I call the meeting to order.
Good morning. I note that we have witnesses here today, some on video and some in person. We are studying, as you well know, the access of local communities to Canadian stories and Canadian experiences across the country with regard to news and other information—Canadian content, so to speak.
What happens when media have been consolidated? What is the impact? Has it been good? Has it been bad? We're looking at all the platforms, including digital. We're looking at some solutions to this and ways in which we can enhance Canadian content and access to it, including news.
We welcome this morning Télé Inter-Rives Ltée, with Mr. Harvey, director, Mr. Nadeau, director, and Ms. Simard, vice-chair. From The Tyee, we have Michelle Hoar, co-founder, and Robyn Smith, editor-in-chief, all the way from sunny Vancouver.
Here's how it works. To present, you have 10 minutes as a group. At the end of 10 minutes, we will open it up to questions from the members of the committee.
You can decide whether it's Mr. Harvey, Mr. Nadeau, or Ms. Simard who will speak, or if all three of you are going to divide the 10 minutes.
Ms. Smith and Ms. Hoar, you can also make that decision between you.
Good morning, everyone.
Madam Chair, members of Parliament and committee members, my name is Cindy Simard and I am vice-president for news of four Télé Inter-Rives ltée local television stations owned by the Simard family. I am now 40 years old and was a journalist myself. I am currently the main local newsreader for CIMT-TVA, our station in Rivière-du-Loup.
With me here is Pierre Harvey, general manager of station CHAU-TV, affiliated with TVA, in Carleton-sur-Mer. Pierre has worked there for 40 years.
Let me also introduce Jean-Philippe Nadeau, who is news director at CIMT-TVA and CKRT-TV, which is affiliated with Radio-Canada.
Madam Chair, I would also have liked to say a few words in English, but my English isn't quite good enough and it would take too long. And that's even though my mother is an anglophone and I was actually born in Ontario, but my English isn't fluent.
Our family has been involved in broadcasting for more than half a century. My grandfather, Luc Simard, founded the first television station in Rivière-du-Loup, affiliated with Radio-Canada. The launch of that first television station took place in the early 1960s, when the Government of Canada, through Société Radio-Canada, needed small private entrepreneurs in the regions to provide Canadians with their first television service. In 1978 and 1986, my father Marc Simard answered the call from the CRTC and founded our station affiliated with TVA, followed by a station affiliated with TQS, known today as Vtélé.
Our television stations today serve all of eastern Quebec, including the Gaspé and the North Shore, as well as the province of New Brunswick, where there are about 235,000 francophones, most of them Acadians. The whole market served by our stations represents about 650,000 people.
As they did during the Let's Talk TV consultation, Canadians who participated in the online forum stated unequivocally that they considered local news to be very important and their principal source of news and information. In a survey, 81% of Canadians stated that local news on television is important to them.
In the Let's Talk TV discussion forums, many Canadians spoke about the importance of local news. Most of the participants said that they relied first and foremost on televised news to remain informed of issues of public interest, and that they used newspapers and the Internet only as a complement to televised news.
Our four local television stations spend nearly $3.5 million every year just on their local news service. It is the largest single expense of all our television stations. For nearly 60 years, since television came to Canada, local television stations in all regions of the country, except the main television networks, have had only one source of income, the sale of advertising.
Unlike the specialty channels, the major broadcasting distribution undertakings, the BDUs, the cable and satellite distributors, capture our local television signals and pay us nothing to distribute and resell them to their subscribers. While this goes on, besides the subscription revenues paid by consumers, the specialty channels benefit from additional revenues from advertising. And they do so without any obligation to produce local programming and local news in Canada's regions. That is one of the reasons that conventional television is in a precarious situation, in addition to the advent of the Internet.
The new media are now an essential supplement to our radio stations. We consider the new media to be an additional window for broadcasting our local news. However, our websites generate virtually no revenue. It is television advertising revenue that pays the costs of our websites.
