Evidence of meeting #13 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was magazine.
A recording is available from Parliament.
8:55 a.m.
Board Chair, Magazines Canada
I'd like to say that the two things that haven't changed—in the 60 seconds I have left—is that there is still a huge appetite among Canadians for Canadian content and there is still a huge pool of Canadian writers and artists eager to create Canadian content. What has changed is the business model, our way of paying for it and delivering Canadian content. We're not losing readers, we're losing advertisers.
I'll stop there, Madam Chair, so that the questions can take over.
8:55 a.m.
Liberal
The Chair Liberal Hedy Fry
Thank you very much.
May I ask witnesses to speak slower? The interpreters have a hard time following you.
I know, Mr. Knight, you were just trying to get through your presentation in the right time, but perhaps I could ask you to think about that a little bit. Thank you very much.
Now we will go to Mr. Smith, the membership coordinator of National Campus and Community Radio Association.
8:55 a.m.
Luke Smith Membership Coordinator, National Campus and Community Radio Association
Thank you, Madam Chair and members of Parliament.
My name is Luke Smith. I am the membership coordinator for the National Campus and Community Radio Association.
The NCRA is an association of mostly English-language not-for-profit radio stations committed to volunteer-driven, community-oriented radio across Canada. Our goals are to ensure stability and support for stations and promote long-term growth and effectiveness in the sector. We have 95 members, including 60 community stations and 31 campus-based stations.
Radio is important to Canadians. According to the CRTC, Canadians listen to about 17 hours of radio per week, and it's still one of the largest platforms that people use to consume media. We have more than 175 stations across the country, which represent about 16% of licensed radio stations. That percentage is growing. In 2014, 30 new community station licences were granted by the CRTC. We expect this growth to continue, since some areas of the country remain unserved and underserved by community radio.
Making radio is expensive. We believe there should be more government financial support for community radio stations, especially those in rural areas. For example, I spoke recently with the “voice of Aurora”, CHRA-FM in Aurora, Ontario, a new station being led by a very devoted group of volunteers. They've obtained support from the town council and every local business organization they can find, and yet they're still struggling with the costs of setting up the station, likely to be $35,000 to $50,000 to set up, not including maintenance and operating costs.
Most community radio stations depend on local fundraising, which is insufficient, particularly in small communities. There are few operating grants available. They can't obtain charitable status, so they cannot get private charitable donations or grants from most foundations. To our knowledge, although Canadian Heritage has funded other kinds of community media, it has never funded community radio. We encourage you to consider changing that.
Local news and public affairs programming is essential to our democratic process, helping keep citizens informed and engaged. Our sector is unique in providing a forum for citizens to participate in the broadcasting process and speak to each other about important local issues. Our members broadcast local information and analysis that is not heard on other stations.
With respect to local news, we define local programming based on current or target AM or FM signal range. Our members apply this definition even when they can reach a larger audience, such as through the Internet. This is because focusing on the area around their physical station is an effective means of bringing people together and encouraging dialogue and community building.
It also helps them determine which news and information is most relevant, and community members living within a station's signal range play a crucial role in choosing and creating relevant programming. It's this feature that maintains strong community support for community radio stations, despite the preponderance of new media options.
We're discussing the erosion of local news reporting at this hearing, but we believe our sector's capacity has actually increased rather than eroded. This is due to funding from the Community Radio Fund of Canada, which distributes Canadian content development funds collected by the CRTC from commercial broadcasters to community radio stations. This new funding now represents around 11% of our sector's revenue. It has enabled many stations to provide local news coverage for the first time ever, despite how labour-intensive this work can be.
However, this funding is project-based and non-renewable, and there isn't enough to go around. For example, CICK, a tiny station in Smithers, B.C., received a CRFC Youth on Air grant in the past to hire youth reporters to cover local news and events. Without renewable funding, the station has lost an important source of programming. The CRFC funding is a huge improvement for our sector, but it's not enough to ensure that all stations can provide ongoing, high-quality news coverage.
