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pierre karl péladeau

Pierre Karl Peladeau, once again joining Quebecor as CEO, will have scored another easy profit for himself and fellow shareholders if Ottawa approves Quebecor’s $430-million sale this week of unused spectrum in Ontario, B.C. and Alberta to Shaw Communications.Christinne Muschi/The Globe and Mail

Pierre Karl Péladeau is the president and chief executive of Quebecor Inc.

Dear Prime Minister,

In several media appearances following the tabling of your government's new cultural policy, the Minister of Canadian Heritage made a number of comments about our Vidéotron subsidiary that we can not allow to go unanswered.

The most surprising of these was the assertion that Vidéotron makes no contribution to the funding of culture. In fact, Vidéotron has contributed more than $1.5-billion over the past five years to Canadian cultural content of all kinds.

That amount includes the fees paid to Canadian specialty channels that produce cultural content, spending on community television and the $117-million we contributed to the Canada Media Fund during that period. It also includes the millions spent by Club Illico – often referred to as Québec's Netflix – on original productions such as Blue Moon, Victor Lessard and L'Académie, creating work for hundreds of local artists and artisans. We might also add the $2.9-billion in sales and income taxes generated by Vidéotron's activities that were handed over to provincial and federal governments over the past five years, and served to fund government programs of all types, including in the cultural sector.

Vidéotron has made these expenditures while having to take on new competitors such as Netflix, which, with the approval of your government, charge no sales tax.

Moreover, those same competitors take up much of the bandwidth on Vidéotron's wireline network, at no cost to them. Without that bandwidth, they would have no business model.

Contrary to what your government has been suggesting, we cannot monetize the increased traffic because data usage is included in flat-rate Internet plans, many of which allow unlimited usage. This is why our average revenue per downloaded megabyte has been decreasing steadily for years.

At the same time, the dramatic, across-the-board increase in data usage is forcing Vidéotron and all Canadian network operators to make significant investments in infrastructure. Over the past five years, Vidéotron has spent $1.1-billion to increase the speed and capacity of the wireline network that our creators, businesses and the public use every day.

In short, we find it difficult to understand why members of your government would choose to target a company such as Vidéotron, which makes an outstanding contribution, by every conceivable metric, to the creation and dissemination of our culture, and which, through its best-in-class networks, makes it possible for the full potential of digital life to be realized.

It is surprising, to say the least, that your Minister of Canadian Heritage would make such inaccurate statements about local companies while praising foreign giants that contribute little or nothing to our economy. Suggesting that we should do more, even as your government gives those same foreign giants a free pass, is baffling.

You have said loudly and clearly in the House of Commons that, in keeping with your election promises, you don't want to force Netflix to charge sales tax, as doing so would increase the tax burden on the middle class. However, requiring an additional contribution from Canadian integrated telecommunications companies would have exactly the same effect.

With the stage set for vital discussions about overhauling the Broadcasting Act and the Telecommunications Act, Quebecor intends to highlight the importance of having strong local cable and satellite companies, broadcasters and telecoms if we are to retain control of the levers we need to maintain our cultural, technological and economic sovereignty. Despite everything, we still believe your government shares those objectives and we therefore plan to approach the upcoming discussions in a spirit of openness and collaboration.

Pierre Karl Péladeau

President and CEO

Quebecor

Heritage Minister Melanie Joly announced a $500-million deal with streaming giant Netflix on Thursday as Ottawa unveiled its long-awaited cultural strategy. The NDP questioned whether the plan would 'protect Canadian content.'

The Canadian Press

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