In North America, the websites most consulted are those operated by the major broadcasters like CNN, ABC, NBC or, in Canada, CBC, TVA, CTV, etc. That is because of their capacity to deliver news produced by professionals. The same is true in our regions, where the local news sites of our stations are also those most consulted, because of the accuracy and reliability of their content and the trusted reputation of our stations.
In every case, whether in the major population centres or out in the regions, all the money necessary to provide content for and operate the websites comes from advertising revenues from television or specialized news channels. Needless to say, operating Internet websites is extremely expensive.
In the United States, the FCC, the equivalent of our CRTC, has for all practical purposes forced cable and satellite distributors to pay local television stations for the right to distribute their signals, just like the specialty channels.
In Canada unfortunately, and in spite of the CRTC's desire to introduce such a practice, some of the large cable and satellite television distributors objected to this practice. A three-two judgment rendered several years ago by the Supreme Court of Canada determined that this practice was inapplicable, based on certain provisions of the Copyright Act in Canada.
In our opinion, it would have been more logical for the conventional television stations to obtain subscription revenues for their signals, which would have improved the financial situation of our whole industry.
One solution would be for the Government of Canada to make the necessary amendments to the Copyright Act to allow conventional television stations to obtain subscription revenues.
Given the financial difficulties facing conventional and local television stations, the CRTC made the best decision in the circumstances on June 15 when it announced the Independent Local News Fund, the ILNF, using the same financial resources available within the broadcasting system.
We approve and support this fund and thank the Commission for having established it, so that Canadians can continue, as they wish to, to benefit from very high quality local news.
However, this amount may turn out to be inadequate to satisfy all needs in the future. The Broadcasting Act obliges distributors to pay 5% of their revenue for the production of Canadian programming. We believe that this amount ought to be subject to increases by the CRTC if maintaining local news makes it necessary.
Finally, we would like to emphasize that it is absolutely vital for our four local television stations to maintain their affiliation with the three main French television networks: TVA, Radio-Canada and V.
Ninety-five per cent of our programs come from these three major networks. Seventy per cent of our revenues are from network advertising sales. Without network affiliation, it would be absolutely impossible to operate a local television station in the regions.
In a decision handed down in 2007 involving certain aspects of the regulatory framework for over-the-air television, the CRTC stated:
||The Commission considers that independent broadcasters play an important role in providing local programming outside of major markets. In order to provide local programming of high quality, they need the financial strength that results from reasonable affiliation agreements and financial support.
After more than 50 years of experience in broadcasting, we ask the Government of Canada, through the Ministry of Canadian Heritage, to maintain and reinforce all the powers of the CRTC, and to do so in the interest of all Canadians, so that they can have access to high quality local news. We want to emphasize that that organization is the sole guardian of Canada's broadcasting system.
Finally, we deeply believe that local television should remain the primary source of news for Canadians.
We thank the Standing Committee on Canadian Heritage for its invitation to appear and its evident interest in the activities of our local stations, and we are ready to answer your questions.
Good morning. Thanks for inviting us to speak today.
I'm here with Michelle Hoar, who helped found The Tyee and led its business operations for 13 years. She can help answer questions following my statement.
You are studying the state of Canada's media industry today, the impacts of new media, and what the future might be. I hope that telling you about my experience at The Tyee sheds some light on that.
I feel fortunate to work in journalism. I graduated from school in 2011, when legacy media outlets in this country were already reckoning with the impacts of the digital revolution. My peers were wary, but since many of our journalism heroes still worked at the big papers, we were hopeful a plan B would emerge.
But it just got worse. Advertising revenues kept dwindling, setting off waves of layoffs at the big chains. Traditional beats, the expertise at the heart of journalism, dried up as thinned newsrooms tried to keep up with the 24-hour digital news cycle with fewer people. Facebook and Google relentlessly decimated ad revenue as a support for news production. Corporate newsrooms responded by blurring the line between real reporting and advertorial.
