Mr. Chair, I'll open by saying that I understand that a matter related to an individual hospital would not normally be the subject of study by any federal parliamentary committee, much less a committee on heritage, but this is not a normal circumstance. The issue arises from the fact that the federal government had previously approved the disposal of about 60 acres of land on Carling Avenue in central Ottawa for the construction of a hospital to replace the existing Ottawa Civic campus, which is now 92 years old.
The current put a stop to the process after it had already begun and has, thus far, delayed the construction of the hospital for a year. After some period of quiet and confusion, she decided to give the issue over to the , who then delegated it to the NCC, the National Capital Commission, for which this committee does have jurisdiction. That is how we have ended up here today.
The Ottawa Hospital Civic campus serves not only our capital but also western Quebec, Gatineau, and eastern Ontario. I understand there are even some patients who use it for specialized services and come from as far away as Nunavut. The campus also serves as a trauma centre for eastern Ontario, and the regional centre for cardiac and stroke. The federal government, by blocking the construction of the hospital on available land across the street, which was selected by an expert panel, is imperilling all of that.
The existing campus is in very rough shape. It's 92 years old and in desperate need of replacement and repair. That's why we're here today, to ask the to come before the heritage committee, as she has delegated the matter to the heritage minister and the NCC, and explain her decision to delay the construction of this hospital.
That is the introductory comment I'd make on the matter. I welcome members to support the motion so that we can have a study at a time appropriate for the committee.
It's not my intention to distract any further from the testimony before us, but the motion was given notice. I am here today because I originally raised the matter at the health committee, which has said that committee is not responsible for this federal intervention in the hospital location. I'm here today because the health committee would not hear the discussion.
The reality is, this is now a matter under the control of the National Capital Commission, for which this committee is responsible. The member is quite right that normally no federal government would be involved in the location of a hospital, but your government has decided to involve itself, and there's now a federal process under way, under the direction of the , studying 12 different locations in the national capital region.
Again, I wish I weren't here, and I wish we didn't have to have this conversation. I don't believe that the NCC, the heritage minister, or frankly the environment minister, should be involved in this matter, but they are. They have involved themselves. As a member of Parliament who represents 100,000 people who will be affected by this decision, and given that the federal government has appropriated the decision to itself, I have an obligation to get the facts, and that's why I've come before this committee.
Is there any other discussion on this motion, then?
The Vice-Chair (Mr. Larry Maguire): Thank you for your indulgence.
I just wanted to point out, too, that we have time today and we'll certainly make sure that we get two rounds of questions in here for our witnesses who have great detail to provide us today as well. I'm really pleased they're here. I want to welcome our witnesses, and we'll move right into it.
I will just explain, as my colleague Ms. Fry does when she is chairing, that we open up with 10 minutes for each of the groups of witnesses to present their statements, followed by rounds of questions. I believe we'll have seven-minute rounds, and we'll try to make sure we get two of those in today as well, even if we have to go a bit past 11 o'clock. We'll have time in the second group to do the same.
With that, I'd like to welcome all of you here.
I invite Mr. Honderich to make a presentation on behalf of Torstar Corporation.
Thank you very much, Mr. Chairman.
My name is John Honderich, I am chair of the board of Torstar Corporation, and I'm delighted to accept your invitation to speak today.
My message to you is a simple one. There is a crisis of declining good journalism across Canada. At this point, we only see the situation getting worse. What we see is far fewer municipal councils being covered. At Canada's second largest government at Queen's Park, there is now just one multi-reporter news bureau. Here in Ottawa, the parliamentary press gallery has shrunk, as Canada's large metropolitan newspapers, and that includes our own, have significantly cut back reporters. Across the land, I can say there is much less quality investigative reporting.
The implications of this trend for an informed citizenry and for local communities gaining access to the information they need are profound. If you believe, as we do, that the quality of a democracy is a direct function of the quality of information citizens have to make informed decisions, then this trend is indeed worrisome. I think it's something that should concern us all.
It is very important right at the outset for this committee to understand that newspapers are far from dead. From a readership point of view, we are still alive and kicking. Fifty per cent of Canadians still read a print newspaper. Close to 90%, in fact it was 88% last year, of Canadians read newspaper content on one of four digital platforms every week. In our bailiwick, the latest Vividata survey shows that the Toronto Star print newspaper, still the largest in the country, is read daily by more than one million people. This is twice the readership, I might add, of our nearest competitor. The latest figures show digital readership of the Toronto Star on one of the platforms is up 67%. Page views are up 39%. Unique visitors are up 30%. That, by the way, translates into 26 million visits a month.
