Péladeau rejects CBC’s charges of federal subsidies, calls them ‘dangerous’

OTTAWA—CBC/Radio-Canada’s suggestion that Quebecor Media Inc. has received more than half a billion dollars in direct and indirect federal subsidies over three years is false and even “defamatory and dangerous,” Quebecor CEO Pierre Karl Péladeau told a parliamentary committee Thursday morning. “Carrying that kind of false and malicious information, I find that completely unacceptable,” Péladeau told the House of Commons ethics committee when asked about allegations posted on the public broadcaster’s website. “I found that completely defamatory and dangerous.” Called to the committee for its study on a dispute over what CBC records should be made public under access to information laws, Péladeau found himself on the defensive against opposition MP questions related to the CBC’s allegations. Those allegations said that over the past three years Quebecor and its subsidiaries received $192 million in broadcasting subsidies, $13 million from the Canada Periodical Fund and an estimated $333 million in discounted broadband spectrum during the government-run 2008 Advanced Wireless Services spectrum auction. “This is completely ludicrous. I’ve never seen something so ridiculous,” Péladeau said of the suggestion that the company received federal subsidies during its purchase of spectrum blocks reserved for new entrants in the 2008 auction. “We were the company in Canada that fought for competition in the wireless business.” Prior to the 2008 auction, Quebecor joined other new entrants and small telcos in calling on the government to set aside some spectrum for small players. Quebecor spent $540 million to acquire spectrum at what the CBC says was a discounted rate. “QMI bought $540 million in set-aside (restricted) spectrum, but competitive (non-restricted) blocks of spectrum in the same markets sold for a 61% premium,” a document posted on the CBC’s “Get the Facts” website said this week. Péladeau rejected the suggestion that this amounted to $333 million in savings at taxpayers’ expense. “There were no subsidies at all,” he said. “We paid $555 million to buy the spectrum.” When asked about a series of letters the CBC said he had personally written to Prime Minister Stephen Harper and other government officials “to complain that Radio-Canada does not spend enough money advertising in his newspapers,” Péladeau said the letters were primarily directed towards CBC president and CEO Hubert Lacroix. “Would you share with us any of the letters you sent to Prime Minister Stephen Harper complaining about the fact that you’re not getting enough advertising dollars from your number one competitor?” Charlie Angus, a committee member and the NDP ethics critic, asked. “The letter that I sent was to the CEO of Radio-Canada, mentioning that Sun Media and all our properties ... are the ones that would be able to as much audience as possible,” Péladeau said. “Did you write to the Prime Minister about this issue?” Angus pressed. “I sent him one letter mentioning that I had been talking to and sending letters ... In fact there were 17 letters being sent to Hubert Lacroix.” As the president and CEO of a publicly traded company, Péladeau said he had a responsibility to Quebecor shareholders to make the company profitable. This included pursuing potential major advertisers, such as the CBC, he said. Responding later to a question from Liberal MP Scott Andrews, Péladeau said Quebecor does not spend any money advertising with the CBC or Radio-Canada. “We don’t need CBC/Radio-Canada to reach the audience we’re looking for,” he said. Péladeau said his company is now reviewing whether it has legal recourse to respond to the CBC’s web posting. Quebecor's media outlets have engaged in a prolonged battle to secure a laundry list of potentially embarrassing CBC records since legislative changes in 2007 brought the Crown corporation under federal access to information laws. Earlier this year, a federal court judge rejected the CBC’s position that it alone has the right to determine which documents should be exempted from the Access to Information Act because they relate to its journalistic, creative or programming activities. The CBC is now appealing the court decision which ordered it to hand over the requested documents to the federal information commissioner to determine which are exempt. The ethics committee is also studying the issue, with Lacroix scheduled to appear as a witness next Tuesday. There is little love lost between Quebecor and Radio-Canada, which compete in Quebec's French-language broadcasting sector. Quebecor's QMI news agency and its all-news Sun News Network run a regular feature called the “CBC Money Drain.” During the committee meeting Thursday, Péladeau also defended his company against accusations that some of the more than 800 access-to-information requests Quebecor and its journalists have filed about the CBC seek information that would give them a competitive advantage. He said all of the requests were filed with the intent of informing the public of how the Crown corporation spends the $1.1 billion it receives each year in appropriations from Parliament. Some of the requests, he said, pertain to vehicles the CBC purchased, its outdoor advertising expenses, and the cost of its 75th anniversary celebrations. He noted that none of the requests seek information about confidential journalistic sources, which would be exempt under the Access to Information Act's section 68.1. Péladeau added that it is unreasonable to suggest competing news agencies cannot file information requests from the CBC. “If we were to follow this logic, no one would be able to investigate Radio-Canada other than themselves,” he said. “This is something that obviously will not happen.” He also suggested that Canada’s other large media organizations are unlikely to take any action that could hurt their commercial relationships with the CBC. He pointed to an arrangement Postmedia Network Inc.’s National Post newspaper has with the CBC to exchange sports and financial content on their websites, and to a deal the CBC reached with Bell Media Inc. to issue a joint-bid for exclusive Canadian broadcasting rights for the 2014 and 2016 Olympics. Péladeau added that The Canadian Press news service counts the CBC as its largest customer and that the largest stakeholders in the news service’s controlling company, Canadian Press Enterprises Inc., are two other prominent news sources, The Globe and Mail, and the Toronto Star’s controlling company, Torstar Corporation. “You’re not going to spit on the hands that are feeding you,” he said. nkyonka@thewirereport.ca

Péladeau rejects CBC’s charges of federal subsidies, calls them ‘dangerous’

Broadcast | October 20, 2011

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