Our members are engaged with local news in unique ways. For example, when there was a flood in nearby Minden, Ontario, that was not covered by any other station, CKHA-FM in Haliburton, or Canoe FM, broadcast live on location and overnight to give residents information about where to get help. Most commercial stations do not provide this level of local programming.
Many of the stations provide similarly unique local services. For example, CJRU in Toronto, Ontario, has programming aimed specifically at new Canadians. CHMR-FM in St. John's, Newfoundland, has a program produced by a local refugee and immigrant advisory council and broadcasts live coverage of student elections at Memorial University hosted by students. CFTA-FM in Amherst, Nova Scotia, provided the only live electoral coverage in town, including reports from the successful candidate's headquarters. CJNU-FM in Winnipeg, Manitoba, broadcasts live from locations around the city, such as hospitals and charities, thereby better connecting them to the community.
The MLA serving the CJMP-FM area in Powell River, B.C., phoned them to ask to appear on their radio show, because it was one of the only ways he could communicate with his constituents. CKUW-FM in Winnipeg, Manitoba, provided provincial election coverage, focusing on issues that other media didn't cover, such as child welfare, disability issues, poverty, indigenous rights, and climate change. CFUZ in Penticton, B.C., and CFAD-FM in Salmo, B.C., provide live coverage of council meetings. CJSW-FM in Calgary, Alberta, hired summer students to create news programming featuring small sub-communities in Calgary, including LGBT groups, artist communities, and more.
Our members also serve local ethnic and third-language communities by providing training and opportunities for community members to produce their own news and public affairs programming. Across the country, our members serve more than 60 linguistic and cultural communities. For example, CHHA in Toronto is the only Spanish radio station in Canada. It also has programming in Italian, Portuguese, and Tagalog.
Each community station approaches local news differently, but most involve teams of volunteers. Few grants are available for long-term operational staff, so news-related jobs in our sector are usually low-paying, temporary, and project-based. This makes it difficult for stations to provide consistent support to volunteers to ensure high-quality programming.
For example, CKUW-FM's news programming focuses on voices not heard in other media and in-depth discussions of local issues. They recently won the community radio award for programming that featured local perspectives on the Museum of Human Rights, but the part-time news director works twice as many hours as the station can afford to pay him.
As well, CJMP in Powell River, B.C., is the only local news source but could not fulfill this role without the CRFC grant. CHXL-FM in the Okanese reserve in Saskatchewan wants to develop programming in the local indigenous language, which was nearly wiped out by residential schools, but they don't have enough staff or resources to do so.
Media concentration creates challenges and opportunities for community stations. For example, it is hard for community stations to compete with more powerful commercial broadcasters for advertising dollars. On the other hand, community stations offer a wider diversity of voices and perspectives on local issues, deeper local insight, more unique local content, and a hyper-local perspective that consolidated commercial stations cannot provide.
To turn to the issue of new media, we see it as a way for our members to extend their broadcasting reach to more members, including millennials, but it's not a replacement for AM or FM. Most of our members have websites that simulcast their signals. Many provide streamed or downloadable archived programming. Some provide video streams, audio web streams, and blogs. Most use social media.
The NCRA's radio exchange, which is a website for stations and producers to share programming, allows stations to obtain and broadcast each other's niche programming.
9:05 a.m.
Membership Coordinator, National Campus and Community Radio Association
Okay.
For example, I produce a show for gender and sexual minorities, which is available on the exchange and has a strong online following.
The NCRA has also launched a national campaign with partners to pressure the manufacturers and network providers to ensure that FM chips are embedded in cellphones. According to the CRTC, 22% of Canadians stream radio online, and FM chips are more energy-efficient and cost-effective than mobile radio options requiring data service. We're hoping to replicate the success of a U.S. campaign in Canada.
I think that's probably about time.
9:05 a.m.
Liberal
The Chair Liberal Hedy Fry
Thank you very much.