Readership is not the issue. It is the business model. I would like to illustrate this paradigm shift through our own experience at Torstar.
We pride ourselves as a progressive media company, committed to quality journalism that publishes more than 110 newspapers and owns dozens of digital businesses. The company was founded on our flagship newspaper, the Toronto Star. The Star Media Group also operates thestar.com, which is one of the most visited websites in Canada; Star Touch, our daily tablet offering; the Metro chain of newspapers, with operations in Vancouver, Edmonton, Calgary, Winnipeg, Toronto, and Halifax; and Sing Tao, the Chinese language newspaper group, with papers in Toronto, Vancouver, and Calgary.
On the community side of our corporation, Metroland publishes more than 100 community newspapers spread across all of southern Ontario, plus the Hamilton Spectator and the Waterloo Region Record. Metroland is one of Canada's leading media companies, which, in addition to its newspapers, owns many digital properties, a vast flyer distribution network, printing facilities, shows, magazines, and directories. Finally, we are a one-third owner of Canada's national news service, the Canadian Press.
I think it's fair to say we know a little bit about newspapers. We have prided ourselves on the quality of our journalism across the entire group, and our connections to the communities we serve are profound. We have the awards to prove it. If you want to know what's happening in Toronto, you go to the Star. In Hamilton, it's the Spec. In New Hamburg, it's the Independent. In Parry Sound, it's the North Star, etc. I could do that for 110, and all of these are Torstar properties.
However, for the last decade, we have been buffeted by fundamental change in the newspaper industry. The digital revolution, plus the advent of the Internet, have fundamentally changed the business model under which we operate. The phenomenon is worldwide and has been well-documented.
But let me tell you the story from my perspective when I was publisher of the Star. I can remember that with our readership numbers I could boast, and I certainly did, that you had to advertise in the Star. Today there is an infinite number of digital places where advertisers can and do place their ads.
I can remember as business editor when we brought in $75 million in career advertising. It's completely gone. I can remember when our classified section ran up to 45 pages. Today's it's Kijiji and Craigslist. We now run two classified pages every day, and our largest category is births and deaths. I can remember when our travel section was huge. It no longer is. All those revenues paid for a lot of reporters.
Without that revenue, we simply cannot afford as many journalists. Indeed, the very business model is at risk. I don't want this committee, though, to think that we've sat idly by and not tried to do anything about it. Torstar, in my view, has been one of the most innovative in trying new digital ventures, everything from Workopolis to WagJag, to Toronto.com, to Star Touch, to Blue Ant Media, to Gottarent.com, to Goldbrook.ca.
There have been some successes, but the structural pressures have been relentless. Advertising revenues continue to decline and as a publicly traded company, it's there for all to see. What does this mean for our ability to report the news in all our communities? Again, let the figures tell the story.
Over the past decade the number of journalists at the Toronto Star has decreased from a high point when I was publisher of 475. When we're finished our latest buy-outs it will be 170. At the Spec and the Record, the number of journalists has been cut in half. In our community papers the number of reporters has been cut by one-third. You may well have read that earlier this year we were forced to shut down the Guelph Mercury, one of Canada's oldest newspapers, because it was no longer sustainable. You can imagine that was a very tough decision.
Put all these numbers together and it spells out an alarming tale. Why? Believe it or not, newspapers are still the only media institutions, with a few exceptions, with large newsrooms. You don't find any reporters at radio stations or in digital operations. Some argue that the democratization of the web that allows constant bloggers and citizens to write is the answer. I don't agree. They have neither the resources, the expertise, nor the time to get to the bottom of the story or to really get onto serious investigative journalism, which to me was key.
Sadly, we see no remedies on the horizon, which is why we feel it is essential—and this is why I'm here—that there be a national debate and which is why we appreciate that this committee is asking the necessary and appropriate questions. As members of Newspapers Canada we report the recommendations that were filed with this committee and we feel strongly that without some action, quality journalism and connection to our communities will get even worse. The stakes are that high.
Thank you very much.
Mr. Chair, Mr. Parliamentary Secretary and members of the committee, it's a pleasure to be here today. It's also a pleasure because we consider the mandate entrusted to you as a lifeline. It's a mandate we welcome, obviously, and one we want to take part in. As has been mentioned several times, all the media throughout Canada—it's the same almost everywhere in the world—are in what is being called a “perfect storm” that is basically requiring that a new business model be implemented.
