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House of Commons Emblem

Standing Committee on Canadian Heritage



Friday, November 27, 2020

[Recorded by Electronic Apparatus]



    Everyone seems to be, with the exception of myself, virtual today, but these are the days that we're in.
    We are studying, with witnesses today, challenges and issues faced by the arts, culture, heritage and sport sectors during the COVID-19 pandemic. Pursuant to Standing Order 108(2), the committee resumes its study on the challenges and issues faced by the sector. We moved the motion on October 23, 2020.
    We have two hours today. We have one full panel and we have a second panel coming in an hour from now.
    Again I'd like to remind our witnesses that you have up to five minutes to begin. Following that, there will be questions and answers from our MPs, respective of the parties and the time allotment. We'll get to that in just a few moments.
     I just want to introduce the people here today.


    We have with us a representative from the Association québécoise de l'industrie du disque, du spectacle et de la vidéo.


    We have Solange Drouin, vice-president and executive director, public affairs. From Drayton Entertainment, we have Alex Mustakas, artistic director and chief executive officer, and from Music Canada, we have Patrick Rogers, vice-president, corporate affairs.
    It's good to see you all.
    We're going to start out with five minutes for an introduction and an opening speech. I will be somewhat lenient, but these hours can close very quickly, as many of you would know.


    Ms. Drouin, you have the floor for five minutes.
    Thank you for inviting us to appear before you today.
    Before getting to the heart of the matter and talking about the pandemic, I'd like to take a few minutes to describe the world of music to you.
    Globally, this environment is very largely dominated by three big multinational companies: Sony, Universal and Warner. Those three enterprises are present in Canada. Here, they distribute the musical content from international artists and they also develop the careers of Canadian artists they feel can be of international scope, such as Drake or The Weeknd, whom you know.
    These three large corporations have virtually nothing to do with the production of Canadian francophone content or that of Quebec artists who speak other languages. Those Canadian francophone artists are almost all allied with independent enterprises that develop their careers here or internationally, in some cases. It goes without saying that the size of these independent businesses cannot compare to that of the three global enterprises.
    It will be important to keep that in mind when you analyze the effects of the pandemic on our sector.
    All businesses have suffered from the pandemic, of course. On the other hand, independent businesses do not have the same resources as multinationals to cope with it.
    To understand our industry, the other thing to take into account is that income for the entire chain of music stakeholders comes primarily from three sources: revenues from the sale of recorded music, from the sale of concert tickets, and finally, funds and contributions from the use of music on the radio and in public places, for example.
    With respect to recorded music sales, as you know, since 2005, these revenues have shrunk considerably in favour of streaming, without generating equivalent revenues, far from it. The pandemic has further accelerated this irreversible phenomenon.
    The pandemic has also had a catastrophic effect on ticket sales due to the closure of venues. Under normal circumstances, revenues from this activity represent nearly 50% of total business revenues. However, the industry has been totally deprived of this for several months. This loss has had a devastating effect on the entire chain, since more than 75% of expenditures in this sector go to labour, including artists, back-up singers or choristers, musicians, technicians and designers, among others.
    Finally, other revenues from music use have also suffered huge declines and will continue to do so. For example, in radio, royalties paid are calculated as a percentage of advertising revenues. As advertising revenues are declining, so are the resulting royalties for authors, performers and producers.
    The portrait I'm painting for you is quite dark, I agree. However, the response of our community to the pandemic has been surprising, and even inspiring. Instead of giving up in the face of the enormity of the challenges, the music community has continued to work tirelessly to keep the link between artists and audiences alive.
    Since the lockdown, in Quebec alone, several hundred albums have been released. All kinds of activities and shows have been created, such as virtual shows, shows on balconies and in drive-in theatres, and the production of music videos has continued. In short, the independent Canadian companies that accompany the artists have remained open and active.
    All of this was made possible thanks to additional funding from the federal and Quebec governments. We have said it several times and we say it again today: thank you for this essential support.
    These emergency payments provided our community with some predictability until March 31, 2021. Beyond that date, as it were tomorrow morning, the outlook for the future becomes blurred and uncertain. In fact, a broad consultation with our members revealed a great fear that 2021 will be worse than 2020. This is a fear to which is obviously added the exhaustion of the teams and the accumulation of losses.
     Our independent companies have always been dynamic but fragile. The pandemic has made them even more fragile, and their capacity to produce, market and distribute music and shows for local artists has been reached.
    In the coming months, a recovery plan must be implemented over as long a period of time as necessary, so that the Canadian and francophone music community can continue to make quality music in all its diversity accessible to Canadian audiences everywhere. To achieve this, financial investments will be necessary, of course.
    In addition, the pandemic has exacerbated the urgency of revising two framework laws for our sector.
    First of all, I'm talking about the revision of the Broadcasting Act. Bill C-10, currently before Parliament, establishes a framework for online businesses, often foreign, and will ultimately subject them to regulation that will enhance our content and financial contributions. This legislative review must be completed before the next election. We cannot flub this historic event.
    The revision of the Copyright Act is another tool you can give the cultural community to ensure its sustainability. For example, the private copying regime, which has been successful for many years, must be reinstated.
    Thank you for your attention. I'll be pleased to take your questions.


    Thank you very much; you're very kind.


     Mr. Mustakas, you have five minutes, please.
    Thank you, Mr. Chair and committee members, for allowing me a few minutes to crawl back in from the window ledge to appear before you today.
    I'll give you just a bit of background. Drayton Entertainment is an award-winning charitable arts organization that produces professional live theatre at a circuit of seven venues throughout Ontario: the Hamilton Family Theatre Cambridge; the St. Jacobs Country Playhouse and the Schoolhouse Theatre, Kitchener—Conestoga; the Drayton Festival Theatre, Perth—Wellington; two stages at the Huron Country Playhouse in Grand Bend in Huron—Bruce; and, the King's Wharf Theatre in Penetanguishene, which is in Simcoe North. We also have a centralized production facility and recently announced youth academy in Waterloo.
    What began as a relatively community-based volunteer arts organization back in 1991, a grassroots movement 30 years ago in the tiny village of Drayton, Ontario, has become one of the great success stories of Canadian theatre. Back then, there was one employee, a legion of volunteers, a nine-week season and a paid attendance of 14,000, with a modest budget of $99,000. Fast-forward to the 2020 season—the pandemic season—a season that would have consisted of 832 performances throughout the province to a paid attendance of over 275,000, with a $12.5-million budget and an estimated economic impact exceeding $65 million.
    Drayton Entertainment now provides over 400 employment contracts to actors, musicians, designers and other creatives, making us one of the largest employers of professional artists in the country. Additionally, we employ upwards of 175 staff and have an active network of 550 volunteers contributing over 30,000 hours annually.
    The remarkable thing I would like to note is that since our inception—because I've been here since the inception, and some of my staff would say it's too long—we have received zero operating funds from any level of government or arts councils. Of course, we have benefited from the occasional federal investment in capital infrastructure upgrades or expansions, resulting in a substantial return on investment.
    The pandemic has impacted us in many theatres in three noteworthy ways. Firstly, the loss of all programming has caused significant hardships not only for us, but also for our municipality, tourism and hospitality sector partners, who rely on us as a major driver of regional economies.
    Secondly, what we do is communal by nature, and this makes recovery a daunting prospect for any business.
    Thirdly, despite the lifeline of the emergency wage support and the emergency response benefit, with no revenues to cover our fixed operating costs we've been forced to terminate all artist contracts and lay off the majority of our staff. It pains us to be in this position, of course. Along with our industry colleagues, we've mitigated financial losses, reduced overhead and minimized expenses through every possible means.
    As we continue to navigate these challenges, we've identified four support recommendations to the standing committee.
     I will start with number one, and that is a fair and transparent application process to access government funds. Criteria should be expanded for any current or future aid programs to include eligibility for those organizations that do not already benefit from annual operating funds from any tier of government. In short, arts organizations like ours should not be overlooked for not being a client of these entities and the subsidies or grants they provide. Earlier this year, the government announced that $55 million was allocated to the Canada Council for the Arts, which opted to disburse to just its current clients, with no opportunity for the rest of us to apply and make a compelling business case for support.
    The second recommendation we would have is to top up the wage supports. We would respectfully recommend that the emergency wage subsidy restore the maximum 85% rate for the hardest hit sectors. This would allow us the flexibility we need to bring back workers to position our recovery. Even with the current wage subsidy program, which we are very grateful for, many arts organizations are operating with little to no revenue, unable to sustain the top-up wages or benefits required to retain our teams.
    The third recommendation is mitigating fixed costs. Restrictive measures such as operating to a maximum of 50 audience members has the same net effect as a complete shutdown for us. With the new emergency rent subsidy program, there is concern that arts organizations may qualify for only the additional 25% top-up support in the event of a total lockdown, and that's determined by regional health authorities. Expanding this eligibility criteria would greatly benefit a sector whose venues have been largely sitting empty since March.


