Kevin Shea, Part 3: Foreign Investment and Internal Partnerships

Interviewed by Fil Fraser at Banff World Media Festival on June, 2011

Fraser. If we open up foreign investment regulations, what if Shaw and Rogers decide to sell a substantial stake in their business, take the money and run?

Shay. In all fairness, as far as those two companies are concerned, the families don't need much more money than they have today. They won't spend it for the next 20 generations. But, it is fair to say that the high fees that Canadians pay for mobile communications online, for example, is a direct result of the protective environment that we’ve created, albeit with good intent and great planning; it’s a very anti-competitive set of circumstances. And there appears to be no change happening there despite the fact that we already have so much foreign ownership in our system: the devices are owned by international companies, but the licenses aren't. Open it up.

F. What direction should the regulators take?

S. I think this current government has already made a decision. Look at the Wind Mobile decision; they went out on a limb in a minority government to say that they wanted foreign competition. We might debate about whether their ownership was totally within the guidelines, but I the hint was dropped that they’re no longer as exclusively supportive of the likes of Bell, Rogers, and Shaw as were previous Liberal and Conservative governments. There's been a very clear signal sent. They plan to open this up. Now, we have diversified ownership; those three companies own our private broadcasters and telecoms. My sense of this government is that, when the likes of CTV and the remnants of CanWest were bought up by these huge companies, they felt it just made for bigger businesses. They're smart people.

Let's open it up for the benefit of the consumer. I think it's as simple as that; it's not overtly complex. I haven't looked at stats recently, but I don't think that very much has actually changed. The bulk of viewing is not to Canadian, truly homemade, dramatic, entertainment content; it’s to news and public affairs. So we've had 40-50 years of significant investment by government to create a sector. Maybe it's time to open it up.

F. Where do you see the CRTC five years from now?

S. Maybe serving a somewhat similar function to the FCC: regulating CanCon and the domestic market. They ensure that, from a purely technology standpoint, there is no interference of signals. However, I do think we need some semblance of content control. I just don't know what that is in this day and age. What I do think is that the rules we have are outdated, not practical. It's no one's fault. It's not the CRTC's fault. This medium has changed so quickly that it's time to review and renew it so that there is a definite place for Canadian suppliers and producers of creative content. We need to ensure that balance in the system. I don’t know what that is. But we have smart people around.

F. Compare CMDC with La SODEC.

S. In November [2010], we had the first meeting that's taken place in probably 15 years between the two organizations. We went to Montreal and then, the executive of SODEC came to Toronto two months later.

F. That's groundbreaking.

S. Yes, with the simple notion that there are many common interests and objectives, but there’s been no communication. Politically, there are several areas where we’ll never agree. But there's a list of things we could and should be working on together. Our two organizations are now working on them and I’ve great hope that we’ll find more synergy and opportunity together than apart.

As Chair of OMDC, I am not a bureaucrat; I'm an independent chair and don't work for the Government of Ontario. It's an appointed position that allows me the opportunity to speak to the various ministries in Ontario. For whatever historical reasons, this communication with La SODEC had never taken place. They have a great CEO there… you know him well, François Macerola. The minute I phoned him and said I thought we should be talking to one another, he said he wished he’d made a phone call first. But it didn't matter. “Come and see me.”

F. We can only dream of French films being marketed in English Canada and vice versa. Is that a marketing challenge?

S. It starts first with communication and cooperation. We're all in the same game at the end of the day. I honestly don't care if Québec wins a big foreign production deal over an Ontario bid. The spillover will always come to Toronto and vice versa. In the last five years, there's been more and more cooperation between Montréal-based companies and Toronto-based companies. And that's a natural market order. In terms of us co-marketing our collective assets, talents, facilities, studios, and so on, it doesn't bother me that Québec wins in a competition, because we'll win the next one and will both benefit.

F. And be in the game…

S. And be in the game. But, when it comes to governments putting money in, and governments are competitive in this country, when it comes to the whole aspect of digital change, it makes much more sense in some areas to be working together. I spend a lot of my time with young startup companies; today's 25-year-old entrepreneur would be more than happy to walk across the street, and meet and sit with his competitor. Why? Because, if they both benefit from cooperation, they both win. Whereas, our dads would never have walked across the street! I have spent more time in the last couple of years introducing “ayatollahs” to other “ayatollahs” whom they’ve never met. If, in doing business differently, they benefit, we all win. And between provinces, I think we have to be thinking along those lines. That's tough.