Evidence of meeting #25 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 advertising.
A recording is available from Parliament.
Conservative
Peter Van Loan Conservative York—Simcoe, ON
You also spoke about tax. That's an easy thing to cover in 30 seconds.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
I threw a few ideas down here, and Dennis did as well. He may want to speak to this.
I even thought, could we make it attractive for newspaper owners to turn their businesses into foundations or trusts that would allow the community to own a newspaper if it came to that? They do exist. The Guardian in the U.K. is a trust. The Tampa Tribune is part of the Knight Ridder trust. There are models out there. That is just one idea.
Minister Sheila Copps, I think, back in the mid-1990s, brought in the Foreign Publishers Advertising Services Act, and that pretty much ended the ability of Canadian advertisers to advertise in American publications. We remember it was Time, Sports Illustrated. The content was already done and they were just flipping out ads from the American version to the Canadian. That particular law ended that. There may be some other ways to do that.
When it comes to the tax system, I'm curious about how much tax the Canadian government collects from Google and Facebook.
We watched what went on with Apple just recently, headquartered in Ireland. They're paying 0.005% tax. I watched a parliamentary committee in the U.K. the other day. They were interviewing a Google executive, who was making the argument that all the transactions actually happen in Ireland. The committee was saying the business is being done in Britain. There has to be things that we can do with our tax system to have a fair distribution of digital Internet revenue.
Liberal
The Chair Liberal Hedy Fry
We've now gone over the seven minutes, but because you were so generous to allow us to cut into the question period, I will allow you to finish your thoughts, sir.
Executive Director, Alberta Weekly Newspapers Association
Further to what Duff said, there are certainly small community newspapers across the country that have closed recently. Rainy River Record in Ontario is the most recent example of that. It does strike us that when it comes down to small communities losing their newspapers, perhaps there is a way to form some kind of community foundation to operate the newspaper, to keep that newspaper going so that it can bring local news to that community. I don't know if there is a way of looking at that. It's just a shame to see a newspaper like the Rainy River Record, which has been publishing for 98 years, close its doors just because they can't make it any longer.
I think something has to be examined there. Turning the paper over to a not-for-profit to run it makes more sense to me than having a newspaper close its doors. I think that's certainly food for thought as well for the community.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
Thank you Madam Chair.
Thank you, Mr. Merrell, for giving us more information on the subject.
I found it touching to hear you say that although you aren't normally in favour of government intervention, there is currently a problem. The writing's on the wall. Your media sector is in danger.
I believe the Glacier Media Group, whose representative will speak to us later, is part of the entity that owns the St. Albert Gazette. A consolidation occurred, and that's very good. It's important to band together to remain strong and stay in position. However, currently the giant is larger and comes from the Internet.
I think you want to say that we have, in a way, two choices. We can either support at a loss—at the government taxation level—a system because we believe it's valuable to our communities, to local merchants, to the life of smaller communities, and so on, or we can embrace change. Embracing change means we consider the Internet the new workplace, the new battlefield. Investments therefore need to be made in that area.
I still remember GoGaspe.com, a group of local media, community radio and television stations, small privately-owned television stations, and newspapers.
Do you think a government incentive to create a hub that groups together the media in smaller communities would be a good idea? Can it be done?
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
You know, I haven't given that type of structure any real thought. Revenue will be the big issue. It will need to underpin the reporting activities. I can tell you that in most small communities where we have newspapers, we are the only other person in council chambers or at the school board meetings. Many of these meetings attract only the reporter from the local newspaper. The rest of the community relies on that reporter to tell them what's going on, what's important, and those sorts of things.
To try to put the radio stations and the TV guys and the newspaper guys together into one entity would be quite challenging, I think. The ownership is all quite different. The radio stations across Canada are in large chains these days, as are of course the TV networks. The newspapers are having some of the same things as the drugstores and the hardware stores and everyone else in terms of central administration. In our case where we have 18 papers, we have one central facility to print for everyone, to look after all of the inserting and mail labels. All that kind of stuff is done in one central facility on machines, a lot of it automated. It's the only way. Our game now is cost-cutting as our revenues decline.
I'm always willing to look at anything. I'm one of those guys, if there are some ideas out there, who says let's talk about it. If there's a way to put together a consortium of different media to do that, I'd certainly be happy to look at it.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
Of course the ownership, the copyright, remains a big issue when you don't want to give away your content, but especially with a consortium, you may want to try to funnel it down to one place where people can go and see their local news, the local action, the events and stuff, le babillard, we'd say in French.
That brings up another question. Are we talking about rural areas where there's not enough broadband service to cover this? If that's the case, if the broadband supplier is there, couldn't he help out? Couldn't these broadband suppliers, Internet suppliers, help out? They come in with all this foreign stuff, foreign interests. Can they support the idea of a community-based resource? Do you think it's a possibility that we could ask that of the big suppliers?
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
I think so. There is some work being done. We are seeing here in Alberta, Telus particularly is busy getting high-speed fibre to the door. That last mile used to be copper. That is all happening.
There are some downsides to that whole thing, though. It makes online shopping a lot easier. You see Canada Post promoting its parcel delivery service, encouraging Canadians to go online, shop at Amazon, and bring in their products from the U.S., rather than go down to Mr. and Mrs. Smith's hardware store to pick it up. We have to be careful what we wish for.
September 22nd, 2016 / 11:55 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
You are correct. In the rural areas, the speed of the Internet is quite slow.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
It is a problem for families, for entrepreneurs, and for anybody who relies on the Internet. We were talking about land lines. We could also talk about Wi-Fi or cellular Internet.