    For our fourth recommendation—my personal favourite—if I were king of the world, I would create an arts recovery incentive fund. As we look to the future, a dollar-matching arts recovery incentive fund similar to the ministry's very successful arts endowment incentives program would enable arts organizations to tap into the philanthropy of our audiences, who would know that their gifts would be matched by the Government of Canada. I just believe all stakeholders would feel they have so-called “skin in the game” when it comes to recovery.
    In closing, Mr. Chair, on a personal note, other than our industry's staggering financial losses, the mental health of our members is of utmost importance. A professional musician I spoke to recently said with tears in his eyes that being a musician is all he's ever done in his life. An actress, who has the weight of the world on her shoulder, said that she's trained for this all her life, but now wonders whether it's time to leave the business.
    We need the creative sector. COVID-19 has been devastating to our emotional well-being.
    Charlie Chaplin once said that he likes to walk in the rain, so that no one can see his tears. I hope you can see us through the rain right now because we can certainly use your help.
    Thank you very much.
    Thank you, Mr. Mustakas. That was quite a powerful ending.
    Now we go to Music Canada with Patrick Rogers.
    Patrick, it's good to see you again. My best to you and your family, of course. You're no stranger to how things work around here. You probably know as much as anybody on this call.
    I'll just let you have your five minutes, sir. Go ahead.
     It's good to see you, Mr. Chair. Thank you for this opportunity.
    My name is Patrick Rogers, and I'm the interim co-CEO of Music Canada. I'd like to thank the committee for the opportunity to speak today.
    Music Canada is the trade association to Canada's major record labels: Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Normally, our work focuses on promoting and protecting the value of music, which helps artists and the businesses that support them to thrive and contribute to our economy and culture. However, in March when the Canadian music industry was forced to cancel the Junos the same week as North American sports were shut down, and as Canadians stopped gathering in large numbers, our members directed us to focus our efforts and resources on helping the most vulnerable individuals in our industry: artists, crews and everyone working the live-music space. The livelihoods of these individuals were among the first to be hit by the pandemic and will be among the last to recover.
    To help ensure that governments at all levels had accurate information to understand the pandemic's impacts and to develop effective relief measures, we partnered with Abacus Data to conduct national polling about how the pandemic was affecting artists and their fans. One study surveyed over 700 professional musicians so that we could better understand the impacts through their lens.
    Here are some important numbers.
    The report found that professional musicians perform, on average, nearly 100 times a year, typically travelling across Canada and the world to do so. Revenue generated from live performances in turn helped support an average of 11 other people, such as band members, technicians and other industry jobs. A staggering 85% of musicians agreed that without live performances they will have difficulty earning enough to pay the bills.
    The most important number is zero. There are zero live shows, zero festivals and zero gigs as artists, fans and the industry have understood them for generations. With this in mind, we've spent the pandemic amplifying the voices of artists in settings like this and assisting colleagues and organizations, like Erin Benjamin of the Canadian Live Music Association, as they work to highlight the difficulties being faced by venues and the artists who play in them.
     In addition to surveying artists, we also commissioned a separate national survey of Canadians, with a first round released in May and an update in August. Those results were similarly startling. They underscored that the virus will keep Canadians, including identified music lovers, home long after they're allowed to attend events. About one in two of those live-music lovers believes that it will be six months or more after government restrictions lift before they'll feel safe returning to live shows and festivals, small and large indoor venues, and elsewhere. As time progresses, that concern has risen significantly.
    Our research also confirms something that we knew to be true: Canadians miss live music. While watching a concert online might scratch the itch, it's no substitute for the feeling you get from being at a live show. Canadians love live music, and they've told us that they desperately want to go back when they believe it's safe to do so.
    We know that live music will eventually return with the same energy and significance that it previously had, but government support is critical to ensure that it exists when we come out the other side. How do we get to the other side? Artists and individuals working in our sector need to receive continued and direct financial support—like the Canada recovery benefit—for as long as live-music venues are regulated, closed or only partially open across the country. These funds will be needed for longer than many expect. As we are witnessing now, the need will increase if the public health situation worsens.
    Lastly, Music Canada and our industry colleagues came to this committee last year to discuss the need for copyright reform. Virtually the entire Canadian music industry asked that a few simple amendments be made to the Copyright Act to help ensure that artists are paid when their music is played. The report from this committee, “Shifting Paradigms”, provides a great road map for upholding that principle.
    I hope that this committee and the government will return to that work soon because with the pandemic eliminating opportunities to tour for artists, the fallacy that artists don't need copyright protection has been exposed for the myth that it always was.
    I'd like to thank the parliamentary secretary for her continued championing of this principle, both during the writing of the report and now in her new role.
    I hope that, as you turn your minds to assisting the music community in the face of the pandemic, you will again recommend addressing those copyright measures, which will help bring relief.
    Thank you for your time today. I'd be pleased to answer any of your questions.


    Thank you, Mr. Rogers.
    Canada loves live music; indeed we do. That's a valid point.
    Folks, now we're getting into the questions.
    I'd just like to say something to our witnesses: If you want to get in on a conversation that's happening, you have to get the attention of the person asking the question. You can do that by waving at the screen; hopefully, the questioner will pick that up. I ask that the questioners please have a look at their gallery view to find out who wants to weigh in.
    This is the first time in my life that I've ever chaired or been involved in a committee meeting where I'm the only member in the room. I'm not sure if I'm lonely or intoxicated with power. I'll figure that out, hopefully, by the end of the meeting.
    Nevertheless, let's try to do this as quickly and smoothly as we can because it's a very important issue.
    Mr. Shields, you have six minutes, please.
    To the witnesses, thank you for being here today. I appreciated your comments.
    Starting with Drayton, you listed five different things that you thought would help. Could you prioritize them in any given way? Then, with the bottom line, what amount of money would it take to get you out of what you've spent and what you're in debt for and get you ready to be going next time?
    I would suggest that the wage subsidy would be at the top of the list. Mitigating costs would be second. The incentive fund, of course, would help us in recovery. That is moving forward and raising money for the recovery and growth and generational change that we would like to do.
    For us, as I guess a relatively modest-sized arts organization in this country, our 2020 losses will be close to $3 million. Next year, moving into 2021, if there is no programming, with just the fixed costs alone and just a very small core staff left, the losses will be over $1 million. One of the problems in 2020 was that because of our collective bargaining agreements with actor unions, advance royalties, creatives and so on, a number of buyouts cost us nearly $1.5 million.
    We won't have that next year, obviously, because we have not contracted anyone. We're looking at, next year, at least a $1-million loss without even putting a key in any of our theatre doors.


    When you give those numbers and you talk about the wage subsidy being critical to moving forward, how are you going to recover out of that deficit? You're saying you weren't allowed to qualify for the $55 million.
    Well, I think we need our staff to mobilize. We need an opportunity to raise money from our stakeholders. All we can do is wait until it's safe to go back into a crowded auditorium. There are surveys being done throughout North America saying that even when it's safe to do so, there's a 40% chance that some people will not be back right way.
    It will take some time. We need staff to help us raise money and have campaigns to ramp up for future performances and so on.
    Could a cash infusion be a piece of what's going to be able to make you survive?
    Certainly. What I fear is that if this is prolonged....
    We're fortunate, because when I started the theatre company 30 years ago, we created a small stabilization fund that we put money into every year. We've been living off that for the past few months. Also, a number of our patrons who had bought tickets in advance left credits for us. We're using the cash from those credits as well, which will be a problem down the road when we do recover and they want to purchase tickets and they want to use their credits.
    That's the situation we're in, unfortunately. If we had not had that stabilization fund, everything we worked for, for 30 years, and all the grassroots people who helped us, would have been gone in three months. We wouldn't have been able to survive.
    That will be a critical point when you talk about the recovery piece. If you do have that lag in attendance, that will be a problem at the other end.
    Correct. You know, creative people and the arts sector are very good at doing business with limited resources. We have mitigated as many losses as possible. We've kept operating costs as low as we can. It's just, unfortunately, the fixed costs. We personally are a victim of our own success. We have seven venues across the province. Without putting a key in any of those doors, just the fixed cost, without salaries, is over $800,000.
    We need to survive through this. Any of our suggestions will definitely help.
     The one last thing you mentioned is the mental illness that people probably don't see, the mental health of the artists and what we may lose to that. Do you have any thoughts on how that could be dealt with?
    We need help. We need resources, to be honest.
    We tried to do a short web series. We brought in some singers individually, and I have to tell you, for them it was an hour of normality, but I witnessed a sadness. I witnessed a weight on shoulders. I've witnessed physical changes in these people who have not been able to get on stage and perform. It's been months and months.
    I certainly would recommend number five, that there be support for artists when it comes to mental health.
    Thank you.
    Mr. Louis, you have six minutes, please.
    Thank you, Mr. Chair.
    Thank you, panellists, for being here.
    This is very emotional testimony from everyone, and it hits very hard.
    I will follow up where Mr. Shields left off. It's too important to pass up the opportunity.
    Mr. Mustakas, you described an artist saying that being a musician is all he's done for his entire life. That resonated with me because, until a year ago, I would have said the exact same thing. Theatre is a big part of Kitchener—Conestoga.
    We all know that great art comes from struggle, but we haven't seen struggle at this level, at this depth, so I want to speak more about mental health.
     I know that these artists and the people around them.... It's not just the artists; it's all of the workers who are on and behind the stage. Those programs we're talking about can help people get through.
     I'm also concerned about our younger artists who are just trying to get into the arts. Is there any way to pair the two that you're talking about, supporting artists to help with the younger generation and seeing if we can help them get in? That way, they're helping their own peers.


