's nothing much more to add.
Mr. Leroux: It's simply a matter of observing that administration hasn't budged while all this cost cutting has been going on in the organization.
I'd like us to examine your analysis more closely. With respect to film, Ms Macdonald says that this can be contracted out to other companies. You say that this would be a problem because it may have far-reaching consequences. Is this still your official position?
Mr. Hoedeman: During the process, we observed that there was a trend in favour of replacing film as a support with video. So they quickly came to the conclusion that a lab like the one at the NFB would start costing a lot more money and that therefore it should be eliminated.
Isabelle Dupuis will give you some clarification on this point.
Ms Dupuis: On a number of occasions lab technical staff attempted to make suggestions to our technical services branch on different ways of ensuring the viability of the lab.
First of all, you should know what the position of the technicians is. As a public institution, the NFB has a duty to ensure that the images it creates will live for years and be accessible to future generations.
For several years now we have observed a trend towards video, not only for the distribution of videocassettes but also for filming. We attempted to sound the alarm and tell the technical management that it was our duty to always make use of film for shooting to ensure that the work would last over the years. That was our first position.
Secondly, management has never taken into account the huge amount of expertise to be found in the laboratory of the National Film Board, both in black and white and the technology that is being increasingly developed at the present time, particularly in the United States, Super 16. Super 16mm is a smaller and narrower film than 35mm. So it doesn't cost as much, it is more accessible for shooting and it lasts for at least 100 years.
You must have heard of a film that won a prize at the last Academy Awards called Leaving Las Vegas. This film was shot with Super 16. The technology is being increasingly developed. The NFB completely disregarded this expertise and all the equipment now available in the lab. We are the only ones in North America with full equipment for the whole process from shooting to the manufacturing of a 35mm copy, in other words we can do the direct blow-up process. We are the only fully equipped lab for this technology and are completely autonomous in this respect.
Since we are the only ones to occupy this niche, we made this request to our management and it was our intention to suggest to the committee that this aspect not be transferred to private companies because, on the one hand, they are not interested in it since capital costs are too high for them and also because they do not have trained personnel for this technology. We could compete on the North American market and even internationally.
The only other machine able to do the same thing is in France, it's been in operation for 15 years and works very well.
.1245
We know that we can go on to the North-American market and we don't want to prevent private sector development in areas that it has chosen but we do want to look after the requirements of the laboratory and keep it operating so that the NFB collection can benefit, we can continue to make use of black and white to safeguard our collection, we can produce new generations when what is referred to as the vinegar syndrome appears on old film and so forth. We must retain this expertise within the NFB since the Board as a cultural institution does have the duty to ensure the survival of its work. I must say that we were never given a hearing on this.
This is why we are defending the existence of the lab. We occupy a unique niche at the present time in Canada and North-America as far as this capacity is concerned. In Canada there's only one other lab that does black and white and they don't have our experience.
Mr. Hoedeman: Louise Murchison would like to add something.
Ms Murchison: I'd also like to mention that Mr. Robert Forget, Director of Technical Services, told us at a meeting that three or four years from now 80% of the NFB productions would be shot in video.
We also heard this morning that shooting and filming would be done entirely in video.Mr. Robert Forget said that three years from now 80% of the productions would be shot in video.
Mr. Leroux: Thank you for the clarification. Why was there no liaison with the committees and why were you not given a hearing in committee on this subject?
Ms Murchison: The technical lab staff, and I'm speaking on their behalf, was not consulted on the new NFB plans.
Mr. Leroux: Thank you.
[English]
The Chairman: Carry on, Mr. Hoedeman. Do you have a precision to make?
Mr. Hoedeman: The only precision I've made in regard to the committee... Mr. Ed Zwaneveld, who is the head of the research and development department at the Film Board, has made very extensive studies and collected much documentation on the durability of what exists in video and digital imagery. All this material has been indeed discussed at the committees, and he made certain recommendations that were not necessarily adhered to.
[Translation]
The Chairman: Are there any further questions?
Mr. Leroux: Yes, Mr. Chairman.
I'd like to come back to a comment made by Ms Macdonald concerning your position on the transfer of the English programming to Toronto from Montreal. I'd like to hear your point of view. Ms Macdonald seems to see this as a normal balance whereas you look at things from the point of view of economic problems and loss of expertise.