Meanwhile, the CBC was cutting back drastically. We watched as the reporters we admired took early buyouts or fled the industry.
A few of my friends did find good jobs, but many gave up. They couldn't make a living from the scant available work, or they couldn't stomach industry trends towards chasing clicks or writing bland sponsored content to serve advertisers. Twenty years ago, I am told, a freelancer was paid three to five times more a word than today. What other industry's pay scale is going so dramatically in reverse?
I say this because I want to be clear that it isn't just critical public interest journalism that has been lost as our legacy media outlets have struggled. Canada is producing a lot of smart people who want to do this work, to throw all their brain power and passion into informing our vital democratic conversation, but there are fewer places for them to hone their craft and fewer mentors with the time to teach them.
The result is that we are failing to nurture the next generation of journalists, the kinds of reporters who help manifest real and necessary change in the world, and that is a huge loss.
I was lucky to land at The Tyee, which, over 13 years, has built a healthy regional and increasingly national following based on readers' appetite for what concentrated corporate media were missing, but despite pride in all we've done, we worry about our industry. We don't want public interest journalists, regardless of who their employer is, to be out of work.
No one in Canada has yet figured out a digital-only online business model that easily supports a large number of full-time, paid professional journalists. None of the local digital outlets have the size and scale that legacy media outlets once had. We worry that there's a dangerous chasm that's opened up as legacy media fails, and digital media isn't catching up fast enough to bridge the gap and cover what's lost.
I personally don't think that bailing out big media is the answer. I prefer a future where Canada's monolithic media companies are broken up and the news and information outlets are bought by smaller regional entities that care about their communities and have strong relationships with local institutions that support them.
Barring that, I do think there's a lot that a government with some imagination and appetite for change can do to revive our industry.
Imagine that in Canada there was a recognized, valued, and well-supported sector for digital media outlets like ours. Imagine a flourishing of Tyees, of all different stripes and missions, with different business models behind them, a mix of charity, for-profit, co-op, and hybrid structures. It starts with some investments and it needn't cost a lot. It doesn't even need to come directly from government, but government can help make it happen.
I recently asked our founding editor, David Beers, how much it cost to launch The Tyee in 2003. It was $190,000. At that time, there weren't many models like ours, so he and our founding investors thought like this: “All Canada needs is a template, and all we need is $190,000. If it bears fruit in the first year, we'll put in some more. If not, we'll pull out.” That's how The Tyee was off and running.
Today, $190,000 is less than one-fifth the cost of a tear-down house in my city of Vancouver. It's also, from what I've read, a little less than what it cost to move two of our 's aides from Toronto to Ottawa.
That $190,000 helped get things going. It turned into repeated investments of similar amounts as The Tyee broke stories, drew an ever-larger audience, and obviously mattered. That $190,000 kick-started the development of several other pillars of earned revenue that now support our operations, including advertising, event sponsorships, income from our Tyee master classes, and, increasingly, voluntary support directly from our readers.
Patient investor commitments and diversified revenue streams are what has sustained The Tyee and built it into a respected, award-winning platform for public interest journalism. True, that $190,000 that launched The Tyee in 2003 may be a little more today. Let' s say it's $350,000. Supporting the launch of 20 Tyee-like outlets across Canada would cost $7 million. In my town, that's seven houses.
This is the vision I am holding out here today. Canada needs some combination of policy innovation and wilful prioritization to make the $190,000 that launched The Tyee gravitate, over and over again, towards independent journalism experiments across Canada.
We need incentives such as tax breaks, matching grants, and lifted philanthropic restrictions to encourage stakeholders in our communities to seed-fund independent media. We need infrastructure to help single independent media efforts like The Tyee more easily mesh into a network of other such experiments, perhaps a recognized sector of independent media sharing core costs, revenue streams, reporting projects, technological advances, and audiences.
There is a role for government in this, not in directly funding content. With respect, The Tyee would not seek such funding from the government because we are in the business of reporting on your activities. However, there is much to be done in building out the now proven but still needlessly starved potential of the independent media sector as a complement to corporate media and the CBC.