    We certainly need the support. We have had a very successful youth program over the years that we're expanding. We believe this is an area where we will be most effective on generational change.
    I know a lot of young people who are in acting schools and musical theatre programs and who study music and so on. I'm worried they won't have a place for an outlet when they're done. Any support we can get for them, I think, is critical. We miss our musicians. There's nothing like live music.
    The other thing I should mention—it's not only the artists and the young people—is that we received just recently over 600 comments from our theatregoers. Many are of an older demographic who miss what we do and who tell us what a big part of their lives live theatre and live music have been. We have to think about all of them, as well. As soon as it's safe to do so, we will be back.
     You're absolutely right, Mr. Louis. Great things come from struggle, from the bottom up. That's when community comes together. You can see the poster above my shoulder on Les Misérables if you want to talk about struggle.
    We do need to not forget the grassroots who are our future as well.
    I appreciate that. As you say, it's not just the people on stage; it's the people who are supporting them, the whole industry in general.
    Again, I've been to countless shows through Drayton theatre in St. Jacobs and other theatres. We talk about the experience; it's not just someone coming to the theatre. Maybe you could elaborate briefly on the restaurants and the shops and what they're adding to the economy. You mentioned the $12-million budget getting stretched to a $60-million impact just in our region alone. Maybe you could expand on that and how important that is.
    I've always believed that what an audience member sees on stage is the icing on the cake. We believe in the entire experience from the moment you think about going to the theatre.
     We partner with restaurants and other attractions in the hospitality industry that's, obviously, been hit hard. We partner with our tourism organizations as well. They, obviously, have been hit hard as well.
    We look at this as a full experience. We absolutely know that any location we've ever gone into has seen an immediate economic impact on the restaurants, hotels and other attractions. We can't forget that side of what the arts and the music industry do. It's just like sports, of course. It's really critical to all the other sectors as well.
     I appreciate your bringing recommendations because here on this committee we are all focused on helping and supporting, and we're looking for some solutions.
    I wonder if you could elaborate on the arts incentive recovery fund you propose, on what you had in mind, because so many people in your organization and many others have a loyal fan base. You have people who, as you said, are missing the theatre and want to be there and want to help out, and if you ask them to step up financially, many of them, if they have a possibility to do so, would step up and help out.
    How do you see something like that working?
    It's the incentive portion of this. We know it works when you can tell someone that if they donate $100, it will be matched by another person or another organization, the government. If we could convince the federal government and the provincial governments to participate, that $1 would turn into $3.
    I feel those are the individuals, the stakeholders who want recovery and are willing to help, and it is an incentive.
    I'll give you a personal example. A few months ago I held a board meeting here with volunteer board members and I said I would match up to $25,000 to encourage all of them to help. The first board member walked by me and said he'd match the whole thing. It was tough on me, but it worked.
    That is the kind of incentive there is, and it has worked very well with the arts endowment incentives program to create endowments where we can't touch the principal. It's just the yearly payout, but in this particular case it would bring everyone together in a grassroots movement. You would partner with government and individuals and business and municipalities and all—


    Okay, thank you, folks.
    Sorry, Mr. Mustakas. I thoroughly enjoyed what you were saying but the clock tells me I have to say otherwise.


    Mr. Champoux, you have the floor for six minutes.
    Thank you very much, Mr. Chair.
    I too would like to thank the witnesses for being with us today and helping us understand the effects of this pandemic on the cultural industry.
    I'd like to put my first questions to Ms. Drouin.
    You have described the state of the industry from ADISQ's point of view. We know that the industry is in a crisis situation. That is precisely why the committee is conducting this study.
    If nothing is done very quickly, that is early in 2021, if you don't get any additional money beyond what is already promised and if there is no serious revision of the Broadcasting Act to include safeguards, what do you think the result of such inaction in the face of the current crisis will be?
    I realize I forgot to describe the mission of the association I work for. ADISQ represents independent music producers in Quebec and in the greater Canadian francophonie. I wanted to clarify that.
    As I said earlier, the whole community continued to work, whether it be authors, artists, performers, musicians, producers or broadcasters. These people stayed active and tried to stay in touch with the public. If nothing is done, the work that we have been able to do for some time will not be able to continue. Ultimately, we risk losing everything we've built over the last 40 years.
     What we have built over the last 40 years is a star system, supported by the artists who are loved by the public and the companies that support them. That's precious. Of course we're talking about the artists, but we must never forget those who journey with them. If they were to appear before you, artists would tell you that they are more successful when they are well guided by companies. We finally have strong Canadian companies that are developing artists' careers and supporting them. We have managers and a host of other tradespeople who contribute to the career development of artists.
    We risk losing not only artistic careers, but also an important industrial infrastructure that exists to receive new artists and develop their careers. They are working to ensure that we have access to new music, so that tomorrow morning we are not forced to listen only to our best hits or classics. They work so that one day, in a burst of nostalgia, we can listen to the old songs of 2020.
    For the moment, we have to keep creating these songs. We need to distribute them throughout Canada, Quebec and the entire francophonie.
     That's what we risk losing if we don't help artists, performers and the businesses that support them.
    In 2020 particularly, we have seen artists show a lot of creativity, as one witness mentioned earlier. It's obviously the nature of artists to be creative and to find ways to do things with the means they have.
     Do you feel that there will be something positive left from the way artists have reorganized themselves to disseminate their work, to be heard and seen, and to continue to bring their talents to the world?


    Yes, there will be something left of it. I think that just as teleworking is now possible—we're seeing each other through Zoom for this committee meeting—some things will remain, and may even be easier.
    There will be something left of the virtual show. Now, everyone will tell you, even the other witnesses who are here today, nothing can replace a real stage show. The on-stage show is also a physical manifestation of our culture, everywhere in the territory. We want it to once again become the driving force of our industry.
     We can certainly further improve the show offer with these new technological tools, when they are better used and better understood. The offer may be improved, but I think there is nothing like a live show.
    With regard to the economic update that will be tabled next Monday, I have a few minutes left to ask you whether there is anything in particular you expect or hope to see for the cultural industry.
    Yes, we're still hoping to see something.
    During pre-budget consultations, we presented requests for the music industry. We would be very happy to see them granted in the budget update. If they are not, we'll keep going and wait for the next budget.
    Thank you very much, Ms. Drouin.


     Thank you.
     Ms. McPherson, please go ahead, for six minutes.
     Thank you, Mr. Chair. I'd like to take a moment to thank all of the witnesses for coming, and for sharing their stories. It is really a desperate situation, and I recognize the position you're all in.
     I was flying to Ottawa to be in the House this week, and I sat beside a musician on the plane who has left the industry. He is a young musician, and he couldn't make ends meet. He couldn't stay in the sector. He said this is something he's heard across the board over the last eight months. It's really devastating to see things like that happen.
    I'm going to follow up a bit on Mr. Louis' intervention. I'll ask Ms. Drouin to start talking a bit about what we can do to encourage young artists to remain. How we can support that? The New Democratic Party has been pushing for a guaranteed livable income.
    Do you think that might be an opportunity that would be useful for the artistic community?
    For sure, it's very important. In our music industry, we deal with authors, musicians, interpreters and the companies. It's very important that each group has access to specific money for them. It's important, through the Canada Council for the Arts or through another program, that the artist has access to some money to be better at what they're doing as an artist. Each group should have access to that kind of money.
    At the same time, the best way to make sure that we make a living out of our music is to work, to have an album, to promote it and after that to do concerts and shows. The money is in the live industry. As I said in my presentation, 75% of the live sector goes back to the artist, the musicians and the technicians. The best way to make sure that people make a living is that they work and have the essential means to promote them, promote the concerts and to have access to the Canadian public wherever they are in Canada.
    For sure, some direct access for the artists, authors and other groups, but at the same time, we need to have access to promote the activities and the companies that are working with them.