I'm sorry, I have to ask: did I detect Irish in that “h” pronunciation?
9:05 a.m.
Membership Coordinator, National Campus and Community Radio Association
I'm from southwest Wales originally.
9:05 a.m.
Liberal
The Chair Liberal Hedy Fry
Ah, okay. Thank you very much for your presentation.
I think both of you offered some insights into exactly what we're looking at under our themes and services. That's good.
I will begin now with the questions. There's a seven-minute segment for each questioner, but that includes the answers. I'm asking you to be very succinct in both your questions and your answers so that we can get through as many questions as possible.
We will begin with Ms. Dabrusin for the Liberals.
9:05 a.m.
Liberal
Julie Dabrusin Liberal Toronto—Danforth, ON
Thank you.
I will start with Magazines Canada. It seemed to me that you had a little more to say about how people pay for and how you continue to monetize magazines. Would you like to go on a bit more?
9:05 a.m.
Board Chair, Magazines Canada
That's terrific. Thank you.
The point I wanted to make is in terms of the difference of the business model. There is a narrative that suggests we're going from print to digital, and that if we could simply replace our print audience with our digital audience, the advertisers would follow and all would be well. This is not true.
For a number of reasons, it just isn't true. We can have much bigger digital audiences than print audiences. That's no problem; we've already done that. The advertisers don't follow. Advertisers have migrated from content producers to distributors, so Facebook and Google now have the vast majority of the digital revenue, and that's growing. Facebook will take 43% of all global growth in digital revenue in this year. That's just true.
There's something else that's happening, and that is, believe it or not, that desktop and laptop use has flattened and in fact is beginning to decline as mobile is taking over. Mobile is the seventh mass media. Mobile is a different media. All digital is not alike.
Eighty-three per cent of Facebook's revenue this year will come from mobile, and here's the dirty little secret: advertising doesn't work in mobile. It's just less effective as a medium, so advertisers, who have been disrupted just as much as the media has been disrupted—and you have to broaden your view and not just look at media—are now pursuing content strategies, where they can actually go around media and go onto Facebook, Google, and other platforms and create their own stuff. As for the idea that the simple answer is “let's just help people get better at digital”, that's not the answer.
Is that helpful?
9:10 a.m.
Liberal
Julie Dabrusin Liberal Toronto—Danforth, ON
Sure. Our task, then, is to find some answers.
I have two parts. One question is what I asked someone last week about the tax being the way it is. The CRA provides tax deductions for advertising in print and in broadcasting. That favours Canadian media. There doesn't seem to be anything in line 8521 about digital. I was wondering if you any thoughts about that.
9:10 a.m.
Board Chair, Magazines Canada
Well, (a), it's true, and (b), anything that would nudge people towards supporting Canadian content producers is a welcome thing, for sure, but for the reasons I have just outlined, that will not be a magic bullet. It will be a helpful moment, but it won't be transformative, if that's fair to say.
9:10 a.m.
Liberal
Julie Dabrusin Liberal Toronto—Danforth, ON
All right. No, that's entirely fair.
Because we have to think ahead and, as you said, we have to think about how to deal with the fact that we're moving towards mobile and it's not just a digital issue, do you have any thoughts about how we support Canadian voices and local voices when people are moving towards a mobile environment?
9:10 a.m.
Board Chair, Magazines Canada
For the Canadian companies that are involved in this, it's up to the companies to take the risks and to experiment with the changes and so on. I don't think it's really the role of government to try to be a venture capitalist in that sense. The important core to this, though, for Canadian voices and Canadian choices, are those professional editors and writers who, during the transition, actually are in danger of getting wiped out.
I really point to Canadian editors. It's easy to look at the guys with bylines or the famous faces in broadcast, but it's really the editors, that core group of professionals, who take years and years of experience to become the story crafters. Those are the ones who identify and nurture the writers. Those are the ones who actually create the storytelling strategies. That group of people is absolutely essential. That's a core critical mass capability, and I think it's important that we focus on making sure we don't lose that capability, whether that's interns coming in at the beginning or whether that's making sure those people are employed. Those are highly skilled and high-value jobs, and it's really, really important.
