Good afternoon. My name is Peter Kvarnstrom. I live in West Vancouver, B.C. and have since 1965. I am currently the publisher of the North Shore News, the Bowen Island Undercurrent, which is our very smallest newspaper in our group, as well as the Coast Reporter, in Sechelt, British Columbia, where I started that paper in 1997.
I also hold a corporate role with Glacier Media Group as the president of their community media division. Glacier Media Group is a publicly traded Canadian information company headquartered in Vancouver, British Columbia. Glacier's community media division encompasses 55 fully-owned community newspapers and their associated digital and print specialty products. Glacier also has interest in nearly 40 other newspapers where the partner is the operating entity.
Mr. Nantel, you mentioned that we are partners with Duff Jamison's Great West news group.
I have also served as president and chair of the Canadian Community Newspaper Association, as well as chair of the Canadian Newspaper Association representing dailies and community newspapers. I currently chair the management committee of Newspapers Canada, which you heard from earlier in this session.
Today I want to share with you some facts and thoughts about the industry and some challenges that we face. I will also suggest some courses of action that the Government of Canada may consider in ensuring that local journalism continues to serve communities across the country. I will try to avoid repeating some of the same points that were made earlier.
First, I want to ensure we recognize that the challenge of our sector is not an audience engagement issue. According to our most recent research conducted by Totem research earlier this year with 2,400 Canadians represented across our country, balanced for age, sex, language, and conducted in both English and French, 87% of Canadians continue to engage with our journalism and the advertising across our channels. They look at our newspapers, our websites, our tablet apps, and our mobile platforms every week.
While the channels are changing and providing easier and faster access to our content, Canadians continue to rely heavily on our Canadian-created local journalism to keep informed about news, community happenings, births and deaths, civic and regional politics, and much more.
We employ hundreds of journalists across our organization, and thousands across our industry. Our journalists work tirelessly to tell the stories in every community that we serve. Their work helps us ensure that our readers and all Canadians have access to the stories that matter most, the local ones.
The journalism we create is rarely urgent or breaking news. Local journalism is relevant, compelling, and unique. Our journalism speaks directly to our readers about their community and their neighbourhood. It reflects the communities that we serve. We see ourselves, our friends, and our neighbours in our pages. Most importantly, we write and tell the stories that no one else does. Our content is truly unique and is under significant pressure.
In most cases, we are the only source of local news and information in our communities. There are many sources of regional, national, and international news and information, but our industry is the only one to employ journalists in every community we serve, which is more than 1,000 communities across Canada.
In many cases, our work is the only way to hold both private and public institutions to account. We believe that local journalism and the work we do is vital to ensuring a thriving democracy and a civil society. We truly help to improve the quality of life in every community we serve.
Community newspapers are under tremendous pressure. Our business model is under significant challenge, based on advertising revenues declining. The relentless loss of single-digit revenue percentages every year forces publishers to reduce their cost base continuously. We do our best to avoid reducing our reporting staff, but no department is spared as we try to adjust our cost base to our revenue realities. We simply can't afford to operate the way that we did in the past.
Local, regional, and national advertisers simply have too many advertising choices in front of them. They still buy advertising from us, just less. They are trying to remain competitive in an increasingly digital age when they themselves face huge online mega retailers. We know whom we are referring to.
What can government do to ensure the survival of local journalism and the publishers that employ them? First, we are not looking for a bailout, but government support as we transition from an industrial business to a knowledge-based one.
Federal government advertising has declined by 96% in newspapers over the past decade. Provincial government advertising has followed suit. Local governments, much as Mr. Jamison said before me, continue to rely on community newspapers because they work. They connect their constituents like nothing else. MPs individually spend their advertising dollars with their community newspapers because they know they are read thoroughly, and they engage their constituents. The federal government has an opportunity to truly communicate with Canadians in every corner of our country by using our community papers and their websites, yet they choose to spend our tax dollars with U.S.-based behemoths like Google and Facebook.
We ask the government to help us review our advertising model, recognizing that paid advertising pays for the journalism and its distribution. Instead, we are watching that advertising flow south of the border to those same corporations mentioned earlier that do not pay significant taxes in Canada, do not employ significant numbers of taxpaying Canadians, and rely on content that they are taking directly from Canadian creators. They have found a way to monetize our content to an incredible level.
Fair dealing within our Copyright Act is a significant detriment to journalism in Canada. Our creators and publishers pay to create content that many news aggregators, including the CBC, republish, copy, broadcast, and sell advertising without compensating the creator or the copyright holder. This must be addressed.
We would suggest a number of taxation strategies—and again, I'm no taxation expert, and we don't have any—that could make a significant difference to the community newspaper publishers. First, consider making all subscription and newsstand sales of newspapers a tax deductible expense for every Canadian, encouraging them in a very small way to subscribe or buy their community newspaper. Second, revise the tax laws that allow advertising that is being bought from foreign owned and operated media companies. Are they to be allowed as a tax deductible expense? They are today: not in print, but in Google; it seems it's okay. Why should money spent with Google be tax deductible for businesses?
Finally, consider revamping the Department of Canadian Heritage's aid to publishers program. Currently only very small paid subscription newspapers qualify for that aid and we do appreciate it and it does keep those papers going. Our company publishes some very small papers that would not be around without that program.
In today's publishing reality, many community newspapers have had to give up on paid subscriptions to compete with free media available on the Internet. Those papers serve their community exactly the same way as the paid subscription papers. Provide an expanded program for improved funding to include all community newspapers.
As publishers of many small-town community newspapers, we feel the obligation to serve. In many cases, it is no longer about the money we once earned, but rather the obligation to serve the communities where we live. We do not want to abandon small towns or any communities; however, we need government to accept some of the responsibility and obligation to ensure that we can continue to serve Canadians for many years in every corner of our great country. Simply put, the work we do matters to all Canadians in every community in Canada.
Thank you for your time and caring.