We know that OMNI plays a vital and essential role in reflecting and connecting Canada's multicultural and multilingual communities. We have had the privilege of working alongside ethnocultural communities and organizations for over 30 years and believe we have made a meaningful contribution to the engagement and integration of those communities in Canadian society. We remain an important partner to many different ethnocultural communities through direct investments in local programming and marketing, and participation in festivals, events and on diverse boards and committees.

We take this role seriously and believe our record of performance over the past 30 years has exceeded Canadian ethnic service standards in terms of the quantity, quality and distribution of Canadian ethnic programming available to consumers.

In fact, until two years ago, when we gave over $1 million to an independent community group to launch an ethnic television station in Montreal, we were the only ethnic over-the-air television broadcaster in Canada. We believe we have upheld that responsibility well, despite troubling financial challenges.

When I was appointed head of OMNI earlier this year, I was given a mandate to refresh the OMNI brand to make it more relevant to the next generation of ethnocultural viewers and to stem its financial losses to a break-even position. The mandate wasn't driven by profits. It was about making OMNI self-sustaining.

OMNI supports three types of Canadian programming: in-house local production, which included our language newscasts and information programs; national independent productions; and local independent production.

Local in-house production is by far the most expensive of these programming categories, since the station bears 100% of the cost and risk. In the last broadcast year, the language newscasts we produced cost over $9 million on an unallocated basis—$11.7 million if you include overhead costs—and garnered only $5.8 million in revenue. After several years of losses, it was clear that we had to find another more sustainable model for our in-house production.

OMNI also makes significant investments in ethnic drama and documentary programming. Since 2002, OMNI has committed and spent almost $65 million in the licencing and development of Canadian ethnic and third-language independent drama and documentary productions through tangible benefits contributions. With this investment, which is unmatched by any other Canadian ethnic broadcaster, OMNI has played a foundational role in the creation of this type of content and in fostering the Canadian ethnic independent production sector.

Specifically, this investment has produced over 600 hours of ethnic and third-language dramas and documentaries. This year we're very proud to launch OMNI's first serialized drama, Blood and Water, which was shot in Vancouver and Toronto, in Chinese and English. We are very excited about this project and hope it will resonate with current audiences and attract new viewers to OMNI.

The rest of our Canadian ethnic programming is composed of local, independent production. We work with 49 local ethnic producers in 48 languages across all our OMNI stations. We use a model where we provide local ethnic producers with airtime, and in return we share the revenues generated from advertising in the program. This model has worked well and provides an important outlet for local expression, but unfortunately, revenues from this type of programming will never be able to sustain our in-house production investments. Our in-house production remains subsidized by our foreign-acquired programming.

In setting out to refresh the OMNI brand, we sought input from OMNI staff, including its community liaison officers. We spoke with our regional advisory councils, and we conducted a number of strategic reviews, all intended to identify the right programming strategy and business model for OMNI going forward. The feedback we received was that OMNI's programming was not highly visible. It was seen as tired and outdated, particularly by young viewers, who are the key demographic for advertisers.

Moreover, our market research indicated that where at one time new Canadians came to this country knowing only the language of their country of origin, many now come to Canada proficient in either English or French. This research also indicated that more and more Canadians are looking to alternate online sources for their news programming. This trend has made it even more difficult to attract broad audiences to our traditional newscasts. All of this suggested that a new approach is required.

I'd like to make clear that this wasn't just about cutting costs to save money. It was really about reinvigorating the OMNI brand and its programming. We simply saw a better opportunity to engage a broader audience on local issues with new local current affairs programs. Unlike newscasts, current affairs programming has a flexible format that allows members of the community to engage and interact on local issues. It also provides a greater opportunity to delve deeper into issues, exploring a variety of different angles and perspectives, which is something formal newscasts cannot do.

Contrary to what you may have heard, we have not reduced the number of languages nor hours of local programming OMNI offers. The national Mandarin, Punjabi, and Cantonese newscasts have all been replaced with local current affairs programs in those languages, which we believe will better resonate with local audiences. In most cases we've kept the same on-air talent, which preserves the trust and continuity our people have built with audiences over many years. Our Italian newscasts will be replaced with novellas and a new Italian lifestyle program that is scheduled to launch this fall. We're also extremely excited to launch a new national Punjabi lifestyle program called Kitty Talk, which will feature three dynamic women as they discuss the issues of the day that are important to their communities.

These are just a few examples of OMNI's new programming direction, which is based on a more sustainable production model, and is designed to attract new and broader audiences. While there is no guarantee this new approach will succeed, we are very much encouraged by the positive feedback we have received from viewers and community organizations about this new strategy.

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