Mr. Hoedeman: We've always maintained, and that is why the NFB was established in Montreal, that the Board has a national mandate and this national mandate can be carried out in Montreal, Ottawa Toronto or even Iqaluit. It was decided that the headquarters would stay in Montreal but with this move to Toronto the notion of a national mandate will disappear. What will then see our regions and that means that the National Film Board, particularly with respect to English programming, will have a regional mandate aimed strictly at Ontario, Vancouver, Edmonton, Winnipeg, etc.
In such a case, Montreal will no longer have a national mandate covering all of Canada.
Ms Murchison: Let me add something, if I may. This amounts not only to a formal transfer but also to a transfer of powers since as we explained in our statement, Toronto is the only place that has its own producer whereas at one time there were producers in Halifax and Montreal.
.1250
Montreal and Quebec have now become the East for the NFB and English programming. There is an executive documentary producer who looks after Montreal and Eastern Canada and in Toronto there is an executive producer for Toronto and Ontario alone. This means a reduction in positions since there will only remain three documentary producers out of nine in Montreal.
In Toronto it's the other way around. There were two permanent producers as well as a temporary one, the temporary position will become permanent so all together there will be four producers instead of two.
Ms Macdonald mentions a transfer of $1 million but there are six fewer producers in Montreal and two more in Toronto. The problem is that there will be fewer and fewer film makers and editors in Montreal.
Our fear is that orders will start coming from Toronto for English programming. As a matter of fact, we've have discussions with Ms Macdonald about whether the English programming manager would have to move to Toronto and we were told that the decision had not yet been taken but that it was quite possible since a large part of the English programming production would be done in Toronto. But because the rest of the management is in Montreal, it might be awkward for the Toronto management to be so far away from the NFB headquarters that will still remain in Montreal.
So there's been lots of talk about this. It was finally decided that management would stay in Montreal and only the Toronto executive producer would be in Toronto while at the same time Montreal would become a region.
Mr. Leroux: We can expect that a certain number of logical consequences will flow from this.
Mr. Hoedeman: Ms Macdonald referred to it in a number of occasions and it is correct that Toronto will benefit from an allocation of $1 million.
Taking into account the entire NFB budget of $55 million, $1 million may not seem to be a huge amount but it should be understood that this money will be coming from the amount specifically allocated to English programming in Montreal. In other words, there will be more money for Toronto but less money for English programming here in Montreal.
Ms Murchison: We should perhaps mention that the Canadian Press issued a release on December 30th 1995 stating the following:
[English]
- Film and television production in Ontario dropped marginally in 1995 to $495.5 million,
according to the Ontario Film Development Corporation.
So in other words film and video production in Ontario amounted to $495.5 million.
The Chairman: I'd like to put one last question to Mr. Hoedeman.
[English]
The thrust of your brief is that there shouldn't have been a sudden transfer from film to video and we should really keep the film base and therefore the lab. That was quite clear in your brief. Given that cuts in the region of $20 million have been imposed on the NFB, how would you have done it to take care of this tremendous cutback? I just want to get the idea of how you reconcile the two.
Mr. Hoedeman: There are different ways to go about it. One can also say this is what the National Film Board should be, and if you cut it by $20 million, in the end what will be left of the National Film Board? I was opposed to that.
The Chairman: Yes. That we agree with.
Mr. Hoedeman: That's one way. The other way is, given that we are faced with those cuts, indeed it becomes an extremely difficult situation. Is it done necessarily to eliminate the lab? Is it perhaps possible to maintain the lab? Is it possible to have a changeover that takes place in a much more gradual way and also have proper studies done and proper studies in place to find out if indeed the changeover from film to video at the end will be less expensive or more expensive?
.1255
Personally, I believe all these are very short-term decisions that have been made, and I would not have followed that process. I would have listened very carefully and found out, yes, indeed, what is the Film Board really going to be, a film production institution or a video or disco production institution? You don't do your studies and find out it is necessary to go in such a radical way that there's absolutely no more room to interfere, to negotiate, to find other alternatives.
[Translation]
Ms Dupuis: I'd like to make just one point. When you said that the lab could provide expertise in the field of black and white and super 16 for the North-American and even world market, it's because this would bring in additional revenue to enable the technical services to survive, the relative value of our dollar being a distinct advantage to us in this respect.
