Thank you, Madam Chair and members of the committee, for inviting us here to discuss the current challenges facing local media.
My name is Colette Watson, vice-president of television and broadcasting operations for Rogers Media, and with me is Susan Wheeler, vice-president of regulatory affairs for Rogers Media.
At Rogers, we are committed to innovation and the celebration of Canadian culture. It has been our legacy ever since Ted Rogers revolutionized radio in this country with the first FM signal. We honour a diversity of voices by delivering content to Canadians that enlightens, informs, and entertains.
On the local level, we operate under the City brand in seven markets across the country–Toronto, Vancouver, Calgary, Edmonton, Winnipeg, and Montreal, and in the province of Saskatchewan–and operate 51 local music and news/talk radio stations across Canada.
We also operate five local multicultural TV stations under the OMNI brand in Toronto, Vancouver, Calgary, and Edmonton. At OMNI, we provide programming to more than 40 distinct ethnic and cultural groups in more than 40 different languages.
Across our cable footprint in Ontario, New Brunswick, and Newfoundland, we have 41 community TV channels offering coverage of local events and issues in both official languages. In fact, in 15 of these 41 communities, Rogers TV is the only source of local TV news and information content, and last year, close to 30,000 community groups participated in the creation of this community content.
As you have no doubt heard throughout these hearings, the Canadian media industry has been in a state of transformation for a few years. The economic model for local television is under significant pressure as advertising dollars shift from linear to digital platforms. We've had to adapt to the new realities of this changing economic model over the last few years, not just for financial reasons but also to meet changing audience demands and trends. As Canadians we lead the way in data consumption globally. We want to consume content where we want, when we want, and on the device of our choosing. There is no doubt the consumer is firmly in the driver's seat.
As broadcasters, we must move with this changing tide and the successful companies will be the ones who adapt the fastest. While the industry is still in a state of transition and new business models have not yet been firmly established, we believe there are three immediate actions the government and its legislative arms can take to help navigate the digital transition.
One, fully compensate local broadcasters for costs associated with the government's plan to repurpose the 600 megahertz spectrum and create a fund for local programming with a portion of the auction proceeds.
Two, modernize the government's funding tools and programs to reflect Canada's digital reality.
Three, ensure sustainable financing for local news and information programming resulting from the CRTC's review of local and community television programming.
First, allow me to give you a sense of the economics of the broadcast industry today. Based on the CRTC's latest statistical and financial report on conventional television, the private over-the-air, or OTA, television sector in Canada has experienced a 16% decline over the past four years.
In 2014, profits before interest and taxes, or PBIT, for private local television stations dropped industry-wide to minus $138.7 million, and the PBIT margin decreased to minus -7.7%.
As the smallest conventional television group, Rogers stations have been disproportionately impacted by this decline with a PBIT margin of minus -37.2% in 2014.
For niche stations like OMNI, the situation is dire. Since 2011, OMNI has experienced a cumulative decline in revenue of 74%. That is a drastic and unsustainable decline, a decline that has forced us to take costs out of the business in an effort to keep these stations on the air. While these challenges are real and significant, we do remain committed to finding a new business model for the production and dissemination of local news and information programming. One that reflects how, when, and where Canadians consume the content they trust and rely on.
The 600 megahertz spectrum is currently occupied by local OTA television stations. In August of last year the Department of Innovation, Science and Economic Development issued its decision to repurpose a good portion of this spectrum band for mobile broadband use.
Rogers supports the repurposing of this spectrum, but we have deep concerns about the impact it will have on local television. We have expressed these concerns to the department directly and through our trade association, the Canadian Association of Broadcasters. It is important for this committee to know that the cost of relocating to new channel allotments will be significant and, in some cases, totally prohibitive for certain broadcasters.
For us alone, we estimate the cost to relocate our stations to be over $20 million at a time when we have yet to fully depreciate the major investments we made to convert to digital transmission in 2011. On an industry basis, the cost could be anywhere from $520 million to $1.25 billion, depending on the complexity of the transition. The timing, quite frankly, couldn't be worse.
Given the fragile state of the OTA television sector here in Canada, and that the auction for this sector will likely generate more than $5 billion in revenue, we urge the federal government to fully compensate affected broadcasters for their relocation costs, and create a fund for local television programming from a portion of the proceeds of this auction.