We're seeing newspapers laying off people like crazy, and magazines are laying off people like crazy. We're trying not to do that, but I will tell you this: that's the core group of people. From a storytelling capability point of view, that's the group of people I would be focusing on.
9:10 a.m.
Liberal
Julie Dabrusin Liberal Toronto—Danforth, ON
All right.
My friend Monsieur Breton had asked to share some time, so I'm going to share my time now.
9:10 a.m.
Liberal
Pierre Breton Liberal Shefford, QC
Thank you, Ms. Dabrusin.
Welcome, everyone. Thank you for being here today.
My question is for you, Mr. Smith.
There is a fund called the Community Radio Fund of Canada. Could you give us more information about that? First, where does the funding come from? Second, what is the money for?
9:10 a.m.
Membership Coordinator, National Campus and Community Radio Association
Certainly. The radio fund is funded by the Canadian content development requirements for all commercial broadcasters. As a condition of licence, commercial broadcasters are required to give I think around 5% of their revenue to develop Canadian content. This money goes into FACTOR and it goes into the radio fund. Broadcasters also have discretionary spending for their own projects. Last year, I think the radio fund handed out around $3 million to radio stations. These are usually grants to develop programming and new initiatives. The local radio station CKCU-FM developed a grant to hire somebody to engage with local festivals, produce programming, and better connect them to local communities.
It's used more for project-based programming. There really isn't any funding available for structural costs, which is what a lot of our stations are struggling with.
9:15 a.m.
Liberal
Pierre Breton Liberal Shefford, QC
Thank you, Madam Chair.
My next question is for Mr. Knight or Mr. Holmes.
Canadian Heritage gives $75 million in grants. However, I am not sure whether any money goes directly to Magazines Canada.
Does that fund still meet the needs of the industry? If not, what do you suggest?
9:15 a.m.
Board Chair, Magazines Canada
Thank you. That's a very good question.
The CPF, the Canadian periodical fund, is a successor to the Canadian postal subsidy that happened before Confederation. The idea with the postal subsidy was that every Canadian would be treated equally. It didn't matter where you lived in the country, it would cost you the same to get your weekly newspaper, your magazine, and your mail.
Over the years, that transferred from Canada Post to the Department of Canadian Heritage and became what we have now, CPF, which is based on providing a very important subsidy to Canadian magazine publishers and weekly newspaper publishers to do exactly what I was talking about, which is to make sure we're providing content.
That $75 million is what Matt was talking about in terms of that program. It's a very important program. I think it's important that it be maintained. Going forward, we're not asking you to double it or anything. It's a very core part of what we do.
Insofar as changes are contemplated, whether by this group or by the department, I made the point about making sure we're supporting the professional cadre of editors, because I think we're going to get the most leverage from that support.
The danger is that we start to say anybody who puts their hand up to say they're starting a digital project should also be part of the pool, because the pool is fixed.
9:15 a.m.
Liberal
May 5th, 2016 / 9:15 a.m.
Conservative
Kevin Waugh Conservative Saskatoon—Grasswood, SK
Good morning.
Thank you to both organizations for coming in this morning. I used to deliver the Star Weekly when I was a kid. Then they put it in newspapers, and I didn't get a chance to. Then it died.
You know what? Magazines come and go. Let's talk about that. The shelf life is such that if you get a magazine that runs for a year, you seem to be good. I've invested in some in Saskatchewan. They look great; the model looks super; and then all of a sudden, they die.
Can you talk about that? I just looked at your website here. You have the state of the magazines. You do see them, and people do read them. The quality is very good.
I totally agree with you on the editor aspect of it, because the editors are what makes a magazine. Unfortunately, what we're seeing now, I think, is that when newspapers lay someone off, they get an editor from a newspaper angle.