Today two of us will speak. Brian Myles, who is with me, represents Le Devoir. He's the director and publisher of Le Devoir. Also with us today is Pierre-Paul Noreau, president and publisher of Le Droit. We represent the Coalition pour la pérennité de la presse d'information au Québec.
Basically, the coalition is comprised of four major players in the Canadian newspaper industry: Groupe Capitales Médias, of which I am the executive chairman, Le Devoir, Hebdos Québec and TC Transcontinental, whose representatives testified before you here, a little earlier in the spring.
Coalition members publish 146 daily and weekly newspapers that, each week, reach nearly six million Quebecers or nearly 80% of the population. The coalition also represents newspapers in Atlantic Canada, Ontario and Saskatchewan. All of our members combined provide good jobs to more than 2,500 Canadians.
We are here today to sound the alarm and ask that we have a national discussion together on print media. It's a matter of democracy. As for the current situation of newspapers, in our case and in the case of all coalition members, readership is growing.
The first observation is that there is a need and a demand for all our products. It's important to ensure that, in Canada, we can work with professional journalists to continue to produce information that reflects the community, local information and quality information.
For a few years now, we haven't been sitting back as a coalition. We have already started to put in place certain modifications in our business models. Take the Groupe Capitales Médias, for instance; our information can now be found on many digital platforms.
Competition is fierce. It comes from all over the world, especially from giants like Google. When we talk about an intervention, which would be limited, of course, we must talk about information protection and copyright protection.
Essentially, we are asking you today to join us in transforming a business model that is already under way. However, as Mr. Honderich mentioned earlier, the findings are quite impressive. In my opinion, when I see the demand and growth in readership, I think that there will always be a place for good, quality information.
As for what we are asking you to consider, we have a number of recommendations. I will ask my colleague, Brian Myles to explain the various recommendations to you.
Ladies and gentlemen, thank you. It's a real pleasure to be here before you today.
As my colleagues said earlier, the situation is serious. I think that, if given the opportunity, every media owner would tell you pretty much the same thing today, which is that our traditional revenue from print is decreasing and digital revenue isn't offsetting the losses. Let me be clear: I wouldn't go back to the paper era. We aren't dinosaurs here. The digital revolution is fantastic, but for our business model, it means that we have traded analogue dollars for digital cents. We are failing to achieve a stable business model.
Our recommendations are in two parts: measures that provide direct assistance and measures that provide indirect assistance. The first, which is perhaps the most important, is an indirect measure. If the government can't help us, it could stop hurting us and use the advertising budgets at its disposal to fund our media, the national media of Quebec and of the rest of Canada.
The federal government currently invests about half a million dollars in its advertising in Canadian newspapers. Ten years ago, that amount was $20 million. For us, that drop from $20 million to half a million dollars is brutal.
Where has all the government advertising gone?
It's no big mystery. In fact, the investment in 2014-15 in digital platforms was some $19 million. That $19 million or, if we round up, that $20 million is basically money inherited by American giants like Google and Facebook.
So the first recommendation is, of course, to make a significant and lasting increase to government advertising investment in our media. In addition, we think advertisers who are still brave enough to support the press here should benefit from tax credits for their advertising investment in our platforms. When I say “platforms”, that includes our printed pages, but also our screens, as we can now all be found on tablets and cell phones.
It would also be very important to update the Copyright Act. European countries are ahead of Canada and the United States on this. Here, we have let this entity called GAFA, or the giants Google, Amazon, Facebook and Apple, bleed our content dry and monetize it. It's an exodus of revenue, a major fiscal exodus. Improving the Copyright Act would make it possible to negotiate agreements and obtain royalties when our content is used on these major platforms.
We are also asking to be treated like all other media. These days, in the digital world, a screen is a screen. We need to consider that print media on digital platforms will also sometimes have a video and be on the Internet. For now, we don't have access to any assistance programs. Programs managed by the Canada Media Fund and Telefilm Canada aren't available to us. If we want to develop a video offering on our mobile site to reach new clients, young people, we have to pay for it ourselves. We don't have access to any tax credits, any assistance, direct or indirect. That the case for Le Devoir and all coalition members at the moment.