South of the border, we note that the U.S. Congress has already agreed to compensate local broadcasters in full for their relocation costs. This was made clear to local broadcasters well before the commencement of the U.S. auction in March of this year. Unfortunately, we have yet to receive a response to our requests for compensation. We hope this committee will help bring attention to what risks being a very serious and immediate threat to the availability of local television in Canada.
Our second proposal is the suggestion that as part of the minister's upcoming digital consultations, this committee recommend a full review of its current cultural funding tools and support programs. The policy objectives of the funds are still very valid, but the framework is outdated and has not kept up with the rapid change of pace in the industry. We would welcome the opportunity to participate in such a review.
Finally, our third proposal is one we presented to the CRTC as part of its proceeding on local and community television programming. In that proceeding we proposed a model that would allow companies like Rogers, Quebecor, Bell, and Shaw/Corus that own both cable and local television stations to reallocate funding from the community channels they operate in major markets towards either OTA stations or community channels in smaller markets. This would, for example, allow us to reallocate funds from our Rogers TV station in Toronto, a market that is well-served by local broadcasters including City and OMNI, and direct these funds to a small market like, say, Bathurst, New Brunswick. Bathurst is a bilingual community that is not currently served by a local OTA station, and this would ensure that people there are given access to truly local news and information in both English and French.
We recognize that these suggestions are not long-term solutions to the current challenges facing local television, but we believe they do offer local broadcasters an immediate path that can help navigate what are currently very turbulent and financially difficult times in the traditional media space.
We hope our suggestions today will encourage further discussions on the development of new and creative policies that will result in the continued availability of local content in markets large and small across Canada.
Thank you, Madam Chair. Good morning everyone.
My name is Pascale St-Onge, and I am the president of the Fédération nationale des communications, or FNC. I am joined today by my colleague, Pierre Roger, corporate secretary and treasurer of the FNC. We appreciate the opportunity to speak to the committee about news and information and, more specifically, about the future of regional news.
The FNC is a labour organization affiliated with the Confédération des syndicats nationaux, or CSN. The FNC represents more than 88 unions and some 6,000 workers in the communications and cultural sector. Present in most of Quebec's mainstream media outlets, the FNC represents the vast majority of staff and freelance journalists in the province.
We also have unions in Ontario and New Brunswick. Radio-Canada, La Presse, Groupe Capitales Médias newspapers, Le Devoir, Le Journal de Montréal, Transcontinental, TVA, Cogeco, and L'Acadie Nouvelle are just a few of the media outlets in which we are present. The people we represent work in print media, TV and radio, and increasingly, digital media.
In our brief, we discuss the numerous issues facing the news and information industry. On a structural level, the traditional media is experiencing financial trouble that is hindering its ability to carry out its first mission: to inform. Clearly, the advent of the Internet and the technological developments since have made it easier for people to access information and provided opportunities to significantly grow audiences.
The trend towards the use of digital media and social networks, which are free for the most part, is constantly on the rise. And these sources of information, which deprive traditional media organizations of considerable revenues, are, above all, dissemination platforms, as opposed to content producers.
Not only does this reality challenge the traditional media business model, but it has also given rise to a news and information crisis that could eventually lead to a democratic crisis.
In addition to these dramatic shifts, the industry's pervasive media concentration and convergence practices are jeopardizing the quality and diversity of information by turning it into an increasingly commercial commodity. All too often, spot news, fluff stories, and sensational headlines are what appeal to audiences. This type of information is intended, first and foremost, to entertain. The focus is on growing the audience at all costs, because that is the only way to make more money.
It goes without saying that such an environment undermines the work of journalists. Being forced to multi-task and operate on multiple platforms has led to a much heavier workload for journalists. For their part, freelance journalists have no resources at their disposal to negotiate working conditions, in light of the high level of media concentration in the industry. Now more than ever, their independence and integrity are under tremendous strain.
As part of this consultation process, the FNC encourages our political leaders to redefine their vision of the media. Our various levels of government have a duty to intervene to safeguard and improve information accessibility, quality, and diversity, and most western nations are in the process of doing just that.
We would like to submit to the committee 10 recommendations that, we believe, will provide the support needed to ensure that the media can continue to play its role as the fourth estate. Without further ado, here they are.