    Thank you very much.
    Maybe you could also comment a little bit on how the shutdown of venues has had that deep impact and what that's looked like for those venues. I know in my riding of Edmonton Strathcona we have a number of live music venues that have reached out to me because they just don't know how they're going to survive the coming months.
    As I said, we did a survey among our members and most of them fear that 2021 will be even worse than 2020 because we don't see the end of it. In Quebec, everything is closed down until January 11, so we don't foresee any clear openings of the venues. Even if we come back in the arenas, will people be there? We don't know yet. It means that we need to have access to some support for a longer rather than shorter period of time. It's not a question of months; it's a question of years. We hope that this will be understood very clearly by the government.
    If I could jump in here on this, I would like to agree with everything that my colleague has said here, from the industry.
    I do want to make the point that—I think we've seen it in the past year—we saw garden centres open, but we were a long way from the Rogers Centre being opened. We need support for that to continue. For as long as regulations remain in place to stop these things from happening, artists will continue to need support.
    Other than that, I completely agree with Madame Drouin.
    Mr. Rogers, I'll ask you a couple of questions.
    I'm interested in how this all rolled out. When the pandemic was announced, for artists who already had shows in the pipe or who already had tours, what did they lose when that all shut down?
    For example, I had tickets to see Corb Lund in Ottawa in May. I was super excited and of course that was cancelled. That was then delayed and we had tickets for December, which has also now been cancelled. As much as I would love to see Corb Lund live in Ottawa.... What did they lose and what were the impacts of those?
    The experience has been devastating. The dollars speak for themselves. The issue of refunding tickets, the lost opportunity.... The real effect on careers as a whole has required an entirely different look. Within the industry there's a model: You work on your album, you record your album and you go on tour. All of this is now in flux.
    Whether you are a major label artist or you're an artist just getting started, this entire situation has thrown the industry for a loop and that is why we're here today. It's why our members have asked us to put our focus on that experience.
     Thank you.
    Now, Mr. Aitchison, you're up for five minutes, please.
    Thank you, Mr. Chair.
    I think I'm going to focus a bit more on Mr. Rogers. I appreciate Mr. Mustakas. I come from an area where we have things like the Festival of the Sound, Muskoka's Huntsville Festival of the Arts. I'm very familiar with those smaller festivals, even smaller than your organizations, and have been chatting with them regularly about what they need. I really appreciate your comments. I'm really intrigued by the incentive-based model of matching dollars.
    Mr. Rogers, I understand the music industry really not at all. You think about the music industry as big names, artists who are worth millions, especially when you hear the names Sony and Universal Music. I think it would be helpful for me particularly, and maybe others, to understand a little bit about who you represent. It's obviously not just the gazillionaire musicians we all know and have heard of before.


    I'd be remiss if I didn't point out that my family traces its roots to the heart of your riding, Port Sandfield, and—
    Huntsville is actually the heart. I don't want to interrupt you.
    Mr. Patrick Rogers: All right. Absolutely, yes.
    Mr. Scott Aitchison: I'm from Huntsville, so that's the heart. I kid.
    Go ahead.
    At Music Canada we do represent Sony, Warner and Universal. These are major labels with big operations here in Canada, full of Canadians making Canadian music at all levels of the industry. The industry is one massive ecosystem that requires everyone, from the artist you haven't heard of today to the artist at the top of the charts. We at Music Canada try to be passionate advocates for all musicians and those who help them.
    You're right. The industry is very different. Madame Drouin has a very specific focus on Quebec, and it's an important role. We have our focus. During this time of crisis we have tried to place our resources, our time and our effort into ensuring that the artists you haven't heard of yet have an ability to break out after the pandemic; and that's by making sure they're supported, that's by making sure they're still here. It's one of the reasons that our members and others in the industry made commitments to the Unison Benevolent Fund, which I would strongly recommend the committee look into further. This fund existed before the pandemic to help artists who found themselves on hard times. Obviously now those hard times are wide-reaching. We are strong supporters of that organization.
    I'm wondering about recovery and start-up, again one of the reasons that I liked Mr. Mustakas' idea about the incentive. I have this perception that live music is going to be easier to get started than things like plays and musicals, those kinds of productions and the scale of which.... Maybe that's completely incorrect.
    Could you just give me a quick answer on that, too, please?
    I would put everyone in that spot in the mass-gathering bucket. Any industry that requires a large group of people to be in a smaller area is going to be challenged with the medical information that we have now. My colleague, Erin Benjamin at the Canadian Live Music Association, will probably have the best answers for exactly how quickly people can get together. What you're going to face is an understanding from both the population and the medical situation. That mix is what we're going to finally determine when people get on stage again.
    Mr. Mustakas, I'm just thinking that things like community theatre take a little more to put together.
    I'm wondering about the difficulty, cost-related, to getting going again.
    There's going to be a new cost to recovery because we will have lost, I think, to other industries some very talented, creative individuals. It will mean a new sense of training and coming up to speed that is going to take a number of years, unfortunately.
    One thing I would like to add is we talk about the higher tier musicians or actors who are successful, and financially successful. We have to remember that there are hundreds of thousands of others early in their careers. Their secondary industries have closed down as well. Musicians can no longer teach. They're trying online but it doesn't work as well. There are catering jobs and bartending jobs. That's what it is to be an artist, unfortunately, in early career, so—


    Thank you.
    Madame Brière, I understand that you're splitting your time with Ms. Dabrusin, is that correct?
    Yes, that's correct.


    Very well.
    The floor is yours for two minutes and thirty seconds.
    Thank you, Mr. Chair.
    My question is for Ms. Drouin.
    Thank you for accepting our invitation.
    As you have explained, the music industry is heavily impacted by COVID-19. We are well aware of and sensitive to the issues affecting our local artists. We want to continue to offer them a support plan, as we did through the emergency fund, which enabled us to provide $500 million to organizations responsible for culture, heritage and sport. Phase 1 helped people who had already received funding. Phase 2 was more open to everyone.
    I met with the Conseil de la culture de l’Estrie, where I was told that there was a loss of skilled labour in the entertainment and artistic production industry. Due to the interruption of show productions, many technicians and specialists have moved to Montreal or have opted for another career.
    Could you tell us a little bit about the scarcity of skilled labour in the regions in our music industry?
    This is a real concern. Will it be a problem? It’s hard to quantify it, because there is no activity. But all the people we surveyed during those months of inactivity told us the same thing. Of course, it affects musicians and singers in the first place, but it also affects technicians and creators of all kinds who are needed to put on a show. It takes more than an artist and a microphone to put on a show; other people are needed as well, of course.
    We anticipate that some of these people will no longer be available or will have reoriented themselves. Some of them already are moving towards the audiovisual sector, for example, which is a little more open than the others. Some people are also trying to move right away into the television and film sectors, which are already more open.
    So this will be a real problem. It would be catastrophic to lose this workforce. It is an essential fabric that must absolutely be preserved.
    With regard to the—


    Ms. Dabrusin, please.


    Thank you, Mrs. Brière.


    Thank you for sharing your time.
    As part of the $500 million in emergency funding, almost 40% of that money went to non-existing recipients, including what I thought was really special in my community when I saw it. It was support for live venues and the infrastructure that Madame Drouin was talking about, the promoters, all of the people who work on that side. Focusing on the wider picture infrastructure question, how important do you think it is to quickly reform the ecosystem of broadcasting or copyright, the broader piece, to be able to do the recovery properly?
    Yes, it's urgent. I hope that I will be in front of you next week to discuss Bill C-10. It's something that we've been waiting for. I've been at l'ADISQ for 28 years, so I've seen a lot. We've been waiting for this bill to be a reality since, I would say, 1999, since the bad decision from the CRTC to exempt the new media order, as it was called at the time. It's an urgent matter because finally we'll get some money from the online services that use our music, and it is essential that they promote it and contribute to the financing of this. It's very important. It's the same with the Copyright Act; it's very important that we deal with that very urgently, just after the Broadcasting Act.