We think that payroll tax credits for hiring qualified journalists, and tax credits for creating applications would enable us to continue our digital shift. We don't expect ongoing assistance from the government. We aren't asking to be dependent on it. We think that transitional help would let us continue the activities we've already started and to pay journalists. In fact, information has a price, a value. But this value is that of brains, the intelligence of the people we hire and who are in the field to bring back quality material. These credits would certainly give us some breathing room, some time to get our business models in place.
Lastly, we pay GST on our products and QST in Quebec. We are asking both levels of government, Quebec City and Ottawa, to coordinate to exempt print media from the GST and QST. Of course, this measure would alleviate the problem a little. You can see for yourselves and around you that in the cultural arena, freebies are widespread, particularly among new information consumers. There are limits to what we can charge for subscriptions. We have a pay wall at Le Devoir.
We are one of the rare media that is successful in having our subscribers pay for quality information. We are well aware that we are stretching their flexibility to the limit by constantly increasing prices. A tax exemption would give us some manoeuvring room. The book industry in Quebec is exempt from the QST. Canadian magazines benefit from tax exemptions and have had access to the Canada Periodical Fund.
Thank you very much, Mr. Chair.
I'm not used to starting off, but I appreciate the gesture.
Mr. Cauchon, the members of your group and yourself have put forward a lot of solutions and I appreciate that greatly. We are here to find solutions.
Mr. Honderich and the two witnesses have clearly shown that we are going through a crisis and that is very important for us to take considered measures. I want to comment quickly on the five points that Mr. Myles raised.
The first point is about indirect assistance through government investments in newspaper advertising. The value has gone from $20 million to half a million dollars. I am not sure that there is an easy solution. I would not want our government to invest $10 million simply to keep newspapers alive. To be honest with you, I am not very comfortable with that. However, I am interested in your point about tax credits for those who place advertisements in newspapers. That has been mentioned as a strategy on a number of occasions, advertisers who would benefit from a tax credit of that kind could be more motivated to place advertisements in newspapers.
As I said, I am somewhat against your first point because fewer and fewer people are getting their information from newspapers. The video suggestion interests me as well. Points 2, 3 and 4 seem interesting. Point 5 also appears very interesting because we still have to distinguish between large newspapers and large media outlets and the smaller ones. Our study is principally about rural communities. The committee wants to find out what information is available in rural communities. In my opinion, the suggestions in points 2, 3, 4 and 5 are interesting if we want to support the print media, either by exempting them from the GST and the QST, by providing financial assistance for video production, or by granting tax credits to advertisers.
I see all those as possible tools and solutions in rural areas and smaller regions to ensure that the people there have access to good information. What I would like is to find strategies designed to help communicate important Canadian and local content to rural regions. I am ready to put money into that, but less so in urban areas where you certainly have huge resources available.
With that, I await your comments.
Thank you very much, Mr. Chair.
Thank you for that question, sir.
Let us go back to the first comment you made about the $20 million in government advertising that today stands at $495,000. It must be understood that we are not asking for an additional advertising budget. We understand that the overall amount invested each year is $20 million.
Essentially, we are saying to the Canadian government that, if it is sensitive in the area of local news, as you have just mentioned, it should continue to invest in our products.
Every day, in all groups, in all newspapers and coalition members, we meet people who, day after day, invest in our newspapers and buy advertising in them because they understand that we can help them to improve their sales and that we are partners. We also deliver results.
For several years, we have been moving from a paper platform to what is called the digital universe. We now deal with what we call multimedia. Essentially, we are telling you that something has to be done to help us, because the situation is completely unfair.
A little earlier, Brian Myles spoke about the assistance given to television. There was the debate about magazines; don’t forget that I was there at the time. That was done correctly, in order to protect democracy, to maintain journalistic quality everywhere in Canada, and to ensure Canadian content.
I said that the situation is unfair. In fact, every day, if you take the members of my group, Groupe Capitales Médias, for example, 200 reporters cover the news professionally all over Quebec. This is quality news about the communities. Those newspapers reflect the life of the community, culturally, politically and economically. We do it with our own capacity and our own financial resources, and with very generous people. They do it almost on a volunteer basis, because they believe in their mission.
Then, we see the Googles of this world, essentially stealing, distributing and broadcasting the information through the entire platform without it costing them a penny.
So we have come up with a number of recommendations. I feel that the Government of Canada should stop talking and start doing something.
In addition, I feel that we should be dusting off the Copyright Act, as they are in the process of doing in Europe.