I don't see why we wouldn't make the most of this advantage since there is a need for the service at the present time and we would not be competing with the private sector which has very little involvement, if any, in this market.
[English]
Mr. Hoedeman: I have another detail to add to this. If you look in detail at the amount of money we have to pay to Public Works for rental every year, it would perhaps have been possible to negotiate a better deal. Now, with the privatization of the shooting stage, all of a sudden this has become a reality, this has become possible. How come it was not possible for management to obtain that kind of deal and at the same time for the Film Board to have worked out ways to provide its services to the independent film-makers at nominal charge, and also to the private sector?
Now, there are certain details I cannot provide you with: is it legal, is it not legal. But one should definitely be able to look into this prospect, since the National Film Board, the way it always has been, is very unique in the world with its facilities. That includes not just the laboratory but animation, where we do a lot of our work with computer technologies. But computer technology is only part of the process.
The Chairman: Thank you.
[Translation]
Mr. Bélanger.
Mr. Bélanger: First of all, I'd like to react to a comment about the lab. If there is in fact a window of opportunity not being exploited by the private sector, this may be the opportunity you've been waiting for. A group of employees could come to an agreement with the National Film Board and make an arrangement.
Ms Dupuis: May I say something?
The Chairman: Very briefly, please.
Ms Dupuis: During the infamous February the 12th, some of our technical staff did indeed give thought to the possibility of exploiting this themselves but our own technical branch discouraged them from doing this with various arguments that I will not go into here.
Ms Murchison: Let me just complete my remark on the way in which Ms Macdonald's plan will affect film production.
A producer told me that the cost of her productions last year would have been 110% higher if they had been done in keeping with the new plan and new procedures.
Mr. Leroux: You say 110% more. The Macdonald plan says:
- To ensure that the NFB can attract the best film makers in the country and to allow for greater
flexibility, the production committee recommended the gradual phasing out of creative
positions over the coming years. Creative staff will work freelance depending on the projects to
be carried out or for a determined period that may be renewed.
In your opinion, which creative divisions will remain? Will there still be any or will there be none left?
.1300
Mr. Hoedeman: There will be some, particularly in animation. The department remains, but with the early retirement programs, we'll be able to gradually eliminate those people who will be replaced by contract workers. Of course, we always had, and always will have, a large and strong core of permanent creators at the NFB who've contributed enormously to making the NFB what it is today.
The freelancers we hire don't invest in the same way as the permanent creators who contributed to the NFB. That's one of my greatest fears. Personally, I've contributed a great deal to the NFB and I've always welcomed people with whom I could share my expertise as an animator, and I wasn't the only one. It's therefore extremely important that a strong core of permanent creators remain at the NFB.
We're also there to help young film makers to work, and not only on our own products.
Mr. Leroux: To conclude, do you still believe that a debate concerning the redirection and the restructuring of the NFB is important?
M. Hoedeman: There must be a debate, but it depends on political goodwill.
Ms Murchison: This is an institution that is 57 years old today, and I think that it is essential that the Canadian public has its say before the film board makes such significant changes.
Mr. Hoedeman: At the same time, we mustn't allow the National Film Board, which is a production house, to become a business establishment, like Téléfilm Canada.
The Chairman: Thank you very much, Mr. hoedeman, and my thanks to your colleagues.
[English]
Thank you very much for appearing here. We appreciate it.
[Translation]
We have two minutes left.
I'd like to tell you about our program. Next Thursday, we'll finish our consideration of Bill 216, Mr. Gallaway's private members bill. We'll have two witnesses. We'll hear the CRTC, which will be back to give us its opinion, and consumer groups who will also give us their viewpoint.
Mr. Leroux: They'll specify what the chairman hasn't specified?
The Chairman: No. The CRTC made a legal presentation.
Mr. Bélanger: Will you allow me to speak, Mr. Chairman?
The Chairman: Yes.
Mr. Bélanger: I have a question. In passing Bill 216, we restricted the CRTC's ability to impose new channels on basic service, which is to say RDI and Newsworld.
.1305
The CRTC told us Tuesday that it wasn't a problem. But Thursday, the representatives of the Canadian Cable Association told us that in adopting this type of system, we would preclude the CRTC from including new channels, and they suggested we make a small amendment and add the word package to the wording.