     Parliamentary Secretary, I would just add to that. When we have talked previously about the Copyright Act, we've tried to make clear how important the functioning framework of it is: that in case anything were to happen to a particular artist, they would continue to get paid when their music is played. Now it has happened to all artists, and their ability to tour has been eliminated. The need to make sure that principle is upheld is now as clear to us as it has ever been.
    Okay, folks. I have to hold it to that. That has to be the final word for this panel.
    I thank all of you for your contributions. That was a great conversation as it unfolded over Zoom.
    I would like to thank our witnesses for coming today.
     Madam Drouin, thank you very much.
     From Drayton Entertainment, Alex Mustakas, artistic director, thank you so much.
     Patrick Rogers, our list here says “vice-president”, but you said “co-CEO”. I'm assuming that congratulations on your promotion...?
    It's interim co-CEO, but thank you so much.
    Thank you very much, all of you. We'll suspend for a few minutes for technical reasons.



    Welcome back, everyone, to the second part of our committee.
    I'll get right to the introduction of our witnesses. They are Yvan Noé Girouard, director general of the Association des médias écrits communautaires du Québec; from News Media Canada, John Hinds, president and chief executive officer; and, from the Rosebud Centre of the Arts, two guests, Paul Muir, education director, and Bob Davis, volunteer board governor and general manager of the Old Trout Puppet Workshop. Well, how about that? Love the name.
    We're going to start with five minutes from each group.
    We're going to start with the Association des médias écrits, with Monsieur Girouard.


    The floor is yours for five minutes.
    I would like to thank the members of the Standing Committee on Canadian Heritage for giving me the opportunity to express my views on the shortcomings of certain federal assistance programs for community media.
    First of all, I would like to introduce the Association des médias écrits communautaires du Québec.
    AMECQ was founded in 1980. It represents 80 newspapers and magazines that are non-profit organizations administered by a volunteer board of directors. These newspapers and magazines represent the local population taking charge of local information. They are generally produced by a majority of volunteers.
    I want to make it clear that the word “community” does not have the same meaning in English as it does in French. In English, “community newspaper” refers to a newspaper, usually private, that serves a community. There is no distinction between non-profit and private newspapers. In French, the term "communautaire" means non-profit organizations. This creates confusion in the presentation of assistance programs to the media.
    I would like to touch on four specific issues: the Local Journalism Initiative; the Community Media Strategic Support Fund, which supports official language minority community media; the media tax credit; and advertising for community print media.
    First, let’s talk about the Local Journalism Initiative.
    While commendable at first glance, this initiative put forward by Canadian Heritage and administered by News Media Canada is not appropriate for Quebec community print media. The Association des médias écrits communautaires du Québec deplores the fact that this program is in no way intended for its member newspapers and magazines.
    On its website, News Media Canada promotes the Local Journalism Initiative in these terms:
In some parts of Canada, residents do not have access to journalism about community issues and institutions through local newspapers, community radio, television or other news media. These gaps in coverage mean that citizens do not have necessary information about news, issues and events that affect them and their day-to-day lives.
    AMECQ mainly deplores the fact that this program is only intended for media covering a region described as a news desert or as an area of news poverty. Therefore, not all of our members are eligible for this program.
    The Local Journalism Initiative says it provides funding to news media to hire journalists to cover civic institutions and issues of importance in underserved communities. This is what it says on the News Media Canada website:
The Local Journalism Initiative supports the creation of original civic journalism that is relevant to the diverse needs of underserved communities across Canada...
    Among other things, a media outlet applying for a grant is required to describe how the area it wishes to cover constitutes a news desert or an area of news poverty, and to explain why its publication is qualified to fill this void.
    AMECQ is therefore asking that this program be revised so that community print media in Quebec can have access to it and that concepts such as “underserved community”, “news desert” or “news poverty” be abolished.
    I would like to bring to your attention the simplicity of a response provided by email to one of our members whose request was turned down. They told him that a new appeal had indeed been launched in Quebec, that the Local Journalism Initiative was being publicized as widely as possible and that this was the reason why this member had received the flyer. They told him that if he wished to re-apply, they would be happy to do it for him, but like him, they honestly did not see how the end result would be any different.
    AMECQ also regrets that a new invitation to take part in this program was sent to its members on the evening of January 24, 2020, when the deadline for registration was January 27. Did they invite them in order to clear their conscience? If News Media Canada wanted our members not to register, they couldn’t have done better.
    I would now like to say a few words about the Community Media Strategic Support Fund, which supports official language minority community media.
    Although commendable as well, this program is in no way accessible to our newspapers and magazines. Yet, even if they publish in French in a province where the official language is French, these media would need financial assistance from the federal government.


    Now I'm going to talk to you about the media tax credit.
    On April 17, the Department of Finance announced in a press release measures to support Canada's information sectors during the COVID-19 pandemic. These measures include a 25% refundable Canadian journalism labour tax credit.
    Again, this initiative is commendable, but difficult to apply to community print media. Indeed, to be eligible for the tax credit, a newspaper must employ at least two journalists working an average of at least 26 hours per week for at least 40 consecutive weeks, and they must devote at least 75% of their time to producing news content.
    Most community newspapers wishing to take advantage of the tax credit have only one employee who combines the duties of reporter, photographer, editor and coordinator, or even general manager. Newspapers—


    Excuse me, Mr. Girouard, but your five minutes are up.
    Thank you.


     Next we'll go to News Media Canada with John Hinds, president and chief executive officer.
     Thank you for inviting me to speak today.
    My name is John Hinds, and I'm the CEO of News Media Canada.
    We are the voice of Canada's news media industry. We represent over 600 newspapers and news media publications in all provinces and territories. Our membership includes daily and weekly community newspapers and news sites, and ranges from the largest urban daily to small community newspapers in rural and remote regions.
    The news media sector in Canada continues to experience challenges that have only been exacerbated by the pandemic. Over the past few years 250-plus newspapers have closed, and in Saskatchewan alone we have lost over 20% of our newspapers. That was before the pandemic. In the initial months of COVID, we saw another round of closures and mergers, and many smaller newspapers stopped publishing while larger publications saw newsroom layoffs. As a result, there are now more areas of news poverty and news deserts in the country.
    Our greatest industry challenge is declining advertising revenue, particularly print advertising, with declines of up to 20% a year. In many ways, COVID simply sped up that trend. At the beginning of the crisis, advertising plunged by up to 75% in many markets, and the industry is still struggling with advertising declines in the range of 30%. Sectors like events, travel and local retail are just not advertising, which has dramatically impacted small community newspapers that rely on print advertising.
    What is particularly frustrating is that the impact of COVID on our industry defies the rules of economics. There has never been more demand for our products while at the same time there is so little revenue. Millions of Canadians, nine out of 10, continue to engage with their local news media for trusted news and information about COVID in their communities.
    For many newspapers, particularly community newspapers, government advertising was traditionally a major client. Federal government advertising has fallen to almost nothing in the last few years. This defies logic given that our products are read by more Canadians than the digital giants. At the beginning of the pandemic, the government announced a $30-million communication budget, but unlike many provincial governments, there was limited placement in our news media. The government can deliver on its mandate to communicate with Canadians by implementing a strategy of placing ads where Canadians are looking for trusted content and advertising.
    Having said that, I want to acknowledge and thank you for the support provided to assist our industry. I also want to acknowledge the impressive team of officials at Canadian Heritage who understand the issues, and are working tirelessly to find solutions.
    I want to highlight two areas that allowed the industry to continue to operate during the pandemic.
    The wage subsidy was, and continues to be, a lifeline for most publications, and has allowed most to continue to publish and avoid laying off staff. We believe that this program needs to be maintained unless revenue rebounds.
    The aid to publishers program has also been a lifeline. This program, which dates from before Confederation, has traditionally been available to small subscription-based print community newspapers. As part of the COVID relief plan, funding was increased by 25%, which allowed many papers to continue to publish. One-time funding was also provided to non-subscription newspapers, and we would ask that this be continued until at least 2021, given the market conditions. Ideally, this funding would be permanent and increased as smaller community newspapers are increasingly challenged in the digital world.
    The future of news media is digital, and all our members are looking to a digital future, though that future differs from publisher to publisher. However, without government action to regulate the digital space, the future is grim. Two global monopolies, Google and Facebook, control 80% of the digital ad revenue in Canada, and that continues to grow every year.
    Real news costs real money to report, but monopolies are cutting newspapers off from the sources of revenue to pay for it. Their business models are based on using news media content that they do not pay for. Governments and other democracies are fighting back, and we are pleased that the commitment to regulate the monopolies was included in the Speech from the Throne.
    We believe that the approach that is being undertaken in Australia is the perfect solution in Canada. It allows newspapers to negotiate fair compensation with monopolies, it levels the playing field, and it does so without relying on government funding, new taxes or user fees. We know that all our members support this initiative, and we hope that you would move quickly on this file.