First, the FNC believes that it is now necessary to implement funding measures to support the production of high-quality and diverse information and news in Canada, as well as Quebec. All funding options should be considered. We are especially in favour of a payroll tax credit. Such a measure would allow media companies in financial trouble to keep their staff or, even better, to hire journalists to improve information plurality and diversity. Similarly, the measure would provide support to hire more advertising representatives or new technology experts.
Second, the federal government should set up a permanent fund to support local and regional programming and production, to expand the regional media footprint. It is imperative that funding be allocated to the production of regional news and information.
Third, CBC/Radio-Canada should be involved in producing quality local and regional information and news content. It is crucial that the crown corporation strengthen its presence in the regions. In order to do that, the public broadcaster needs considerably more funding and, above all, a much stronger commitment to and awareness of regional realities on the part of its leadership.
Fourth, to give Canadians better access to this high-quality and diverse news and information, particularly in remote regions, it is crucial that the government recognize high-speed Internet service as being an essential service.
Fifth, the government should introduce grant programs to support digital platform innovation. Similar programs are in place for cultural enterprises. Many small media organizations cannot afford to build better online applications. As audiences increasingly turn to the web, media outlets need to equip themselves with appealing, innovative, and effective platforms in order to attract those audiences.
Sixth, given the period of upheaval that our media companies are going through, it is incumbent upon government leaders to create a task force to examine the regulatory framework that should govern multinational web companies. The purpose is to identify the right tools to protect the production of local content in the digital era. It is also incumbent upon government leaders to impose certain requirements on these Internet giants, who enjoy lucrative advertising markets, both locally and nationally. They should have to contribute financially to the production and dissemination of high-quality and diverse news and information content in connection with those markets. They should also have to follow the tax rules in force in the countries where they operate.
Seventh, the federal and provincial governments have a duty to immediately address the issue of media concentration and convergence rife in the industry. Clear restrictions need to be imposed on media companies in order to limit their ability to employ sweeping practices that hurt information and news quality and diversity. The media should be subject to stricter regulation, particularly as regards its responsibility to inform. Simply put, government leaders must address the urgent need to protect the diversity of voices, not just locally, but also regionally and nationally.
Eighth, the FNC-CSN believes that the government should undertake an in-depth review of the CRTC's role and governance. In our view, the rules governing the appointment of commissioners should be reviewed. Political partisanship should not determine who sits on the CRTC. The Harper government's direct involvement when industry players asked the CRTC to regulate Internet giants was especially disgraceful. The CRTC has a duty to ensure that licence holders comply with the conditions imposed on them, especially in the case of news and information. The CRTC should also be involved in the discussion on how to legislate and regulate the Internet. Similarly, it should examine ways to protect the local and national media industry.
Ninth, it is our view that governments should make an effort to spend their advertising dollars on Canadian and Quebec media organizations, first and foremost. While we appreciate that social media provide access to large audiences, we think it makes no sense to have our tax money end up in the hands of multinational giants who thumb their nose at our tax rules and contribute nothing whatsoever to the production of information and news or the production of cultural Canadian and Quebec content.
Tenth, and finally, as social networks continue to grow in size and number, we believe the federal government should work with its provincial counterparts to establish media education programs. Canadians need to be able to distinguish between information from reliable sources and the so-called fake news that is prevalent on social media sites. Canadians also need to be able to distinguish between editorial content and advertising, which is increasingly blurring that line. Given the crumbling of online boundaries, it has become necessary to explain and underscore the role and contribution of professional journalists.
Keep in mind that we have discussed these solution proposals with a number of media company heads in Quebec, as well as with our union leaders and members. Though it was not possible to obtain unanimous agreement on which approaches to adopt, we see a clear consensus emerging industry-wide. Immediate action is needed. Several measures, especially financial ones, could be implemented temporarily to give companies the chance to transition fully to digital platforms and build new business models to protect the future of news and information.
As our societies grow more and more complex and as social networks contribute to the polarization of ideas, our media outlets need to be able to continue producing high-quality news and information and to make it accessible on appealing platforms to ensure that Canadians are exposed to diverse points of view.
Thank you for listening to us. We are available to answer any questions.
Thank you very much, Madam Chair.
The witnesses are right in saying that these are tremendous challenges. The Americans are currently making the most money, as they are not charging a sales tax on their advertising contracts. That's despicable, and I am among the clients who consume advertising on Facebook. Many people do this without even realizing it. It's part of modern life, but it is very problematic.
