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.
11:35 a.m.
Liberal
The Chair Liberal Hedy Fry
Excuse me, were you able to understand that?
Do you have translation where you are?
11:35 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
We do not.
11:35 a.m.
Liberal
The Chair Liberal Hedy Fry
You do not.
Mr. Breton, can you do a quick summary in English for the witnesses?
11:35 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
Excuse me, we did hear a translation.
11:35 a.m.
Dennis Merrell Executive Director, Alberta Weekly Newspapers Association
We got the translation.
11:35 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
It's coming from the House of Commons though, not from here.
11:35 a.m.
Executive Director, Alberta Weekly Newspapers Association
I'll respond to that.
I think tax credits are something that we did put in our presentation. It does make sense to us that perhaps the government could look at issuing advertising tax credits to companies that invest in Canadian media versus when you buy digital media and the major companies are in the U.S. That might tend to encourage companies to purchase locally or purchase Canadian media.
I hadn't really thought about the payroll tax credit, but that's an interesting one as well. I think we'd need to study that one further to respond to that.
Would you like to take that on, Duff?
11:35 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
I don't want to seem flippant, but you're talking to a couple of guys from Alberta. We're not usually into too much of that sort of thing.
I haven't given it any thought. I don't know how it works. I think there are probably better mechanisms.
11:35 a.m.
Liberal
The Chair Liberal Hedy Fry
Thank you.
We have another two and a half minutes to go, if Mr. Vandal or Mr. Breton want.
Yes, Mr. Vandal.
11:35 a.m.
Liberal
Dan Vandal Liberal Saint Boniface—Saint Vital, MB
We've heard from a lot of delegations. Some of them have brought up the quality of information on social media sites and social media web pages.
Do you have any comments about the quality of journalism online via online news sites and social media as compared to traditional print media?
11:35 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
I could make a few brief comments.
I think that most communities have, perhaps, a community Facebook page, for example. They're not vetted by an editor. It's just a place where people can post their thoughts about whatever subject. It's not always accurate. I know that in some of our newspaper markets we've had to correct those things for the public because a rumour can get started quite easily that way. There's no doubt it's a valid form of communication for many members of our community. Whether it's always accurate is another question.
11:40 a.m.
Liberal
The Chair Liberal Hedy Fry
Thank you very much.
We have one minute, but if Mr. Breton and Mr. Vandal don't want to use it, I will move on.
Do you wish to use it, Mr. Vandal?
11:40 a.m.
Liberal
The Chair Liberal Hedy Fry
Okay, thank you.
Our next question comes from the Conservatives, Mr. Waugh.
11:40 a.m.
Conservative
Kevin Waugh Conservative Saskatoon—Grasswood, SK
I'm going to deal with the Canada Post situation. It's timely.
We've had a situation in the city of Saskatoon where we weren't sure about the Canada Post disruption or not, so a free newspaper had to reach out to the community for volunteers just to deliver their product. It was funny, because Transcontinental was at a meeting a couple of months ago—maybe four or five now—and we talked about flyers, inserts. In a lot of newspapers, as you know, without the inserts, you're dead. That's where a lot of the money is coming from in your industry.
Canada Post, I understand, has made it very difficult for these inserts in your newspapers. I want you to talk about that. As I said, having inserts or flyers is where the money is being made. I should also say Transcontinental really didn't address that situation, because a week later they sold all their Saskatchewan holdings to a company in Alberta. Anyway, you may be aware of that.
11:40 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
We're aware of that, and we know the owner well.
Inserts are, in fact, a very important part of our business. It becomes a problem in terms of our Canada Post distribution because Canada Post views inserts as a pretty important part of their business. In fact, it's one of the few areas of Canada Post business that is actually growing. There are some old rules still sitting out there from the days of Canadian Heritage's Canada Post publications assistance program, in terms of 70% advertising content, 30% news content, and certain tests about how the flyers have to be folded and inserted in the newspapers. Then they also have a program called consumer's choice, which allows consumers to refuse advertising inserts, but they're not allowed to refuse newspapers. That was always a bit of a leg-up for newspapers. They could do that.
In some markets now, Canada Post has enforced those sorts of rules. You'll see, from our comments and our submission here, that we do think Canada Post remains a very critical delivery system for us in rural areas. They're really the only guys who are delivering to farms, acreages, and those sorts of places. We need to revisit that relationship and find a way to redo the rules so that we can work together rather than fight against each other as competitors.
11:40 a.m.
Conservative
Kevin Waugh Conservative Saskatoon—Grasswood, SK
Those are important comments. This committee is studying how rural areas sometimes don't get what urban areas get for their information and news because of broadband or whatever. You provide a service for rural Canada that others cannot. You're a valuable service. If we're having issues with Canada Post, it's because I'm sure your cost is 50% producing the newspaper and getting it to homes and acreages. There is the other issue: they're changing their fees—I'm not going to say every month—regularly to you newspaper owners in rural Canada.
11:40 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
They are, and there's another way that they increase prices: by changing rules.
I remember a couple of years ago the post office representatives came to my office to tell me about this great new rule. When I looked at it, they had changed the sizes we were allowed to mail to be slightly smaller than a newspaper. If you were slightly bigger than that new size, you had to pay more. Our increase that year was 9.8%.
We get at least a 5% increase every January from the post office.
11:40 a.m.
Conservative
11:40 a.m.
Conservative
Peter Van Loan Conservative York—Simcoe, ON
One of the issues you raised was copyright. I'm wondering if you could speak about that.
Are you suggesting, as I suspect, that you want those who recirculate your articles, whether it be through Google or Facebook or so on, to pay a copyright fee? If that's your answer, is that practical, and will it not result in people locking you out completely and your content disappearing from the web?
11:45 a.m.
Chair, Government Relations Committee, Former President, Alberta Weekly Newspapers Association
I would imagine that's entirely possible, and we've seen some evidence of that. When Spain tried to enforce that type of rule with the Internet giant, Google just cut them off and said, “Well, okay, Spain, you don't get our service anymore.”
The Europeans have been quite active on this front with copyright. It's another one of those obvious things to us, that the content creators, the journalists who write those stories, see very little return from the digital distribution of their material. It happened in the music business, as you know. It just about destroyed the old traditional music business.
I do think that copyright laws were designed before we had this mass digital distribution of content. They probably need to be reviewed and brought up to date, so that there is a means.... We put in a possible suggestion. If you click through to a journalist's story, then at that point perhaps that journalist and the newspaper that employs him should receive a payment. There are ways to get at this.
The two companies, the two oligarchs really, Facebook and Google, take 75% of the digital revenues in Canada. It's an enormous amount. That's money that once underpinned our business model. There needs to be some approach through copyright. I've suggested that in the old cable model there were a lot of Canadian television producers who got a slice of the cable bill because they were on a speciality TV channel, like a home improvement or food channel, or whatever.
Is there some way of enacting that type of regulation, which would allow for a better split between the Googles and the Facebooks and the newspapers that are actually generating that content? A great deal of Internet traffic is going to news sites. That's what people are searching for. Readership, as you've probably heard many times, has never been greater. It's just that it's all free today.