Therefore, my only concern, and it is a serious one, is that in passing this bill, we're stopping the CRTC from including at a later date, if it so desires, RDI and Newsworld from basic service.
Mr. Leroux: Very well.
The Chairman: Mr. Bélanger, to conclude on this matter, I'd like to say that the counsel contacted the various parties.
The CRTC let it be known that, following the representations of the cable companies officials, it is aware of the problem and it wants the lawyers to meet.
As a counterbalance, we advised the consumers, who will bring their own legal specialist to defend their point of view. At that time, we will be able to compare both viewpoints.
Mr. Bélanger: If we were to realize that the bill, as drafted, resulted in the consequences we dreaded, could we consider a special amendment to improve it?
The Chairman: I don't want to prejudge the matter. The members of the committee will decide on the results.
Here is the program. June 4, we'll hear the Museum of Sciences and Technology officials. June 6, the House will not be sitting. June 11, between 11:00 and 1:00, the President of Mexico will speak to both Houses together, and we won't be sitting that day either. So we have three sittings left, June 13, 18 and 20.
It was suggested that we hear the National Gallery of Canada's officials June 13, the National Capital Commission's June 18 and the National Battlefield Commission's June 20.
I would like now to suggest we work on the content, because we've already heard from many institutions. The first suggested option is to finish up with the institutions during the three final sittings.
I'd like to suggest two possible options to you. The first has to do with NAFTA. What is NAFTA's effect on Canadian culture? Can we obtain information on this topic? What can we do, or not do, concerning cultural industries such as the information highway? This is a very critical area these days, and we could take one or two meetings to consider it.
Now that the union question has been settled with Radio Canada and CBC, we could hear CBC officials for a meeting or two and take another meeting to discuss NAFTA.
It's up to you to decide. Unfortunately, there are very few of us today.
Mr. Leroux: Mr. Chairman, I'd like to ask my secretary colleague if the copyright bill will be tabled at the beginning of next week.
The Chairman: If it happens at that time, it will certainly be brought before us right away and I think we would then have to devote the final meetings to the copyright bill.
.1310
However, we have to hold public hearings and we won't be able to carry out the clause-by-clause consideration prior to these public hearings.
We decided with the researchers that if this were to happen at the beginning of June, let's say June 4 or at the latest June 13, we would use the summer to take in all the briefs so that they could be collated, transcribed, checked and submitted to committee members. As there will be many dozens of institutions and witnesses, it will be an enormous amount of work, which will take all summer. We could then start the hearings in September.
Mr. Arseneault: We could start planning a list of witnesses and MPs now.
The Chairman: I've already met with the clerk and the experts from the departments involved, the Departments of Industry and Canadian Heritage, and I asked them to draw up a list of all the organizations. This list will be sent to all the members of the committee, and I know that the Official Opposition and the Reform Party will ask that we add such and such a person.
I've been told that there are many institutions which have come together to form associations. Our colleague, Mr. Peric, has also asked to meet an individual who has a radio station. That's almost impossible. We'll have to see, because there will be all sorts of requests. To move the bill forward, we'll have to group together these institutions. Otherwise, we'll never finish.
That's what we foresee. I hope that we'll be able to send this list to the Official Opposition and the others very soon.
Mr. Arseneault: Mr. Chairman, if consideration of the bill moves along quickly, we could change our program as we go.
The Chairman: Yes. If the bill moves along, we'll be able to hear one or two organizations before the end of the session, but in September, you'll have forgotten what those people said. We must think about this. It's a decision which must be made by committee members.
Mr. Bélanger: For my part, I prefer the first option, which is to gather the representations during the summer, as they come in, and take the time to read them. There might be other documents or resumés later on. The hearings could be held in September or October, and we would then consider the bill clause-by-clause. Finally, the bill would go back to the House in November or at the end of October. I don't know what my colleague thinks of this.
Mr. Leroux: I agree, because it would be difficult for us to get together to hear the witnesses during the summer.
Secondly, I prefer to carefully review the briefs and be properly prepared in the Fall so that we can move things along quickly. Being well informed on the content of the briefs, we'll be able to share our opinions before hearing the witnesses. Perhaps we can even hold a meeting or two between ourselves, to pool what we have received and speed up the process.
Mr. Bélanger: I have a suggestion, Mr. Chairman. Would it be possible to hold a meeting with the department officials on the bill before the House adjourns in June? It would be a sort of introduction and we could reflect on it during the summer.