I want to begin by thanking all the witnesses for joining us this morning. I have a question for the Rogers representatives.
I especially appreciate the fact that you looked at the issue from two perspectives: the regulatory perspective and the television perspective. I am seeing more and more that all the industry stakeholders—artisans, producers, broadcasters and distributors—feel that the system is becoming flawed. Big players are coming out of nowhere with large trucks that create road ruts.
Can we count on the big players like Rogers to delegate representatives of various sectors, such as production, distribution, and home and wireless Internet? When the minister does her consultations, we will need to hear the point of view of all the players and not just that of one big, careful player that will say just about anything so as not to jeopardize their business. Do you think we can hope that Rogers will delegate all those representatives to contribute to the debate?
I have noted the same kind of discomfort among the other players many times. Theoretically, the 600-megahertz figure is to the advantage of some of your companies that can do more in terms of the Internet, but it is a huge problem for you as a producer and broadcaster. Do you think we can hope that everyone will do their part?
The same question is for the Bell and Québécor representatives.
Thank you very much, Madam Chair.
I think it's fair to say Canadians have a love-hate relationship with Rogers. They love a Canadian success story. They love much of the product they get and then they have things about the company or its actions at times that drive them crazy. I think that's true probably for a lot of the people at Rogers too.
But that being said, having seen it grow to success, we want to see it continue to be successful. One of the things I have noted is that when we talk about print delivering news, we hear more and more, for example, that in the Torstar empire their local newspapers are successful, they continue to generate revenue and do well, and that's being used to subsidize the mother ship.
We're hearing an opposite message from you. I have seen evidence in my local Rogers; the people have taken some tentative steps toward delivering local news that could be in parallel. We have these very compelling political talk shows that people like us get to appear on. Of course we think those are great; I'm not sure the community loves them as much.
For example, I have seen in my own municipality, a community of about 40,000 to 50,000, the beginnings of what look like an effort to deliver local news by that Rogers community channel, but it always seems like half-efforts, tentative efforts. What are the barriers that you face technically or otherwise or in a regulatory way to taking that additional step to delivering the same kind of news that our local newspapers deliver, but on television?
I want to thank the committee for having us here.
My name is François Olivier. I am the CEO of Transcontinental Inc., which is a Canadian public company listed on the Toronto Stock Exchange. We're active in two businesses at Transcontinental.
Just before we start, we're not exactly going to share five and five, but we are discussing the same issue.
At Transcontinental, we have two businesses. In manufacturing, we are the largest printer in Canada. We print everything from retail flyers for all retailers in Canada, including The Globe and Mail, and many others. We have revenues of $1.5 billion in manufacturing and our media sector revenue is $575 million, of which $235 million is in local media, local content.
We produce in five provinces: Quebec, the Atlantic region, and Saskatchewan. We own 159 community papers across those provinces. We have 143 websites that complement the paper product. We also produce a lot of local digital content.
We have more than 1,700 people who produce and work on that local content in those provinces, with more than 1,000 people in Quebec. We produce Le Courrier du Sud, where Mr. Nantel is the MP. In Newfoundland, we produce The Telegram, and in Granby, we produce Journal L'Express. In most of your ridings, we own a paper and cover your activities.
I will let Benoit introduce his company and who he represents.
I will introduce myself. I am Benoit Chartier, president and editor of DBC Communications.
I am appearing today in a dual capacity, as I am also president of Hebdos Québec, a group of independent Quebec editors.
I want to start by telling you about DBC Communications. It is a publishing group that publishes three newspapers and a monthly agricultural journal. One of DBC Communications' famous newspapers is Courrier de Saint-Hyacinthe, which is the oldest French newspaper in America. It is in its 164th year of existence. DBC Communications is a publishing group with about 100 employees and 20 journalists, and we are very engaged in our community in the Saint-Hyacinthe region.
I would now like to talk to you about Hebdos Québec, which is a group of independent editors, like myself. There are about 20 of us, representing some 30 newspapers. We are all independent. We do not belong to any newspaper chain. We publish 1 million copies a week. We have 1.5 million readers per week and 800,000 unique visitors a month on our websites. The advertizing revenue is estimated to be $52 million. We have 400 employees, of whom 111 are journalists and 33 are photographers.