Let me quickly return to the mention I made of changing philanthropic laws. The Tyee has benefited over the years from contributions from forward-thinking philanthropic institutions through a relationship with our sister non-profit, the Tyee Solutions Society. That demonstrates that great things are possible, but we've also learned how federal policy makes the collaboration of philanthropies and public interest journalists needlessly difficult.
When the Tyee Solutions Society accesses philanthropic investment, we do solutions-oriented journalism. Solutions journalism uses investigative reporting techniques as its bedrock, but it is not about dinging politicians. It's focused on how to fix seemingly intractable problems. It's worked out well. We've so far done nearly one million dollars' worth of solutions journalism over the last seven years, on critical topics like food security, indigenous education, affordable housing, and Canada's energy future, and we've done it despite Canada's incredibly restrictive philanthropic rules. It's the kind of journalism my generation is interested in.
In sum, again, we're not asking you to fund our content. We're asking you to find ways to loosen up the money. We're asking you to consider a start-up fund for new media outlets like ours. We're asking you to help us attract more core investment funding and encourage a better investment climate for media in Canada overall, whether it's supporting community trusts or perhaps offering tax breaks. Finally, we're asking you to make it easier for philanthropies, individual and institutional, to support our solutions journalism.
I'm so glad there was a place like The Tyee when I started my career, and I'm asking you to wrap your heads around helping to create and support other homes for people like me. Thank you.
Our Rivière-du-Loup stations, CIMT and CKRT, cover a very large territory. We broadcast in Rivière-du-Loup, Charlevoix, and New Brunswick. We have teams on the ground just about everywhere. We hire young reporters. We are a regional training school, since several reporters who are now here in Ottawa worked in Rivière-du-Loup, as well as others elsewhere in the country. We have always hired passionate people.
In fact, the people who live in the regions need just as much quality information, produced with the necessary journalistic rigour. Since we are affiliated with networks like TVA and Radio-Canada, the journalistic standards are the same, whether we serve a small market or a large one. It is no different in the case of Rivière-du-Loup. The difference is that we cover large territories, sometimes with small news teams.
Over the past few years, we have continued to hire staff, despite a difficult economic context for the media. We have always been concerned with maintaining the quality of information, because people need to be informed, locally and regionally. In fact, local information is the basis of democracy. People want to know what is happening in their municipality, their school board, their hospitals. The decisions made impact them on a daily basis.
In the absence of local media such as our own, people would listen to national news. The locus of interest would thus be much further away. This is how we in the regions manage to reach people. In fact, they let us know daily. When we meet people on the ground, they thank us for talking to them about their area, because they want to know what is going on close to them. That is why it is important to provide greater assistance to regional stations like ours, so that we can maintain that information quality.
There have been a lot of technological changes these past years, and we have had to invest in high definition. Our station was one of the first ones in Quebec, after Montreal, to make that change. May I repeat that the people in the regions want to have a product that is of equal quality, as regards both the image and the information. There was also the whole digital change, with the advent of the Internet. People want to be informed quickly, and we have to maintain not only our local programming but also our websites, with the same number of journalists. We constantly add information to our sites, 24 hours a day. This means that we do more, but we do not have any more staff than before.
Let us recall that the general networks in the United States are now wondering whether they will stop distributing their signal in Canada because they do not receive any royalties. It is incredible.
I have a question for Ms. Smith and Ms. Hoar, from the Vancouver online magazine, The Tyee.
First of all, Ms. Smith, I really liked your presentation. I think we have to constantly remind ourselves that the system we have, which used to work, no longer works or does not work as well, and that it is very much in danger. We must not be too alarmist, though. Things are going well, everyone is earning a living, but it is increasingly difficult.
On the other hand, they let you down as a student by telling you that working as a journalist was pleasant. Of course, a journalism faculty would not tell all its students that they will have have to be very lucky to find a job. They would not tell its students that because it would be too discouraging, but it is true all the same.