    Thank you.


    Thank you.
    We'll now go to the Rosebud Centre of the Arts.
    Mr. Davis, please proceed. You have five minutes.
     Thank you, Mr. Chair and committee members, for the invitation to attend, and specifically Mr. Shields, who invited us here today.
    We're happy to be here. Rosebud Centre of the Arts is located in a small hamlet of just 92 people, northeast of Calgary on the way to Drumheller. It's home to Rosebud School of the Arts, a post-secondary arts training institution and Rosebud Theatre, a professional live theatre. We have additional dining services for patrons who attend our theatre performances to enjoy a meal before attending the show.
    Our scope of operations in a typical year involves around $3.5 million, and of that $3.5 million, roughly $2.5 million would come from theatre revenue through ticket sales and dining services.
    Our professional productions run from March to December. We have as many as five in a year, along with two student productions, and we attract up to 35,000 or sometimes 40,000 people to our hamlet of 100 people. They are predominantly from the Calgary area, but people from all regions of Alberta do travel to our community. We also have accommodations, gift shops, a museum, galleries and resident artists.
    We have a staff of about 20 people, but we employ up to 150 people part-time, again predominantly residents from the region.
    We're the largest employer in Rosebud and one of the largest in Wheatland County. We're a socio-economic driver in the area. The work we do generates business for businesses and employers around us. We're part of the provincial arts and education tourism fabric, partnering with Travel Alberta, other post-secondary institutions and other arts organizations in Alberta.
    Uniquely, we're a guild school. We follow a mentorship and apprentice educational model, which is unique in Canada. We receive no provincial funding for our education, and our public funding for the arts is less than 2% on an annual basis.
    Bearing all of this in mind, you can understand how COVID really hit us hard, as it did, I'm sure, for many other arts organizations that you've heard from. Our theatre operations were closed entirely in 2020. We were attempting to run another show here for Christmas, but just today that show too was suspended due to COVID conditions in Alberta.
    We're experiencing an over $2-million loss in revenue from ticket sales. More specifically, we're experiencing over 30,000 patrons not coming to our community. That has ripple effects outwards on other businesses and entrepreneurs in our region in terms of the accommodations, the retail sector and all the employment that goes along with the work that we do.
    We are thankful for the CEWS program, which did support our operations to a degree this year, and I'll have more to say about that in a moment. However, by and large, we have been unable to access the emergency funding or regular funding that's been made available through the Canada Council for the Arts or Canadian Heritage.
    In particular, one of the biggest challenges for arts organizations has been the administration side of things to manage through COVID. Certainly on the arts side, there's been less work for artists, but on the administration side, the amount of work has been greatly increased in terms of budgeting, managing human resources and dealing with communications and stakeholders.
    One of the gaps in the federal aid programs is that unless you are already registered with the Canada Council for the Arts and recognized, you do not have access to the emergency funding provided by Canadian Heritage, and the CEWS program is insufficient to support arts organizations when there is no corresponding revenue coming in to help offset costs.
    We look forward to discussing more of these issues with you.
    Thank you very much, Mr. Chair.


    Thank you, Mr. Davis.
    We're now going to proceed with the questions. Folks, I'm going to be a little bit more strict on this because of the time we lost at the top.
    Let's get started with Mr. Waugh for six minutes.
    Go ahead, please.
    Thank you, Mr. Chair.
    Thanks to our guests today.
    Mr Hinds, it's good to see you again.
     The government announced $30 million spread out over newspapers, radio and television. How much did the newspapers get out of that $30 million that the government claimed that it sent out?
     I don't have a direct number on it. I think it was in the neighbourhood of $2 million to $3 million. For most newspapers, it was one or two ads in the course of the campaign.
    Was that enough?
    I don't think it was enough, obviously. Was it enough to communicate effectively? I'm not sure. When we look at what a number of the provinces did, here in Ontario and Quebec, they had formal campaigns when every day or every week they ran ads in the newspapers to provide information to readers about the pandemic.
    I think it was very effective and obviously was very helpful to the newspaper. People were looking on the sites and in the paper for information about COVID, and they were looking for their local newspaper.
    The criticism I've received in our offices is you get one or two ads in the big dailies and then the weeklies; the community newspapers are left out. Is that the truth?
    I think in this campaign they did run ads across the country. One of the things we always hear is that community newspapers are difficult to buy and it's complicated and people don't like doing it, but I think the government pays a lot of money to agencies to do that, and they should do it.
    I think in this campaign the support was pretty much in both communities and dailies in digital and in print.
    On your website you state how national newspapers are filling the COVID-19-induced ad void. How are you?
    We're filling it with information. I think that's the issue. We had been operating without the ad revenue.
    During the campaign one of the things we tried to do was work on a system of a programmatic ad network to compete with Google and Facebook. We've set that up, we're running it and we're hoping the federal government will work with us on that because it's a way of buying equivalent numbers or views across Canada in the program advertising market using Canadian sites.
    You are filling it and you're not. I look at the papers every day across this country. Those that had 24 pages are now down to 16 pages a day. I look at the Regina Leader Post and the Saskatoon Star Phoenix that have pulled Monday home delivery.
    Many people still don't have digital at home and yet they're still paying for Monday home delivery that's not coming. I think the consumers are saying this isn't fair. In my case, I'm paying $31 or $33 a month for the Saskatoon Star Phoenix to be home delivered Monday through Saturday and yet Monday's paper doesn't show up.
    I think that's an issue for consumers. They feel jaded on this. Nobody has stood up on their behalf and yet National Post coast to coast has made this decision. Where the consumers now are feeling jaded from the weekend news, they don't even get their information in the newspapers until Tuesday.
    I'd like you to comment on that.


    I think it's difficult. As I said earlier, it costs a lot of money to produce quality news. We're finding that nobody wants to put an ad in a newspaper on Monday; traditionally it has been the lowest readership day. The economics of distribution on Monday simply doesn't work. The alternative and the challenge that newspapers face is, if they aren't working, where do they cut? I think everybody's been trying really hard not to cut newsroom jobs, so the distribution costs on Monday is one of the ways to save money, but not cut newsroom jobs.
    I think we all understand that it's probably not the optimum for the consumer, but that is unfortunately what the current climate dictates.
    Mr. Girouard, I will go to you and AMECQ.
    Local journalism is really hard in this country; I don't have to tell you. To have one person in the newsroom today could be the norm. How are you doing this? Home delivery is even in question now. People are nervous with COVID to even pick up a newspaper off the shelves. How is your association, AMECQ in Quebec, dealing with COVID right now?
     Your time is up now. I apologize for that.
    I'll have to come back to you, Mr. Waugh. We're pretty tight on time.
    That's fine.
    Monsieur Girouard, if you can hear us could you please just wave your hand?


    Yes, all is fine.


    We're just checking to see if you're still there. I apologize. We have to go to the next questioner.
    Mr. Housefather, you have six minutes, please.
     Thank you very much, Mr. Chair. Thank you to all of the witnesses.
    Mr. Davis and Mr. Muir, on the last panel we had one of the theatres from my own riding, the Segal Centre, and I asked all my questions to them, so forgive me if I don't ask you questions. I did hear that your production of Anne Frank a few years ago was phenomenal. My cousin went to it and had rave reviews. Thumbs up to that. I'm sure I'll be speaking to you at a later date.
    I'm going to go to Mr. Hinds. Mr. Hinds, I was glad to hear that the support from the federal government, at least with respect to the aid to publishers and the CEWS, was very helpful to your organization. I, like many people, actually prefer print media to digital. I want to make sure our newspapers not only survive, but thrive. I'm a little dismayed to hear of the small percentage of ads that actually went to newspapers.
    Did you get a better number of ads from provincial and municipal governments during the course of COVID or were they also mostly going towards digital?
    No. We found that...different provinces have different.... Ontario and Quebec really stepped up in terms of print advertising and consistent, effective campaigns. I would say that, certainly in Ontario and Quebec, the government put...daily in the dailies and weekly in the weeklies and very much with an emphasis on print.
    Thank you.


    Mr. Girouard, has the Government of Canada or the Government of Quebec advertised in the publications you represent?
    It has only just begun. I saw advertising for the first time in December, but until recently there was none. To date, in 62 of our publications, the federal government has placed $35,000 worth of advertising, which is really very little.
    I understand.
    You talked about the various programs for which your members are not eligible. Near my home, there is a local newspaper that is entirely created by citizens on a completely voluntary basis. Is that the kind of organization you represent?
    Yes, absolutely.


