Canadian Heritage Committee on Sept. 29th, 2016

[Peter Van Loan, Conservative, York—Simcoe, ON]

That's the point I'm making. It's profitable, but those profits are being used not to improve your local coverage, they're being used to maintain and prop up the Toronto Star. That's what I'm complaining about. You are, as you admitted right now, taking the money from the local communities and using it where you're making a big profit to prop up the whole operation where you're not making a profit, at the Toronto Star. I say it's your business model that is hurting the community and local coverage, because of where you're taking the money from and where you're spending it.

Actually, I wanted to ask Mr. Myles—

[John Honderich]

Before you do that, could I please reply to that question, Mr. Chairman?

I did not say that.

[Peter Van Loan, Conservative, York—Simcoe, ON]

You said it's more profitable.

[John Honderich]

I said it's more profitable, that's correct. The Toronto Star is not doing as well as Metroland, but we are not using resources from the Metroland group to prop up the Toronto Star. I never said that and I wouldn't want that to go unchallenged.

[Peter Van Loan, Conservative, York—Simcoe, ON]

It's propping up the enterprise, and we know where the money's coming from and where it's being spent.

Mr. Myles, on the question of copyright, you want to see copyright laws changed. We've heard that from a few people. One question I've asked is, if that were to happen, if you were in a position where you could require that, is there not a great risk that we would see—as I'm told has happened in some jurisdictions where they've done that—these big carriers, like Google or Facebook, simply stop picking up your stuff? That would also result in a net loss of local coverage. You just won't exist on the web anymore to a lot of people who are depending on those outlets for their news sources. Is that a risk?

[Brian Myles]

I think it's a small risk, close to non-existent if you look at it from the Canadian or Quebec perspective. First and foremost, as Martin said, it will act as a triggering point, and providers will start to negotiate with the main media players to give us some form of relevance.

We think that, if they were to pull out, which I doubt would happen, then all our media would benefit. If Google or Facebook were to stop publishing stuff from Quebec or elsewhere, they would suffer an international backlash, and then everybody would have to come to our own application on the mobile platform, on the tablet. I don't see this as a threat or something that we should be concerned about.

[The Vice-Chair, Conservative, Larry Maguire]

Thank you, Mr. Van Loan.

Mr. Nantel.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you very much, Mr. Chair.

My apologies for the kerfuffle at the beginning of the meeting. It was not very acceptable, in my opinion.

There really is a major crisis; it is societal and probably all over the western world. The systems in place worked very well and worked together very well. Now, people are coming in from outside and we do not know what to do about it. Heck, we haven’t even made them pay any sales tax on their services. We are really caught with our pants down. They come in and we just jump up and down, at the same time as they are eating up your business and our distinct cultural identity.

We may have our issues. We may feel that Le Devoir is not covering the NDP enough, or anything else you like, but that is not the point. We want to be happy that you can still be covering us in five years, for better or for worse. That goes for everyone. There may be complaints about regional weeklies. We may find all kinds of administrative issues, but the main issue is much broader, and I am glad that the committee is taking time to examine it.

Are you able to provide us with the wording of the section? I am pretty familiar with copyright as an issue. What is the wording of the section that allows Google to pirate your content, to take it apart and to redistribute it everywhere without compensating you at all? If you don’t have it, could you send it to us? We do not have a ton of researchers here. It would help me a lot.

[Brian Myles]

We are going to check that, of course.

In our opinion, there is a legal void that allows them to use content without any compensation. The same thing was happening in all western countries, until some legislatures sat up and took notice, including the Europeans.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Or woke up.

[Brian Myles]

You have understood very well what is happening to us at the moment. These foreign media, which are huge, are succeeding in grabbing our revenue. They are putting our news on their sites, in order to generate the clicks and attract the users they need. They sell advertising themselves. They use our content to create their audience and to sell advertising. When governments place their advertising on Google, Facebook and so on, what it means is that they are taking taxpayers' money, putting it into an advertising budget and giving it to multinationals who do “pass go” and do not pay taxes on the money they collect, by sending it off to God knows which tax haven.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

I would add that the accountant for the government's advertising service does not mention that no tax has been paid.

I will let you continue.

[Brian Myles]

We are not asking for the advertising budgets to be increased more than is reasonable. Essentially, we could just do with the $19 million that is being invested in Google and other digital media. For traditional media, digital revenue is a drop in the ocean. It is very small, very marginal.

The same goes for the United States. The Pew Research Center has done a lot of research that shows it. In 10 years, the major American newspapers have seen their traditional revenue drop by 60%. Digital revenue is going up, but it never makes up for the losses. When I say that we have exchanged dollars for cents, it is the sad reality.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Mr. Noreau, do you want to add anything?

[Pierre-Paul Noreau, President, Publisher, Le Droit, La Coalition pour la pérennité de la presse d’information au Québec]

Yes, very briefly.

Here's the clever way it worked. When someone lifted a story from Le Devoir, we used to say “according to Le Devoir”. That is where the legal void lies. The practice has just been applied on a massive scale. When news from Le Soleil, Le Devoir, or any other paper appears in Google, they just mention Le Devoir, Le Soleil, or whatever.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

While still keeping up the Internet perception of virtual communities and sharing. It all seems very bucolic, but when you see the money being made by the folks riding around on fancy bicycles in California, it's not as bucolic as it looks. It seems much more profitable for them.

I would like to bring up something else with you. Do not feel bad when you say that you are looking for government support, because I believe that the feeling is common. We even had people from the Alberta Weekly Newspapers Association telling us:

“We're not much into asking for government support, but we must say it's getting tough.”