You put the presentation you gave this morning online. One of your subscribers pointed out that, although you always write about funding, if you are writing for a group of people who want to read articles on certain subjects, there could be a risk that your inquiries always pertain to subjects those subscribers want to read about.
To get back to my question, has consulted you? She was in Vancouver yesterday to address modernization issues. Were you invited to Minister Joly's consultation?
Honourable Chairwoman and members of the committee, it's a pleasure to be able to assist you today with your inquiry on issues of local communities and the news that they need.
I want to share some ideas gained from four decades of dealing with the issues of media economics, competition, pluralism, and the information needs of communities. I've submitted a brief, which I know you have, but I want to highlight a few points and ideas before taking any questions that you wish to focus upon.
The challenges of local news provision are not unique to Canada, but their effects on local, provincial, and federal governments are specific in Canada. Further, the structure and economics of local news in Canada present some particular challenges that you're going to have to address if you're trying to improve the current situation.
Canada's local news provision is built on a backbone of local, daily, and community newspapers. There are, of course, some CBC services that provide assistance as well. Unfortunately, their effectiveness at meeting local community news and informational needs has been diminished by reduced resources and by a concentration of ownership, which have led to the creation of an homogenized content from across the country.
The costs of traditional news production and distribution are making it very difficult for many media to survive in the forms they had in the past. Of course, these are being compounded by digital developments and, more importantly, changes in audience behaviour that are making it very difficult to provide news in the way it was traditionally provided. Digital media are very much increasing the potential to address local informational needs because they have significant cost advantages due to their reduced production and distribution costs.
The committee should be thinking of how you can harness those opportunities, and that should be an important part of any effort to address deficiencies in local news provision.
As I indicated in my brief, particular efforts should be made to support digital news start-ups and young enterprises in digital news, because these are going to be increasingly important in the years to come.
Measures to shore up existing news providers aren't going to solve the problem, however. In the long run, they will fail because the challenges they face are more than just revenue based. They have unfavourable cost structures, and that is being compounded by the ways the public now receives and exchanges information and local news.
That said, some short-term and mid-term measures to support existing providers may be appropriate. These include efforts to help companies transform themselves digitally and to support some specific journalistic functions at the local level that are not being met well today. But any measures to support legacy media should be designed to produce change in the way those providers operate or to alter their cost structures, not merely to replace lost resources. Otherwise, this will not, in the long run, improve the conditions in local news.
Broadcasters also need to be part of the solution. This can be done with increased requirements for providing local news and with incentives and support to improve local news provision and information. It should not be something that is just for community radio or public radio, but for commercial as well.
Tax and charities laws also need to be considered in Canada, particularly to support the development of not-for-profit local news providers, which are increasingly important in many countries. Canada's current provisions are among the least supportive in the Commonwealth and in the Anglo world for not-for-profit journalism. Significant attention should be paid to what opportunities exist there.
There are no simple solutions to the challenges you're addressing, because we're in an age of transformation in the way that information is created and distributed. Any resolution you seek will need to be multi-faceted and actually resolve the challenges facing news and information provision, and it must be filled with the kind of wisdom and effort that only you can bring to it.
I'd say start-up funding, and there are different ways to think about it. Part of it is start-up training, specifically for people who are going to do local journalism.
The other is setting up mechanisms they can use, off-the-shelf kinds of technologies, to run locally. That could be done through a grant or funding that would be available to anybody anywhere in Canada, for instance, and maybe even sold abroad.
On start-up funding, if you're actually going to go into the venture funding of starting an organization, that becomes very different, because you have to start dealing with grants. You have to start dealing with some sort of granting agencies to deal with that. It can be done, and it can be done in a way such that it is not discriminatory. It often has to be done with funding through mechanisms where the funding board is completely non-partisan. That has been done. It has worked in other locales. It can be done.