    You talked about a program that is very important to me, the Community Media Strategic Support Fund, which supports official language minority newspapers. In my riding of Mount Royal, the majority of newspapers are local. From what I understand, you consider that there are gaps in this regard, because French-language newspapers in Quebec whose employees work on a volunteer basis, such as the ones you represent, are not eligible for this program.
    As you know, the Speech from the Throne spoke of the importance of promoting French in Quebec. So this is a failure, in my opinion. One of the ways to support French-language newspapers in Quebec would not be to implement a program for official language minority community media, but a program to support local community newspapers in Quebec.
    Could this help your members?
    Yes, absolutely. That’s what we would like.
    I would like to point out that 5% of national advertising is attributed to official language minority media. However, we are not in that situation.
    I understand. I think this should be discussed with the Department of Canadian Heritage. Indeed, offering support to media such as the ones you represent would be a good step forward. I take note of that.
    At the beginning of the meeting, you could not finish your speech because you had exceeded the five minutes allotted to you. Is there anything important that you didn’t mention that you could tell us in 30 or 45 seconds?
    There is the tax credit, which our members are not eligible for because two reporters are required—
    A point of order, Mr. Chair.


    Go ahead, Mr. Champoux.


    Thank you, Mr. Chair.
    Out of respect for the witnesses, I feel I have to point out that the sound quality on the French channel is inadequate. We can hear Mr. Girouard, but his voice is coming to us with an echo. I don't know whether the technical problem is the responsibility of the IT staff or whether it is because Mr. Girouard is using a channel other than the French one when he speaks in French. But it is very difficult to follow the conversation. I wanted to point out this problem because, in my opinion, Mr. Girouard's testimony deserves to be heard.
    Is that better now? Can you hear me?


    Yes, we can, but I don't think that's the issue, Monsieur Girouard. We may have a problem with the echoing that's taking place under the French interpretation, as Mr. Champoux points out.
    I'm going to stop for about two minutes to check out the situation.
    Monsieur Champoux, thank you for bringing that to my attention.



    We're back in session.
    You have one minute left if you want to continue your questioning, Mr. Housefather.


    I am just going to let Mr. Girouard finish what he started to say about the tax credit.
    About the tax credit, I was saying that organizations have to employ two reporters in order to be eligible for it. In community print media, that is practically impossible. Often, the papers are put together completely by volunteers; when they have an employee, that employee does everything. He is the reporter, the photographer, the editor-in-chief, and sometimes the CEO.
    We would like the act to be amended so that the number of reporters goes from two to one.
    Okay, I understand.
    As I do not have a lot of time left, I am going to yield the floor to Mr. Champoux.
    Thank you.
    Mr. Champoux, you have the floor for six minutes.
    Thank you very much, Mr. Chair.
    Once again, I would like to thank the witnesses for making themselves available to take part in today's meeting.
    I would like to ask Mr. Hinds a question, as the representative of News Media Canada.
    Your organization argues that the Australian model should apply in terms of the royalties to be imposed on the tech giants for journalism content. The government maintains that there are differences between the Australian market and the Canadian market and that it would be difficult to apply that model. That does not mean that it should be discarded. We can easily draw some inspiration from it.
    What are the advantages of the model that would be applicable here and that would satisfy the entire industry?


    Thank you.
    Obviously, while Australia is a country of similar media landscape and similar political landscape to Canada, any model would have to be adjusted to local context.
    What we like about the Australian model is its simplicity. We don't want to get into a situation where government is taxing and allocating stuff to media, because we've heard from a number of people, particularly a number of deputies, that that's not a way we'd like to go. This really allows the industry and the digital monopolies to negotiate fair terms for compensation. I think that's the thing about the Australian model that is appealing.
    The other thing that's appealing about the Australian model is, unlike the French model, which only deals with the compensation for the journalism content, the Australian model has a code of conduct. We've also seen in the last couple days the British government putting forward this idea of a code of conduct. The code of conduct regulates the ad side of it. When Google and Facebook want to change their algorithms, they have to give 30 days' notice. They can't boot things off and change things.
    I think what we like about the Australian model is that it doesn't raise taxes and it doesn't deal with government intervening in the marketplace, but it allows a fair market interaction between the platforms and newspapers.



    Is it not your impression that inviting each organization or company to come to agreements with those giants would create an imbalance, given the weight they may have when facing the giants at the bargaining table? Do you not think that it could create unfairness in the market?


     Yes, it could. One of the things again that the Australian model provides and one of the things that we're looking for in any model is the ability to negotiate collectively. Currently, as an industry, we're not allowed to negotiate because of competition rules. We can't negotiate fees with the digital players.
    What we would be looking for is the ability to negotiate as an industry for fair compensation. I think that is only fair to everybody, because we're seeing even right now that some of the digital players are offering licences, but they're only offering licences to the big players. We want to make sure that the same terms and conditions apply to a big daily newspaper as apply to a small community newspaper, so that we're fair across the country and we're fair within the industry.


    You talked about advertising, and I feel that Mr. Girouard will perhaps want to give us his opinion on the subject as well.
    Mr. Hinds, the federal government has been patting itself on the back a lot about the $30 million it has invested in the media across the country. It says that this will provide the media with the help they need and will give them some breathing room, especially regional media. We know very well that it is clearly not enough.
    It has also been mentioned that the government is investing a lot in digital advertising, which clearly means going through the tech giants. The result has been that there was almost nothing left for regional media. The figures that came out last year allowed us to confirm that. This year, we are learning that almost nothing has changed in that regard.
    What would you like to tell the government about its way of buying digital advertising in regional media, given that we are talking about several tens of millions of dollars a year?


    The thing is, in digital media, we're very interested in this, yet one thing we have to be clear about is that, for many of our members, digital is not relevant. They are essentially print publications and the way you're going to communicate with those communities is through print publications.
    On digital, we have worked very hard as an industry. We put forward the Maple Network Exchange, which is our digital players, our digital companies, who are looking to work with the government directly so that any digital money that is flowing from the Government of Canada to our audiences flows directly.
    As I said earlier, we reach as many people as the digital duopoly if we're used properly, and we believe we have an option there that would allow federal government advertising, digital advertising, to reach Canadians through Canadian channels and showing up on Canadian news websites, which is where people want to see it.


    Mr. Girouard, would a better way of buying digital advertising improve things for your members a lot?
    Are you talking to me?
    The print newspapers have their websites and are beginning to have a lot of digital advertising. With our advertising agency, CPS, we are beginning to use digital. We are only at the beginning, but things are starting to go well.
    I would like to go back to the federal government advertising. Last year, the 62 newspapers we represent received only $2,339 in advertising in total. This year, the amount has reached $35,000, and, for a few weeks, I have been seeing full pages appearing in our media. So it seems that some kind of blockage is being removed.
    However, that unblocking must continue after the pandemic. At the moment, it is advertising intended to promote health measures with a view to combatting the pandemic.
    So it is temporary.
    That is all this time I have. Thank you, Mr. Girouard.
    Thank you, Mr. Chair.


    Thank you.
    Thank you very much.