Basically, in Quebec, TC and Hebdos Québec have ties to 99.9% of the province's weekly newspapers.
I yield the floor again to Mr. Olivier.
We will get right into what we want to share with you this morning. We want to share the challenges that our industry has faced since 2009-10.
I want to explain how our business works. Basically, a company like ours, or an independent like Benoit's, in the weekly business we solely live on advertising dollars. We have to pay for the content, the journalists, the salesmen, the printing, and we pay for the distribution that in our case is total market coverage for most of our product. We send a paper to every home, so we don't have any subscription revenue. The readers don't pay anything for the content. We live solely on ad dollars for our community paper.
Some of our dailies in Atlantic Canada would have about 20% to 25% of their revenue coming from readers paying through subscriptions or through the newsstands, but the bulk of the industry is living on advertising, as I'm sure you've heard. Advertisers for many years, for decades, have supported and paid for the local content that citizens enjoy.
Who are our advertisers and those businesses? They are local businesses, local and regional businesses, not the big retailer and the national retailer. Those people deal transcontinentally with different flyers for their deals and they tend to advertise less in weekly papers. Our advertisers are local in nature and our readers are local in nature.
Basically what we have done, moving to why we're here in a sense, is very well expressed on page 5. Since 2005, we have seen the Internet.... At that point it was about $500 million that they were capturing in ad dollars, and in 2014 it was $3.8 billion. So the Internet is capturing advertising dollars away from traditional TV, specialty TV, radio, and daily newspapers, and also community newspapers.
It's fair to say that community papers, with a lot of local content, have been less affected than the other media, but things have changed in the last 24 months. Where we were seeing a 2%, 3%, or 4% decrease three or four years ago, and daily newspapers were suffering a 10% to 15% decrease, now we're getting into the same zone.
From that graph, the blue bar, which is the advertising market for all community papers across Canada, you can see that all of our papers—our paper, Metroland papers, all the independent papers across Canada—at the peak in 2009 were capturing about $1.2 billion in ad revenue, and in 2010 it started to go down. You can see that in 2014 we had lost 36% of our ad revenue.
I can tell you what the number is in 2015, and I am running the business in 2016. I can tell you now, to make a round number, that we have lost about 50% of our revenue.
If your business is living on only ad dollars and you lose 50% of your revenue, whether it's media or any kind of business, you need to react. You cannot lose half of your revenue and run the same business model.
Where is that money going? It's going to people who produce zero local content; people like Facebook, Google, all those guys. They are aggregators of content and they are people who do social media which is, in French we say les discussions de perron d'église. This is not a church porch discussion, this is not curated content. They don't produce content but they capture a lot of the ad dollars.
What have we done as an industry? For sure, we didn't come here to ask you to do our job. We've been doing our job in the last five years and when you lose 50% of your revenue, you have two things you can do. You try to catch the digital wave, so we invested a lot in digital, and produced a lot of digital product around content, some not around content, some around advertising.
For Transcontinental, we capture about 10% of our business, which is now digital. On $240 million we generate $24 million of digital revenue. Our digital products are very much liked by the community, but you can see the relationship. You lose 50% of your revenue. And when you capture the wave of trying to create new revenue, you create only 10%, so you still have a big gap.
The second thing we've looked at is our costs, and if we cannot make the shortfall on revenue we have to look at our costs. Transcontinental being a consolidator in that industry helped a lot in making sure that we took a lot of costs out of the system through economies of scale, best-practice sharing, and stuff like that.
In a sense, the fact that we are a large group saved a lot of papers that would have died on their own, not having the means of a large corporation. We cut on the printing costs, on the distribution costs, on the administration costs, on the sales costs. The only place we cannot cut is on the content because the content is the heart of what we do. If we cut there, we don't have a product. We're done.
Basically, also we have a lot of challenges—
Good morning. Madam Chair, honourable members of the committee. Thank you for inviting the Public Interest Advocacy Centre, or PIAC, to appear this morning to discuss the media and local communities. My name is Alysia Lau, legal counsel at PIAC; and with me is Geoff White, external counsel to PIAC.