The Chairman: That's a very good idea.
Mr. Leroux: Yes, it's a very good idea. I would also like to question the Commissioner of the Copyright Tribunal concerning process. Of course, Mr. Chairman, it will be something new to him. That tribunal has never imposed neighbouring rights. He knows the Copyright Tribunal, because he makes the rulings, but this process will be completely new to him and I'd like the committee to discuss it with him to see how he perceives things. He's the one who will have to set the rates.
The Chairman: It that's the case, yes.
Mr. Bélanger: In closing, Mr. Chairman, I'd suggest we double the number of sittings. June 4th, instead of only hearing from the Museum of Sciences and Technology, we could also hear from the National Gallery, and June 13, we could hear the National Capital Commission and the National Battlefields Commission. That would leave us the 18th and the 20th.
But that wouldn't settle the matter of NAFTA or Radio-Canada. I totally agree with you that there should also be a meeting concerning the repercussions of NAFTA, and perhaps even concerning the bill we'll have before us.
.1315
The Chairman: True. So I don't think we should have to hold hearings at this point. Do you have any idea, Mr. Arseneault, where the bill is at now and when it will be brought before us?
Mr. Arseneault: Last I heard, it was to be introduced next week. Debate on Second Reading will start, perhaps on Friday. It depends on the agenda of the House.
Mr. Leroux: I think it will come up following Thursday's question period.
The Chairman: So we will have to come back.
Mr. Leroux: I will give the copyright bill priority, even though I have lots of questions to ask of the Museum of Sciences and Technology and the National Gallery.
The Chairman: Excuse me a moment.
[English]
The Clerk of the Committee: Unfortunately, there's something called the rule of anticipation. You breach the privileges of the House of Commons by anticipating what the House will do. I think we would have to be very careful about having witnesses before we've actually received the bill from the House.
The Chairman: Agreed.
The Clerk: We have to be extremely careful, and this includes, unfortunately, the department.
The Chairman: I agree with that.
[Translation]
To settle the matter, I'd suggest the following: June 4th, we hear the Museum of Sciences and Technology, as well as the National Gallery, it they're available. In any case, we'll see both organizations.
The Clerk: Yes, two of the four.
Mr. Bélanger: The National Battlefields Commission.
The Chairman: Two of the four.
Mr. Bélanger: I'll have the feeling that the National capital is the battlefield.
The Chairman: June 4th, we'll try to hear two organizations, then we will recess from June 6th to the 11th. I'd like to keep June 13th open, because the bill may be brought before us. As soon as we're sure of the bill being brought before us, we'll call on the department people to come June 13th to give us information on the bill and answer our questions. We'll also call on the Commissioner of the Copyright Tribunal. Is that what you want?
Mr. Leroux: The Commissioner of the Copyright Tribunal.
Mr. René Lemieux (Committee researcher): There's confusion because we were talking about the Human Rights Commissioner before.
Mr. Leroux: This one already sets copyrights, but he never dealt with neighbouring rights.
Mr. Arseneault: It wouldn't be able to answer because the act hasn't been passed.
Mr. Leroux: That's why we're calling him as a witness.
The Chairman: Agreed, as a witness.
Mr. Bélanger: We should also think about Radio-Canada.
The Chairman: I'll ask the researcher and the clerk to get in touch with all of you, and we'll try to get a rough idea of our work as a result.
Mr. Leroux: Mr. Chairman, following this morning's work, I'd like to table a motion which could be debated at the next meeting.
I'd like to table the following motion:
- Given that the government has not yet responded to the Mandate Review committee's report,
the Juneau Report, and given that we don't have any overall plan for the new mandates
concerning the National Film Board, the CBC and Téléfilm, the Canadian Heritage Committee
recommends that the NFB's budget remain at the same level as in 1995-96, until the
government publishes its response to the Juneau Report and that response has been debated in
public.
.1320
The Chairman: Mr. Arseneault, the clerk has assured me that the motion is admissible.
Mr. Arseneault: The estimates are there and the cuts too.
The Chairman: May I suggest something?
I'll ask the clerk to see if, given that, the motion is admissible. If you decide, upon reflection, that it is admissible, we'll take for granted that the motion was tabled today. Do you agree?
Voices: Agreed.
The Chairman: The meeting is adjourned.