    Ms. McPherson, you have six minutes.
     Thank you, Mr. Chair.
    I would like to thank all of our witnesses for joining us today. It's nice to see some of the folks I've had an opportunity to talk to in recent days. I think it would be useful for me to start with my co-Albertans. I do have a few questions for Mr. Muir and Mr. Davis.
    You talked a lot about the impact that COVID-19 has had on your organization, the Rosebud Centre of the Arts. You talked about the deep loss of revenue because you have not been able to access the theatre revenues.
    What does the future look like for your organization? In what ways have you been able to pivot during COVID-19? What does it look like going forward? What are some very concrete actions you would like to see the Government of Canada take?
     One of the things is that we had to cancel the entire 2020 season, which Bob referenced earlier. Throughout the summer and the fall, as the COVID restrictions lifted a little, we did put on a show, not one that was scheduled but a one-act version of A Christmas Carol, which was super exciting.
    With COVID, we knew that we could only serve about 20% of the audience that we would normally be able to serve. We also created a film version of that play. It's now available on the Internet for people to watch.
    As for your question, MP McPherson, in terms of moving forward, as Bob indicated, our organization, our operating, has reduced by over two-thirds. When we look ahead to continued COVID restrictions through 2021, it's still quite bleak.
    Here's an interesting thing, though, that I find fascinating. Our student intake has increased. To me, that's hopeful. That says that there's a group of young people out there who are still interested in training to become storytellers and to become theatre professionals, while at the same time the theatre itself is almost not present.
    In terms of what the government might be able to support, we've run into a number of roadblocks because we are a unique organization. We're a theatre but we're also an educational institution that is not recognized under Post-Secondary Learning Act, etc., so we find ourselves in a unique place. We hit a roadblock within the post-secondary funding world, and we hit roadblocks within the professional theatre training world.
    One thing, as Bob was mentioning earlier, is the CEWS support. While we have been super grateful for the CEWS support, at the same time, it hasn't been enough. Of course the reduction of the CEWS is coming at a time when we are still unable to restart our main revenue generator, which is ticket sales.
    Do you want to add to that, Bob?
    Yes. There are restaurants, businesses and retailers that can generate revenue. As CEWS is reduced, there's revenue being generated by entrepreneurs in their businesses. In theatre, there's no revenue generated.
    CEWS is being reduced and, therefore, even more pressure is put upon the organizations because there's zero revenue coming in in the arts world when we're not able to present.
    One other little factor about the roadblocks is that Rosebud's been very proud of the fact that it has not relied on government support for many years. Less than 2% of our funding comes from government, which is rare in the arts world. However, when the time comes for us to seek a request or make a request for emergency funding, we are told that, because we have not received funding in the past, we are not eligible for funding going forward.
    You are, in fact, being penalized for it.
    Yes, we're being penalized for not being reliant on government funding. It's a terrible roadblock to face, because it's an emergency.
    I can see how that would be very frustrating. You probably know, but Edmonton Strathcona, the riding I represent, is a massive theatre community. It created a theatre district in our area that restaurants and shops depend upon. I absolutely hear your concerns, the need for flexibility and the need for the theatre to be recognized and a different sort of support for that.
    For my next questions, I'm going to switch gears a little. I know I don't have very much time. I would also like to ask Mr. Hinds a question.
    One of the worries that I have with the small newspapers being at risk and shutting down in regions, smaller areas, is the lack of training or the lack of capacity to build our journalistic expertise. Could you talk a little about some of the impacts you see from that?


     I think one of the challenges we see is on the attractiveness of the profession going into it. If you talk to the J-schools around the country, it's not one of the high priorities for really high-achieving students, and the reality is that it is hard to break in.
    What was interesting, though, is that, as you know, we are one of the administrators of the local journalism initiative program, and we had a meeting recently with the other administrators, where one of the common themes was the difficulty of trying to find journalists in rural and remote areas to fill those positions under the local journalism initiative.
    I think there is a role. What we don't see anywhere is any role in journalism development or media training funded by governments. Unlike the U.S., where foundations have stepped in and have done quite a bit of this, we just don't have access to that in the Canadian marketplace.
    Thank you very much. I'm quite certain that my time is done.
    We'll now go to Mr. Shields for six minutes, please.
    Thank you, Mr. Chair.
    Thank you to all of the witnesses for being here today.
    I have just one comment for Mr. Hinds before I go to Rosebud. As you mentioned, the amount of taxpayers' money in Canada going to Google—and the non-return—is a huge issue. I have many weekly newspapers in my riding that have suffered greatly from a lack of print advertising. They suggest that if the federal government would put taxpayers' money into print advertising instead of giving it to the big Googles and FaceBooks out there, they would survive.
    Rosebud, I really appreciate you being here today. As you say, you're in a small community, but you attract tens of thousands of people from the surrounding area. As you have said, the possibility of receiving funding is not something you've looked for in the past, but in an emergency situation....
     As you are now millions of dollars short and you have students who want to be in this profession and are attracted to what you represent in the community, what suggestions might you have for getting out of this conundrum and this emergency we're in? What suggestions might you have for us to look at going forward?
    The first suggestion is to re-evaluate the CEWS relationship to organizations that do not have income. Again, we're not able to generate any income and offset the reduction of CEWS. For the arts particularly, if CEWS could be maintained at the level it was at this year, that would be one positive step.
    A second one would be to re-examine the Canada Council evaluation of applicants who may not have a track record, in order to be able to open the door for allowing new applicants to programs within Canada Council programs, because at this point that's a roadblock that we can't get past.
    The third option is to look at other programs within Heritage, such as the building communities through arts and heritage festival programming. Once again, there are potential opportunities, but I will say that the length of time that is required to go from the application deadline to the decision has now reached six months and is reaching eight months. Organizations do not have eight months—or even six months—to wait for the adjudication of applications. It would be really helpful if it could be 60 days or a maximum of 90 days from the time of application to the time of decision. Even knowing a negative decision is more helpful than waiting 120 or 180 days for a decision on programs.
    Speed things up, open the doors and maintain CEWS. Those would be three directions we'd suggest, Mr. Shields.


    Thank you. I appreciate that.
    One of the things that has come up is the mental health of people who are involved in the business: the actors, the participants. With those people who are in the performances—the actors, the performers and the musicians—are you seeing any of that challenge?
     Yes. The COVID crisis caused us to cancel in excess of a hundred thousand dollars' worth of guest artist contracts here at Rosebud, and that's just our little theatre company. Now, extrapolate that to all of the professional theatre companies not only in this riding but across the province, across the country, and it's millions of dollars of lost revenue for those artists.
    Certainly, with the colleagues I'm in touch with, the mental health side of this is critically important. I know a lot of people who really are struggling. Of course, don't forget that they are artists, and artists find a way to be creative often in the worst situations. During the Great Depression, it was so often the artists who thrived, not financially, but in terms of finding their voice and making an impact. Certainly, I'm finding that lots of our graduates who are out there working professionally in the industry are finding their way. Again, it's not financially, but they are finding their way to make their impact and still be storytellers.
    Thank you.
    The students you talked about in the school, would you—
    Very quickly please.
    The positivity of your school in the community...
    The positive impact of the Rosebud school of the arts in this community is huge. To have 25 to 30 young people studying arts in this community is the day-to-day lifeblood of this community—
    Okay, Mr. Muir. Sorry about that.
    Madame Bessette, according to the clock, you could be the last person. However, because of the technical difficulties that we have, I'm going to take it upon myself to stretch it a little bit, so here's what I'd like to do.
    Madame Bessette, I'll give you your five minutes. However, after that I'm going to ask Ms. McPherson and Monsieur Champoux if they would like to have quick questions, maybe for clarification. I'm not going to give them a set amount of time. I'm just going to allow them a couple of questions, otherwise we would go too long.
    Could I get the blessing of the committee to do that? I know I'm going beyond the scope here of what I normally do, but I just wanted to get that in, given the technical difficulties that we have.


    Mrs. Bessette, you have the floor for five minutes.
    Thank you very much, Mr. Chair.
    My questions go to Mr. Girouard.
    The AMECQ has been fighting for a long time to protect local advertising. In my region, advertising in our print media is critical for our SMEs and our local merchants.
    Could you tell us a little more about the role of advertising in print media in the context of the local economy in a region and the economic recovery?
    At the beginning of the pandemic, in March or April, all businesses in Quebec shut down. If there had not been advertising from the Government of Quebec, the newspapers would have shut their doors. Buying local and supporting local merchants are very important. At a certain point, we have even seen local merchants advertise on Facebook, which is the equivalent of shooting themselves in the foot, if I may put it that way.
    In a word, community newspapers support local businesses.


    Thank you.
    Our seniors have also been severely affected by this pandemic, especially because of the lockdown measures.
    Can you tell us about the role that community print media play in the daily lives of seniors, and tell us how we can help them get through this crisis?
    As we know, seniors read community newspapers a lot. They are greatly attached to them. As they don't all have Internet access, the community newspaper provides them with local information. The community media talk about the people around them. Often, older people recognize themselves and everyone in the community in the paper.
    Thank you.
    In your opinion, which measures will be necessary in the future to support community print media, especially in the regions?
    Measures by whom?
    I am asking which measures will be necessary in the future to support community print media, especially in the regions?
    We will need a program designed for small newspapers and small communities. Assistance should not be given simply to official language minority newspapers or those in a media desert. The program must be designed for everyone in Quebec, including small municipalities.
    Thank you very much.
    That is all for me.


     Folks, just to end off, I offered Monsieur Champoux and Ms. McPherson a chance to ask another question. I just need a show of your hand if you wish to ask a question.
    I'm fine without asking a question.
    Monsieur Champoux?


    The same goes for me too. I have really enjoyed the discussions we have had.
    Thank you, Mr. Chair.
    Thank you, everyone.


     I apologize again for a few technical difficulties.


    My thanks to Mr. Girouard, from the Association des médias écrits communautaires du Québec.


    Thank you as well to John Hinds from News Media Canada and Paul Muir and Bob Davis from the Rosebud Centre of the Arts.
    This is the conclusion of today's meeting. We will see everyone again on the same subject this coming Monday. Thank you very much.
    We are adjourned.
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