PIAC is a non-profit organization and charity that provides legal and research services on behalf of consumer interests, including vulnerable consumers. In communications policy, PIAC advocates for fair and affordable access to a diversity of programming that serves Canadians' needs. PIAC has intervened extensively in CRTC proceedings relating to broadcasting policy and on numerous broadcasting licensing and acquisition matters, and in television in particular.
PIAC has one key message for the committee today. Local television is important, and it can flourish in the future. To achieve this, PIAC has three specific recommendations.
Number one, private broadcasters must fulfill their promises to provide local programming, and especially local news. Any funding support should be allocated in a way that is accountable; prioritizes small, independent stations; and focuses on encouraging local stations to develop sustainable business models.
Number two, CBC/Radio-Canada needs to be a strong public broadcaster with a mandate to be engaged with and even extend service where necessary to local communities.
Number three, the importance of non-profit community media must be recognized in policy and supported in funding.
Despite changes in the way Canadians access local programming and local news, local television remains important to Canadians. This is especially so for many rural communities that may not be connected to broadband. Local television continues to be a vital link to the rest of the country.
A 2014 poll commissioned by the CRTC found that 81% of Canadians said local news was an important type of television programming, and 53% said that local programming generally was important.
In the U.S., a 2015 Pew Research Center study found that nearly nine in 10 residents follow local news closely, and local TV was still the dominant source of local news in all three cities studied. The majority of respondents accessed local news on local TV combined with or separate from the web or social networking sites.
Even with the growth in online-only news sources, news produced by so-called traditional media such as print and television still played the dominant role in keeping democratic institutions accountable. Even the top news websites in Canada are online versions of traditional news media, such as the CBC and the CTV.
The Canadian television market has experienced significant ownership concentration over the last 15 years, and 79% of commercial television revenues are now controlled by four vertically integrated private broadcasters. Many of these also control massive stables of radio stations. Yet the major broadcasters, although continuing to operate profitable television media assets, are letting down local communities outside major urban markets and marginalized communities within urban markets.
They've significantly cut staff, especially at their local stations. Bell Media cut 380 positions last November. Rogers Media cut 200 jobs in January. Shaw has adopted a model that centralizes the production of all newscasts in one location, primarily Toronto. Rogers has completely eliminated multilingual newscasts across all of its Omni stations, ending access to over-the-air multilingual news for ethnocultural communities. This is despite the fact that during the 2014 licence renewals before the CRTC, Omni acknowledged that these programs played an important role in the communities that Omni served.
PIAC recognizes that conventional station advertising revenues have indeed fallen over the last few years. At the same time, other pay and subscription-based channels owned by the same national broadcasters are doing very well. Many of these broadcasters, upon acquiring local stations, promised that they would use their size, scale, expertise, and diversity of broadcasting and distribution assets to continue investing in local television. That generally hasn't been happening. The national, private, conventional broadcaster should continue to have obligations to produce and air local programming and especially local news.
PIAC recognizes the challenges faced by smaller independent local stations, and to the extent that any fund may be created to support local stations, that fund should prioritize these independent stations and focus on helping all stations develop sustainable business models. Such a fund could also draw on the proceeds of the planned repurposing and auctioning of the 600 megahertz radio frequency spectrum band, which will displace many local over-the-air stations.
PIAC supports the creation of a fund to assist those stations that would be reassigned. Given the importance of the issues raised in this committee consultation, this fund could also be earmarked for the production of local programming, particularly local news.
On the subject of CBC/Radio-Canada, the public broadcaster has a very important role to play and PIAC believes that the federal government's budget proposal to invest $675 million in CBC/Radio-Canada over five years is a welcome step towards Canada having a strong national public broadcaster. However, PIAC believes this funding and any strategic plan for CBC/Radio-Canada should not fix all its attention on the transition to digital media. It should also ensure that local communities are adequately served by CBC stations, particularly where broadband access isn't available, reliable, or affordable.
Even with the popularity of digital media, independent non-profit community media still play a vital role in informing, engaging, and empowering local communities and marginalized groups. This is especially true in Canada where many communities do not have a local over-the-air station.
At the recent CRTC review of local and community television, numerous community groups and associations passionately described the ways they are trying to step up to provide programming that informs and engages their communities. Independent, community, and campus radio stations have emerged and developed throughout Canada, with approximately 105 community and 46 campus radio stations in operation in 2014. However, in television, more space must be created for the establishment and growth of non-profit community stations that understand and can serve the needs of their communities.