You are so right to say that. We were talking about taxes, the famous phenomenon of Apple paying so little income tax on its revenues in Ireland. Many of these services don't charge sales tax on their services here. The example of Netflix is very well known. We have heard many telecom suppliers and their OTT services complain about this.
We also saw recently that these providers just pull out the cash and don't bring anything back, besides their service. One may wonder if the taxes that are not paid remain some sort of absent corporate citizenship in the communities where they actually do business, completely opposed to that mom-and-pop hardware store downtown.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
I think you are exactly right.
In our business, we attend a lot of community events, and I don't think I have seen a single community event sponsored by Google, Facebook, Apple, or any of those. It is always sponsored by the local media and the local business community.
Liberal
The Chair Liberal Hedy Fry
Thank you very much.
We now go to the final round. Mr. Samson and Mr. O'Regan are going to split their time for the Liberals.
Mr. O'Regan, go ahead.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
Gentlemen, thank you very much for joining us.
Once again, I would like the record to show how important it is that we speak to people right across the country for their points of view. I think you offer a very particular one in that you are on the ground and experience every day the issues that we talk about periodically. You also have a very clear sense, it seems to me, of the larger world at play here that still affects people like you and us when we deliberate about these things.
There are two particular things, and the reason I am repeating them is partially that I want to make sure they are on the record. One, of course, is your issues with Canada Post, which I think are very interesting. If they are an impediment to local news in any way, that is something I think this committee should draw more attention to, because we are fixated on local news. That is what our constituents are telling us is a concern to them, and whatever we can do within our power to make sure people have access to more local news is vitally important.
The other thing that struck me.... I feel guilty that it didn't come to me before, because I did sit on the board of The Walrus magazine for a number of years and, of course, that is a magazine run out of a foundation in much the same model you described. Perhaps that is something this committee should take a look at, too, in its deliberations about whether there is an avenue for local news and local newspapers through foundations. Maybe that is something we can explore with the CRA, because it certainly works for The Walrus, and it works well.
You were very kind to us in allowing us to step out to meet the Paralympians, and I appreciate that. Let me write you a bit of a blank cheque here. I think you had about four issues you wanted to talk about, and we have covered a number of them: the tax system for the most part, copyright law, and Canada Post. Was there a fourth one that maybe I missed which you would like to have a little more time to spend on?
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
As I look at the various things we have put in our submission, I think that some way of sharing the digital revenue with the really big players like Google and Facebook.... There is just something not quite right about the way that works. It just seems that all the money is going in that direction, and they are making money off the backs of the actual content creators. It is not right.
I know they are very active lobbyists. I don't know what they are doing in Ottawa, but I know that in Washington those companies are in and out of Congress and the White House on a weekly basis making sure that nobody is going to step on their toes in any way. They have a pretty good thing going, but they are making their money off the backs of the people who are creating the content that is on their platform.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
Yes. It's interesting when you talk about lobbying. I've met with people from Facebook and Google, and they do make their presence felt, but you don't really get beyond the niceties, to be honest with you, because there's nothing really invested that they have with the government per se. People kind of go about and do their thing. People enjoy Google and they enjoy Facebook because we have stepped back and allowed people to enjoy it. It's very popular with our constituents. But, as you said, because they're taking that revenue, it doesn't help our local news providers.
When you speak to other newspaper publishers and editors across the country, are they confronted with the same challenges?
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
Yes, it's coast to coast, and I speak to publishers across the country. I've been through the chairs in Alberta. I was the president here 20 years ago now, maybe 30, and the national president in the mid-1990s, so I know lots of publishers across the country. Every one is dealing with the same issue. Everyone is concerned about this one issue that we talked about early on, and that is the actual government advertising itself. That has dried up, as I said earlier.
I don't really understand it. Dennis and I appeared in Regina at the Public Policy Forum round table chaired by Edward Greenspan. I suggested to them at that time that if anybody in Ottawa was to simply phone a CAO from any one of our communities and ask them how they communicated with their residents, I'm certain they would all say, “We use the local newspaper”. Yet Ottawa, or in our case, Edmonton, has shifted their money to what they would view as a more efficient form of advertising. I did ask Edward Greenspan, “By efficient, is that cheaper? Is that what you mean? They can say they've advertised?” Anyway, that's one area that I think the federal government could help with: just start to use our newspapers to advertise your programs.
Executive Director, Alberta Weekly Newspapers Association
If I could give you another real life example, our association includes newspapers from the Northwest Territories, and we have—or I should say had—one member in Fort Smith. The publisher there—his name is Don Jaque—closed his print edition down last March. He's struggling to really bring the news to the community online and unfortunately not succeeding. He, of course, challenges our association and looks to us for answers and solutions. How can he still run a viable community newspaper and do it online? Right now I'm afraid to say, the emperor has no clothes. We just don't really have a solution for this fellow, so it is tough.
There are some real people out there who are, unfortunately, closing their newspapers down. We really need to come up with something that will keep that service going in communities. I think Fort Smith is a good example of where probably a lot of folks buy stuff on Amazon and it's delivered practically for free. He has really no business community to rely on anymore. Then to top it all off, the federal government used to buy advertising heavily in the Fort Smith and Slave River journals and they don't anymore, so it's really, really tough for folks like him.
To go back to the previous speaker and the idea of maybe a community hub, a digital hub, and how could we make that work, I think we do need to look at those kinds of solutions for that kind of newspaper that just really doesn't have a business model any longer to make it work.
Liberal
Liberal
The Chair Liberal Hedy Fry
Thank you.
We were sharing the time, and we've finished the seven minutes, but I will allow Mr. Samson—
Liberal
The Chair Liberal Hedy Fry
Mr. Samson, you're okay? Would you like an extra two minutes because of all the disruption we had?