When the government decides to deal with the copyright issue, when it tells the American giants to stop stealing our information and to pay us for it, you will see a change in the tone of the American giants and major companies. They will come and sit down with us, because they would not like to have a business model imposed on them.
So that is what we are asking you for.
Again, Mr. Vice-Chair, we're very glad to be here today, to be around this table and to support the mandate you have. I do believe it's a question of democracy. As you said, we're talking about regions across Canada, and it's key. If I decided to move on in my life and get involved in the media business knowing that the business model is going through a major transition in a period of time that's difficult for the media, it's because I believe in the information. I believe as well in the question of the quality of the information, and I believe and I know that we're making a difference in all the communities across Canada. That's the reason I'm here today.
Thank you very much, Mr. Chair.
My apologies for the kerfuffle at the beginning of the meeting. It was not very acceptable, in my opinion.
There really is a major crisis; it is societal and probably all over the western world. The systems in place worked very well and worked together very well. Now, people are coming in from outside and we do not know what to do about it. Heck, we haven’t even made them pay any sales tax on their services. We are really caught with our pants down. They come in and we just jump up and down, at the same time as they are eating up your business and our distinct cultural identity.
We may have our issues. We may feel that Le Devoir is not covering the NDP enough, or anything else you like, but that is not the point. We want to be happy that you can still be covering us in five years, for better or for worse. That goes for everyone. There may be complaints about regional weeklies. We may find all kinds of administrative issues, but the main issue is much broader, and I am glad that the committee is taking time to examine it.
Are you able to provide us with the wording of the section? I am pretty familiar with copyright as an issue. What is the wording of the section that allows Google to pirate your content, to take it apart and to redistribute it everywhere without compensating you at all? If you don’t have it, could you send it to us? We do not have a ton of researchers here. It would help me a lot.
While still keeping up the Internet perception of virtual communities and sharing. It all seems very bucolic, but when you see the money being made by the folks riding around on fancy bicycles in California, it's not as bucolic as it looks. It seems much more profitable for them.
I would like to bring up something else with you. Do not feel bad when you say that you are looking for government support, because I believe that the feeling is common. We even had people from the Alberta Weekly Newspapers Association telling us:
“We're not much into asking for government support, but we must say it's getting tough.”
When we hear that, we see that the problem is widespread. At times, a government's task is to repair an injustice or correct an imbalance that is occurring. You will not find that we are afraid here, or concerned about international treaties, because, internationally, everyone is dealing with the problem. We are protecting our diversity, our distinct culture in North America.
Would you be able to give us a comparison of the support given to other industries with what you receive? Since our study started, I see constantly that members of this committee are receptive, that they are looking for solutions. and that they are listening to you. The elephant not in the room in all this, and I do not blame him, is the Minister of Industry. I would like people in that department to be doing their bit.
How much support do you receive from the state? How does that compare to the support given to other industries? We are certainly talking about an industry here. If you do not have those figures with you, I would ask you to send them to us later.
My question goes to you too, Mr. Honderich.
Just now, you said that we should not be embarrassed to come here asking for assistance. Essentially, what we are asking for is a partnership. We are asking for the government to intervene to settle issues that are basically unfair. It did it in the past, you know. It is the role of government to intervene when particular sectors need support. When we talk about a democracy, in my view, that is a constitutional question, a fundamental question.
The government did it in the past during the groundfish crisis in order to support a lot of communities and put them back on their feet. That was great; it was very good. They did it for the aerospace industry, precisely because some giants were competing very unfairly with Canadian companies. They did it to extend a helping hand, to get them to the same level so that they could face the competition on an equal footing. They did it, in a general way, for multimedia and technology. You know, no company operating in Canada today does not receive a tax credit.
Essentially, what we are asking, is for you to help us, on a specific and one-time basis, to turn a corner that all members of the coalition are already navigating. It is a matter of democracy, but also a matter of need. Basically, we know that our products make a difference. We know that our products help people who want to advertise theirs. We are asking the Canadian government to start publishing its advertisements in all our products once more. By that, we mean the paper versions, but also the digital versions that most members of the coalition have developed.
If I may, Mr. Vice-Chair, we've been speaking about democracy and about newspapers from across Canada making the difference to local communities. This is what the coalition is standing for, essentially. Of course, when you look at our businesses, we're talking about 2,500 employees from across Canada who are waking up every day and getting to our local newspapers to provide people with decent, good quality news. We've been doing that for centuries. The paper le Droit
, for example, we were involved in the community. We were involved in many fights. We did that with Le Soleil
newspaper, La Tribune
, La Voix de l'Est
, Le Quotidien
, Le Nouvelliste
all very strong brand names from across the province of Quebec that people are very proud of.