It can also be done by linking to local community organizations that are already there, for example by asking the local university or college, or maybe even some high schools, if they could start a local news site and get it running and telling them that you'll give them some money to get the software they need to do that, to buy the site, and to do things that need to happen.
There are many ways you can do that, but it doesn't take a great deal of money to start up a local digital operation, because you often start with only two to five employees, with everybody else working part-time or contributing their efforts.
What we're moving into is an age in which people get information in very different ways than they used to. We used to get up in the morning or come home in the evening from work, sit down with our newspaper, and work through all 34 or 56 pages of whatever was there. I still do it every morning; I fight my wife for the papers. About a quarter of the population in most communities is doing that, and others are getting their information from television news, but the days of sitting down and watching the half-hour television newscast are disappearing along the way.
What we're getting are bits and pieces of news delivered to us through our social media sites and through news alerts on our phones. We're getting them on buses. We're getting them on the sides of buildings. If something interests us, we go to it. If our friends that there's something local that we need to look at, we look at it through our social media.
That is ultimately changing how news has to be distributed and the funding of that news. The problem is that somebody has to create that news to begin with. That's where all of this changing environment is creating the bottleneck: it's who creates that news to begin with. The national news isn't a problem and the international news isn't a problem, because there are enough sources doing it that we can get it through them. The problem is provincial and, really, local news. Large cities can take care of themselves. They would like to have help doing it, but where help is really needed is in the smaller communities.
How do we do that? What we see now is that, more and more, even those in the smaller communities in many countries are having to seek multiple sources of funding for local news. For the past 25 to 50 years, they have basically relied on advertising, which in North America provided 75% to 85% of the income. In Europe, it was about 60% of the income. The rest came from circulation sales.
What we're going back to is a day when news organizations have to have other sources. We see some doing events along the way. Some are getting grants to get support. Some are engaging in other kinds of commercial activities, such as providing advertising, ongoing services, and other such things to try to spread the revenue sources that they have.
That actually looks much more like the way newspapers and media operated 100 years ago, when the local printer in town printed everything from church bulletins to books and others things. That's what they used to fund the newspapers along the way. That's kind of where we're moving now in terms of funding local news. That becomes I think an important part of where things are going: to find multiple sources of revenue. I think we'll see that occurring much more.
On the issue of not-for-profit, yes, not-for-profit is one mechanism. It is not the mechanism that will work, or the only mechanism, but it is one mechanism that can work and can add to the mix to make things work. It also creates secondary sources of news, so that local communities are not dependent on only one. What we do know is that when there is more than one source of news in a community, all the news providers in that community start getting better and putting more resources into local news, because they have to. It means that the publisher gives up a new Cadillac for another couple of years and instead hires another journalist. You see this happening over and over again around communities when there is competition.
You're certainly not alone in wrestling with issues of culture.
There are many ways to deal with the cultural issues. Concentration isn't necessary to have good promotion of national culture and national news and information flow, but it's one way to do it, and it has done it. The problem is that it has a lot of downsides, because after a while, if you're heavily concentrating, you stop investing very much.
One of the problems is that Canada has always been so afraid of American media and culture, with good reason, and it's so afraid of English, with good reason, in Quebec and otherwise, that it has allowed concentration, even saying, okay, well, at least it's not these others. The problem is that it should have undertaken mechanisms to ensure that more Canadian companies were involved, rather than fewer Canadian companies. It has done very well in broadcasting with Canadian content laws, and in other such things, they have done quite well.
You're not alone in this. Take the position of Ireland, which struggles dramatically because it gets hit from both sides of the Atlantic. It gets hit with English from the U.K. The Irish Republic is not too comfortable with that, for a variety of political reasons. It gets hit with everything from the U.S. and some from Canada, so it really has trouble being Irish. There are other countries that wrestle with these problems, including Austria, with the Germans, and it is important to deal with them, but concentration is not necessary to do it.
There are a lot of cultural policies that can be used and a lot of media-specific policies that can be used to ensure that you have adequate cultural production domestically.