Thank you, Mr. Chairman.
I'd like to begin by thanking the committee for having Magazines Canada here today.
My name is Jim Everson. I'm the executive director of public affairs for the association.
Magazines Canada is a national trade association representing leading Canadian-owned, Canadian content, consumer, cultural, specialty, professional, and business magazines in the country.
Canada's magazine policy and programs are currently the subject of a substantial review led by the Department of Canadian Heritage. This review has coincided with the strategic review of arts and culture program expenditures that the committee is looking at today. We'd like to take this opportunity to discuss some of the challenges ahead and highlight the importance of continued investment in the Canadian magazine sector.
Canada's magazines are challenged currently by a very serious economic downturn, the one that we're all experiencing. Advertising revenues make up, on average, 60% to 65% of magazine revenues. As companies deal with today's economic turmoil, they have pulled back on advertising expenses, which has had an impact on all media, including magazines. There have been layoffs, reductions in freelance commitments, and work-sharing in some of our work environments.
In this environment, the uncertainty around our national policy framework and investment in key programs is an added challenge. There has been considerable uncertainty as a result of a decision by Canada Post to eliminate its $15 million annual contribution to the publications assistance program, which is used to help distribute Canadian magazines across the country. This would have reduced the value of the program by 25%. So our sector very much welcomed the January 27 federal budget announcement of $30 million over two years, which replaces that Canada Post contribution that was eliminated. We further welcomed the announcement by Minister Moore just last month, on February 17, of the creation of the new Canada periodical fund, which will replace both the Canada magazine fund and the publications assistance program. The financial investment provides much-needed stability for the sector in this time, and the new program, we expect, will update the existing framework and provide greater flexibility and targeting of support.
While not all the details of the new program have been finalized, there are areas we feel require more work to ensure that the program meets the diverse needs of the sector. For example, under the existing program structure, Canada's arts and literary magazines benefited from a specific and targeted program as part of the Canada magazine fund. This program will not continue under the new framework; however, the design of the new program allows for special eligibility guidelines for some classes of magazines and a flexible formula of support. So we'll be urging the minister to take steps to ensure that these magazines' special needs are addressed through the instruments that are already built into the design of the program, to ensure that those magazines' needs are addressed.
With respect to the investment in collective industry initiatives, the part of the current programming that was reduced through the expenditure review process, the new program will maintain a component for this purpose. These collective projects are valuable to the sector, and we support maintaining them. They've been used for promotion initiatives on behalf of all Canadian magazines and research into industry issues, types of things that the whole industry can benefit from.
In conclusion, we want to highlight how effective and valuable the federal support is. Successive governments have supported and continue to refine and improve our national magazine policy. It includes the Foreign Publishers Advertising Services Act, Canadian ownership regulations, the publications assistance program, and the Canada magazine fund. Together they've proven to be very successful. We have one of the most open and competitive magazine sectors in the world, with a very high ratio of magazine titles, both domestic and foreign, per consumer. At the same time, we've been able to steadily improve access to Canadian magazine content relative to foreign magazines. Canadian titles make up about 40% of magazine purchases in Canada, which is better than the Canadian share of most other cultural media, and it's largely as a result of a consistent application of federal magazine policy.
We are looking forward to continued support from the Government of Canada to build on this success.
Thank you.