I'm going to tell you something. In five years' time, I'm going to be back with the same coalition, and we'll be glad to report that we're still here, stronger than ever, because I'm sure that ahead of us, the Canadian government will choose to be a partner in making sure that, together, we are going to be able to transform the business model that we have. We did that in the past with the fisheries. I do remember very well because I was minister. We did that as well for the magazines, for the TV, and it's not going to be a never-ending story. It's going to be for a limited period of time. As a matter of fact, we do believe in what we're doing to the point that we have all started to get involved in the digital world.
If you look at Groupe Capitales Médias, for example, a year and a half ago we were just print. Now we're what we call multi-platform. When you look at the business model that's developing all over the world today, look at the Gannett group in the United States and what they are getting into. It's exactly the new business model that we have ahead of us. We're simply asking you to help us for a brief period of time, because the people that we're fighting against are so much bigger and have so many more advantages than we do, and I do believe that we should take a serious look at amending the copyright law here in Canada, like they're doing in Europe, for example.
Thanks again. We're glad that you have this mandate.
Mr. Honderich, I'm somebody who's familiar with your paper, and when I say paper, I mean the Toronto Star
. I don't read it as often as I used to, but I'm a big fan of Toronto Star Touch. You invested an awful lot of money in that a couple of years ago. I think it was $25 million at the outset, and some $10 million a year since.
If I had been listening to the proceedings of this hearing and if I were the patriarch of a newspaper as you are, I would probably do some of the same things. I would make a dedicated online platform that embraced tablet technology and was specific to it, modelled after La Presse+, which Monsieur Nantel brings up as a model time and again, and rightfully so. It's beautifully designed.
I would put money into good journalists, like Emma Teitel or Paul Wells. You may not always agree with them, but they're smart and they know what they're doing. I would invest in big stories. I would invest in newsrooms. If there's any newsroom, particularly in print, I would argue, and perhaps anywhere in Canada, that's most like the film Spotlight, it would be you guys.
You had a huge story last night about medical journals. It was on CTV National News as well. It sounds kind of mundane but it's a hugely important story. As somebody who used to do morning shows and health news, you would cite journals, and it immediately had an air of authority. We cite these journals all the time when we talk about health, which everybody pays attention to. You have a good investigative report on how they may be discredited through various takeovers. This is important stuff, but you're losing money, and I say that with despair. Don't get me wrong.
But we've been cut by one-third.
In terms of Toronto Star Touch, the competition in the English market in Toronto is so great. People have so many options. I think the exclusivity of La Presse in Montreal gave it an added advantage. If you were to ask me—I'm going to volunteer this—who is our biggest newspaper competitor today, I would say it's the CBC. It's spending incredibly on its website—unlimited resources—and it's able to take advertising.
If you want to deal with an issue, you can look at the BBC model, where, in fact, they have exactly the same situation. They built up a huge digital presence, but the BBC is not allowed to take advertising. There's an issue for you to discuss.
You want to look at other options and you raised some of the issues about where to go. The Canadian periodical fund established after the Maclean's debacle, is a direct government subsidy for paid circulation magazines.
There's been a tradition that newspapers per se never wanted to get government subsidies. They never wanted to be involved. I can tell you that in Ontario there was a digital tax credit that the Province of Ontario brought in. They have now eliminated it. We certainly took that.
I can tell you that Premier McGuinty decided not to put the HST on the sale of newspapers because of the democracy argument. That's been in place, but there has never been anything full scale, like the support for the entertainment or creative industry across Canada.
First, you've been speaking about competition. Of course, I do support competition, but we all agree that we support fair competition. When every day we have 200 journalists in the province of Quebec getting into our newspapers to not only try to produce but to succeed in producing fantastic local news, then every day we're paying for those people to make sure that we will maintain a good community life and maintain democracy. On the other side, you have people grabbing your news without paying any dues, and I believe that's unfair. That's all we're saying about that for the time being
Second, I think we're making a difference. As you said, people are getting into the digital world. Indeed they are, but we believe that the new business model that's ahead of us is what we call the multi-platform. You're going to take tablets, and you're going to take smart phones, and you're going to look at the Internet, as well, and you'll take print. They all get involved in what I call the ladder of advertising. They all have a specific role to play. Those that are getting involved in print have a certain target and a certain vision. For those that are getting involved in the tablet, as well, it's different. In the mind of consumers, they don't react the same, so that's why we've chosen the multi-platform.