PIAC recommends that the committee recognize and support the ongoing importance of independent non-profit community media, from both a policy and a funding perspective. This could include a heritage study on community media, a national community media strategy, resources that provide training and administrative support to community stations, and initiatives that could provide some ongoing funding to community stations.
In sum, local television is important and can flourish in the future. Even in a digital era, local communities should be able to access programming that serves their needs through as many platforms as possible including, at this time, traditional local television. This will take an approach in which public, private, and community broadcasters all draw from their strengths and resources to fully serve Canadian communities.
Thank you for the opportunity to appear today and we welcome any questions you may have.
Yes, we are a large corporation. I can tell you that we have a number of newspapers that are operating at a loss. I am not talking about tens or hundreds of dollars, but millions.
The corporation has a social role to play as a civic partner, but it also has to answer to shareholders. I am the head of a public corporation. When the numbers don't add up anymore, we have to address it. We try to group titles together. For example, a newspaper that served just one municipality will have to serve two or three at the same time.
We are in a transition. It's true that we do very well selling print advertising because we have been doing it for 40 years and because we have improved our practices. We need time to adapt to the Internet. Consumers want our product. Citizens and readers demand local content. They call saying they want more. The demand is there, but we need time to transition to a digital company, and I think we can get there. People are following us, in the print edition, on the website, on tablets, and on mobile apps. We are inventing a new business, which poses certain challenges. Whereas in the past, we managed news organizations, we must now in a sense become technology-based organizations.
We have two requests. First, we need temporary assistance for content production; second, we need financial incentives to invest in technology, to create new jobs in this area, and to purchase software applications.
Could some of our expenses be reimbursed as tax credits? We are trying to adapt in order to keep local news alive. We are not asking for a single dollar that we are not prepared to invest ourselves.
Thank you very much, Madam Chair.
Many thanks to the witnesses for their time today. It's very appreciated.
I would like to continue in the same vein as my colleagues, Mr. Nantel and Ms. Sansoucy.
In my riding in the Granby area, three newspapers you represent, the Granby Express, the Journal de Chambly, and La Pensée de Bagot, reach nearly 100% of the population. Since my riding is regional, I am also very concerned about the future of these newspapers. I consider them and your media to be an important resource for our community.
I completely agree with what my colleagues said. Who will cover the Rougemont municipal council if your newspapers disappear? Who will report on the winter festival or other regional activities? No one will. In addition to being an important resource, your media really bring people together. Your role is relevant and it makes sense. When I hear of potential closures, I am concerned, not only for myself of course, but for everyone in my riding.
You have presented your requests and suggested measures to us. As we have discussed each one, I know they are on page 8.
At first glance, I support your ideas in general, but I would like to hear more about each of your proposals.
The government could support us in two ways.
It could create programs that would give us tax credits or grants that would help us deal with the challenges we are facing.
During this transition period, our challenge is to maintain the quantity and quality of information. To achieve this, we would need temporary assistance from Canadian Heritage to support content. If we were to spend $150,000 to pay people to create content in a given region, we could receive assistance in the form of tax credits or grants to support content, which is at the very heart of our business.
By the same token, we can't always come to you for help. We must become self-sufficient. We can only achieve that by deploying our content on digital platforms. Moving from a print organization to a digital one is a tremendous challenge. We have to make investments. In the last four years, Transcontinental has invested $40 million to transition to digital platforms. Our sales are $24 million and it will take a long time before we see a return on our investment. We will ultimately need help. The second area of assistance relates to innovation and science.
If we invest, could the government give us a tax credit for our investments? Transcontinental is seen as too large of a company to receive any kind of assistance under federal and provincial programs. Could someone look into this? Ministers, premiers, mayors, and MPs are calling me to say that we don't have the right to close newspapers. That is our second request. This is one way the government could support us.
Here is another way the government could help.
The government advertises a great deal in our print and digital media. The 50% loss in revenues is also due to the fact that the federal, Quebec, and municipal governments are advertising less. Someone would have to tell all the departments that, given the importance of local content in Canada, assistance will be provided over the next three or four years. These Canadian news organizations have innovative print and digital products. Could the advertising purchasers in all departments make a slight effort to be more strategic in order to support these organizations through government advertising dollars? That would be another way of helping us. Right now, there is no strategy at all.