When we hear that, we see that the problem is widespread. At times, a government's task is to repair an injustice or correct an imbalance that is occurring. You will not find that we are afraid here, or concerned about international treaties, because, internationally, everyone is dealing with the problem. We are protecting our diversity, our distinct culture in North America.

Would you be able to give us a comparison of the support given to other industries with what you receive? Since our study started, I see constantly that members of this committee are receptive, that they are looking for solutions. and that they are listening to you. The elephant not in the room in all this, and I do not blame him, is the Minister of Industry. I would like people in that department to be doing their bit.

How much support do you receive from the state? How does that compare to the support given to other industries? We are certainly talking about an industry here. If you do not have those figures with you, I would ask you to send them to us later.

My question goes to you too, Mr. Honderich.

[Martin Cauchon]

We will be able to get those figures for you. We have tables that provide comparisons with what is being done elsewhere in the world. You will be able to see that, in terms of government assistance in other countries, we can't even talk about a comparison. We are in the Stone Age.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Can you compare the assistance you receive with the assistance given to other industries: textiles, lumber, automobiles, for example?

[Martin Cauchon]

We can check.

Just now, you said that we should not be embarrassed to come here asking for assistance. Essentially, what we are asking for is a partnership. We are asking for the government to intervene to settle issues that are basically unfair. It did it in the past, you know. It is the role of government to intervene when particular sectors need support. When we talk about a democracy, in my view, that is a constitutional question, a fundamental question.

The government did it in the past during the groundfish crisis in order to support a lot of communities and put them back on their feet. That was great; it was very good. They did it for the aerospace industry, precisely because some giants were competing very unfairly with Canadian companies. They did it to extend a helping hand, to get them to the same level so that they could face the competition on an equal footing. They did it, in a general way, for multimedia and technology. You know, no company operating in Canada today does not receive a tax credit.

Essentially, what we are asking, is for you to help us, on a specific and one-time basis, to turn a corner that all members of the coalition are already navigating. It is a matter of democracy, but also a matter of need. Basically, we know that our products make a difference. We know that our products help people who want to advertise theirs. We are asking the Canadian government to start publishing its advertisements in all our products once more. By that, we mean the paper versions, but also the digital versions that most members of the coalition have developed.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Would Mr. Myles like to add anything?

[Brian Myles]

A number of industries are receiving assistance. The Quebec tax credit for the production of multimedia titles costs half a billion dollars. The Quebec tax credit for film and television production is up to $115 million annually. The Canada Media Fund has reached $375 million. All those funds have zero dollars for us. We have no access to them. However, we are launching ourselves into the digital universe like all the other media.

[The Vice-Chair, Conservative, Larry Maguire]

Thank you. I'm leaving it there as well. Maybe Mr. O'Regan will let you finish that answer.

I'll turn it over to Mr. O'Regan.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Actually, I will.

Monsieur Myles, perhaps you'd like to take a few minutes to finish the answer.

[Brian Myles]

Well, it's basically that if you look into the cultural industry especially in Quebec, no one, no artist, would have thrived and survived without some sort of program, subsidy, tax credit. The movie industry relies on tax credits. Those tax credits amount to more than $100 million a year. The multimedia industry in Quebec is thriving. It's thriving because we subsidize jobs. We created a hub. It's at a cost of half a billion dollars a year.

When I say a screen is a screen, it's very important for us that we stop treating the print media differently from the electronic one, because we're not print any more. Right now I have a newspaper. My readers are willing to pay a hefty price for that paper, but tomorrow's reader will be on that thing here, and I need money to reach them with that. If I deliver a newspaper to their door, I'll have to give them a list of instructions to help them read through it, because they'll have to flip the pages and they won't know how to do it; they want to swipe.

We need access to those funds. We need to treat the print media like a digital media, to enable us to take our digital turn to the next step.

[Martin Cauchon]

If I may, Mr. Vice-Chair, we've been speaking about democracy and about newspapers from across Canada making the difference to local communities. This is what the coalition is standing for, essentially. Of course, when you look at our businesses, we're talking about 2,500 employees from across Canada who are waking up every day and getting to our local newspapers to provide people with decent, good quality news. We've been doing that for centuries. The paper le Droit, for example, we were involved in the community. We were involved in many fights. We did that with Le Soleil newspaper, La Tribune, La Voix de l'Est, Le Quotidien, Le Nouvelliste all very strong brand names from across the province of Quebec that people are very proud of.

I'm going to tell you something. In five years' time, I'm going to be back with the same coalition, and we'll be glad to report that we're still here, stronger than ever, because I'm sure that ahead of us, the Canadian government will choose to be a partner in making sure that, together, we are going to be able to transform the business model that we have. We did that in the past with the fisheries. I do remember very well because I was minister. We did that as well for the magazines, for the TV, and it's not going to be a never-ending story. It's going to be for a limited period of time. As a matter of fact, we do believe in what we're doing to the point that we have all started to get involved in the digital world.

If you look at Groupe Capitales Médias, for example, a year and a half ago we were just print. Now we're what we call multi-platform. When you look at the business model that's developing all over the world today, look at the Gannett group in the United States and what they are getting into. It's exactly the new business model that we have ahead of us. We're simply asking you to help us for a brief period of time, because the people that we're fighting against are so much bigger and have so many more advantages than we do, and I do believe that we should take a serious look at amending the copyright law here in Canada, like they're doing in Europe, for example.

Thanks again. We're glad that you have this mandate.