We're just asking you to make sure that we're going to be able to turn around that business model and that again we're going to have great newspapers across Canada. That's all we want.
When it comes to advertising, I'm pleased with the mandate you received, and I know you're hearing people from across Canada. I look—and we mentioned this many times—at about 10 years ago when $20 million was invested in our newspapers. Today it's half a million dollars. Those dollars actually went away to people outside the country. They barely create jobs, and they barely create taxes, sir.
If you don't mind, I do believe that if you believe in your mandate, then you should walk the talk. We make the difference for a lot of businesses from across Canada that are putting their ads in our print and digital versions. I do believe that the Canadian government should be proud enough of our culture to stand and keep announcing that in our newspapers. That's what I believe, sir.
Thank you to the witnesses for being here. Your recommendations are very clear and specific, which I truly appreciate.
I represent the constituency, which includes Granby. Mr. Cauchon, La Voix de l'Est covers 100% of my constituency. It's important. The quality information in the newspaper plays a central role in the daily life of citizens in my constituency. Every day, when I walk around the constituency, people speak to me about La Voix de l'Est and the local information in the paper.
I don't see how your newspaper could no longer exist tomorrow. Who will speak of the municipal council of each village? Who will speak of the soccer club that won the tournament in Repentigny? Who will speak of local artists who stand out and who want to develop in our society?
Clearly an unfair situation exists with regard to the major players. You don't need to convince me of the need for government intervention to support the various daily newspapers that constitute traditional media for me. The need is clear.
You spoke of temporary assistance or transitional assistance. I want to go back to that. It was vaguely referred to earlier. I heard a reference to two or three years. I want you to clarify this temporary assistance. What does it imply? I don't know whether it was Mr. Myles or Mr. Cauchon, but it was interesting when you said that you didn't want to depend on the government, but that you were in crisis and it was probably the time to help you.
Can you elaborate on this?
Thank you, Mr. Chair.
Good afternoon, and thank you all for having me.
Before I jump in too far, I think it's probably worth my explaining how I moved from an ink-stained wretch to a digital publisher. I started my career in the late 1980s, following my father and grandfather into journalism, initially in radio but soon moving to newspapers and magazines. I was born in 1964, the very last year of the baby boom.
As much as publishers would like you to believe that they've been blindsided by the disruptive effects of the Internet, this downward spiral has been going on my entire career. As a journalist, my job security and that of my entire cohort have been governed by LIFO, last in first out. Journalism was never stable employment for anyone under the age of 50.
Over the decades we have moved from one advertising recession to another, never quite recovering from one before the next one hits. Publishers have known all that time that their model was fundamentally flawed. Very few publishers appear to have taken these warning signs seriously, and then came the digital revolution. For those of us in the news media, this is nothing short of an ice age, a catastrophic change in our ecosystem.
I had the privilege and luxury of spending a year at Harvard in 2007-2008 as a Nieman fellow. At that time, the economic situation was deteriorating in the media industry, particularly in the news media industry.
Of 30 fellows, 15 American and 15 from around the world, some of the very best journalists in the world, eight of us had been laid off in the previous year.
I use this imagery of an ice age. Why? Because I believe everything that is big and slow-moving will inevitably perish, and that only once the existing media civilization is allowed to perish can renewal truly begin.
I'm not here asking for a handout. I'm here with my hand up, asking you to stop. Fundamentally, I believe that preserving the old media is not an option. I want to suggest that you save your money by asking you not to bail out my competitors.
I also ask that the government stop funding the CBC's massive expansion into digital-only news in markets where there is already brisk competition or the potential for such. The CBC was created with two purposes: to provide a bulwark against American cultural imperialism, and to fill a void in rural areas where commercial news was not viable.
While the CBC has done many wonderful things, it is important to know that from my vantage point it is not some wonderful benevolent entity. It is an uber-predator. Because of the nature of its web content, the CBC is not out there competing with The Huffington Post and CNN. It is competing directly with The Globe and Mail, Postmedia, and yes, iPolitics.
Funding the CBC has a profoundly chilling effect on would-be entrepreneurs in this country, particularly when there are no undertakings on how and where that money is going to be spent. Investors are justifiably reticent to put their money into a market, even when there is a clear void in that market, because of the likelihood that once they prove the viability, the CBC will begin shifting funds there to compete against them. That is the biggest single obstacle to there being a vibrant and innovative marketplace of ideas in the media space.
I am eager to get to your questions, so I'll jump to a lightning round.
I don't believe the advertising market will revive in any meaningful way to be what it was before. Would tax incentives help? Perhaps, but it's a blunt hammer. Subscriptions are the only viable way forward, and that demands that publishers invest in quality. But it requires other things too.
Please, toughen copyright protections—I know you've heard that from the previous group—that come with severe penalties and potentially even community service for serial offenders.
Ban for-profit aggregators, which draw from a very limited advertising pool without generating any original content, and instead encourage competing media to work together.
Require CBC/Radio-Canada to refrain from posting digital-only content. Their content should first be created for TV or radio. This is done by other public broadcasters in the world, including the BBC, and would go a long way towards levelling the playing field.
I am on the record as suggesting as well that any CBC content, because it's publicly funded—video, audio, and digital—be available in real time in the public domain for any other approved new sites to use, as long as certain key branding requirements are met. ProPublica in the United States works this way and ensures their stories are extremely widely disseminated.
I would also suggest that the CBC do joint ventures with for-profit companies to ensure investigative journalism and other comprehensive coverage are sustained and that the CBC's wealth of experience is shared.
For the purposes of news, I would say to focus your attention on public interest journalism. I realize there's no real definition of “public interest”, but as Justice Potter Stewart is known for saying, “I know it when I see it.” It is the kind of journalism that is community building, that convenes and alerts the population, that is democracy preserving, and that holds those in power to account.
Create a way for charitable foundations to support the creation and dissemination of news and opinion in the public interest. This needs to be done at arm's length and should be limited to only broadly based news and opinion, not to supporting specific causes, as that runs the risk of lobbying.
If you really, really want to spend money, I will admit, as you heard earlier, that the most useful program we've ever encountered was the ill-fated Ontario digital media tax credit, although, as designed, it was far too slow to be useful for anyone who is really an entrepreneur. It was great for the Toronto Star and Postmedia, which could wait for the payout for 18 months or for two or three years later, but for an entrepreneur who was bootstrapping, it was not a useful tool. That said, we're not turning away the money. Also, it was very poorly designed, allowing anyone who had a website, whether it was a funeral home or Walmart, to claim against it, and that also made it unworkable.
I'm certain that other ideas will pop up over the course of our discussion. I look forward to exploring them with you.
I look forward to your questions. Thank you.
Since The Tyee is showing you theirs, I'll show mine.
We've been running iPolitics for almost six years now. We employ 23 people full time, and our entire operation has been funded with just over $3 million. We travel, at times, to the major conventions. We try to be as much of a presence as we can. We're nimble, and we employ a lot of young people.
My feeling is not that the digital tax credit did this. It rewarded those who invested. It wasn't just free money. It matched you. If you could convince someone to give you $1 million, and you spent x percentage of that on development and on journalism, they would refund you a portion of that. That was very helpful, and it allowed you to reach scale.
I think creating innovation funds that don't require the hard work of first coming up with an idea, and proving the viability of that idea, is mostly going to end in heartbreak.
That said, I think when David Beers started up The Tyee, he bootstrapped it amazingly well and found a lot of very interesting voices, and has developed some quite good journalism along the way.
I understand everything, but I'll answer in English.
When I first began looking at Politico in Washington, I met with some of the founders there. They said their goal was to be the ESPN of politics. By that they meant print, television, digital. They saw the niche as politics, and they're agnostic about the platform.
I came here with that idea. In a brief year, or even six months, between that conversation and arriving here wondering if this could work in Canada , everything in the industry started pointing to being even more granular. The verticals have to be even narrower. I now use the analogy of being Baseball America. I don't know if you're familiar with it, but Baseball America has statistics on single A baseball players playing in Topeka, Kansas, and that sort of thing. For the real baseball fan, that's where they'll go. They don't bother with USA Today. They don't bother with the local sports page.
If you look in the business world, there are three winners, essentially. There's The Wall Street Journal, the Financial Times, and Bloomberg. If you look in the entertainment world, at the business level it's Variety, and at the titillating level it's TMZ. So you need to be a specialist in what you do.
The typical reader now has a trapline of five or 10 things they check every morning. I'm very happy to hear that we're part of your trapline, because being able to move up that trapline brings you up in relevance.