Canadian Heritage Committee on Nov. 15th, 2016

[The Chair, Liberal, Hedy Fry]

Good morning, everyone. I'm going to call the meeting to order. We have a few people who will straggle in, but I think we need to begin.

I would like to apologize to the witnesses who have been waiting. We had a vote, and of course that delayed things.

I'm going to put it to the committee as a group to tell me if you are interested in doing an extra half an hour. We do have the ability, with Google, to stay half an hour from their end. We have this room—there's nobody else coming in—and if some of you need to leave, well, six is a quorum, so hopefully we may be able to still have a quorum here.

Is there any feeling about this? Can I get some indication that everyone thinks this is worthwhile? People have prepared, and to cut off their time is a little unfair.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

What time are you planning on?

[The Chair, Liberal, Hedy Fry]

We would go to about 1:30 p.m.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I have to leave at 1 o'clock, unfortunately.

No one cares about me anyway.

[Voices]

Oh, oh!

[The Chair, Liberal, Hedy Fry]

Maybe we can get the whip's office to look at that.

We shall begin. This morning in our first hour we have Cogeco Media, Monsieur Martineau on video conference. We have Influence Communication, Jean-François Dumas. We have The Globe and Mail, Phillip Crawley, publisher and chief executive officer. We have Rebel Media. Mr. Levant is not here, but we do have Brian Lilley.

This is our first hour. Because of the time and because of the number of witnesses, normally you have 10 minutes, but I'm going to ask you to please make your presentation in five minutes. After that, there will be an interactive session in which there will be questions and answers, so if there are pieces in your report that you weren't able to fit in, I am sure somebody will ask you those questions and you can fill them in then.

Our first witness is Monsieur Martineau, for five minutes, please.

[Pierre Martineau, Director General, News and Programming, FM93, Cogeco Media inc.]

Good morning.

I would like to pass on to you some observations from 30 years of experience in radio and television, in both major and intermediate markets. I have worked in Trois-Rivières and Montreal, and I have been working here in Quebec City for five years now.

Right off the bat, let me say that, in the markets where I have worked, people had reasonably easy access to local information. Even in smaller markets, reporters are working around the clock, seven days a week. They are ready to become involved and get on the air whenever anything happens. They are also ready to work on the websites of the companies for which I have worked.

Here in Quebec City, the audience is well served with information, because we have two dailies, two television stations providing local news every day, and a dozen or so radio stations, half of which are talk radio stations. With a media presence like that, you can see that people have an embarrassment of riches when it comes to information.

It also forces some media to go the extra mile to inform people and to set themselves apart, by investing in investigative journalism, for example.

Of course, an information battle is also being fought on the Internet. Most particularly over the last two or three years, the media have made more and more effort to have an Internet presence. Sites are now being updated around the clock, seven days a week. So the public has access to information instantly.

That said, we are seeing that more and more is being asked of the reporters. With the proliferation of platforms, reporters now have to prepare stories, report live, write content for the Internet, and be active on social media.

In conclusion, in my opinion, the public has never had so many sources of information. The problem that comes with that is that the public now has to distinguish credible information sources from those that are not. Reporters too have to quickly get used to this new reality. They must handle news more and more quickly on various platforms while still keeping their rigour.

That is my presentation. I am available to answer your questions.

[The Chair, Liberal, Hedy Fry]

Thank you so much.

Now we will hear from Monsieur Jean-François Dumas.

[Jean-François Dumas, President, Influence Communication]

Madam Chair, members of the committee, thank you for this invitation today.

The comments that I am about to make in the next few minutes are based on our expertise in the last 15 years. We have conducted a lot of analysis and research and made a lot of observations on the media ecosystem. We have also conducted two studies for the Conseil provincial du secteur des communications of the Canadian Union of Public Employees on the regions as a whole and on local information in various communities.

Taken together, our observations tend to demonstrate that the amount and type of local information becomes a major social, political and economic barometer of a region. In other words, a region’s state of health is significantly expressed through its media. We often see that the more active and dynamic the media, the more economically and politically dynamic the regions.

Those involved in society, whether politicians, the public or the media, often wrongly believe that the importance of a societal phenomenon is directly proportional to its media coverage. The more the media talk about a topic, the more important it is thought to be. That is not true, but it is what people believe. As a result, we have seen over the years that regions as a whole tend to disappear in the media ecosystem.

In the last 15 years, all regions of Quebec have lost 88% of their speed and weight in Quebec’s overall media ecosystem. At the beginning of the century, about 8% of Quebec’s daily media content dealt with the regions. Today, in 2016, it is less than 1%. So content specific to a region tends to disappear. More and more, the same content appears throughout Quebec, from Gaspé to Gatineau, over the entire province. We have seen that those specifics have tended to disappear completely and the regions have tended to disappear gradually from the media ecosystem. That is what is happening in Quebec.

We have also conducted research and analysis on cultural communities elsewhere in Canada, including on francophones outside Quebec.

To give you an idea, according to Statistics Canada, francophones outside Quebec make up more than 3% of Canada’s population, but they do not make up half of 1% of the news on all Canadian issues.

Let me give you some points of comparison. In media terms, francophones outside Quebec receive coverage that is the equivalent of the horoscope in Canadian media. Expressed in terms of an average hockey game in Canada, francophones outside Quebec receive about five minutes of coverage. Essentially, in terms of the media, francophone cultural communities outside Quebec are gradually disappearing from the media ecosystem.

Let us remember what we said earlier: people believe that the more a topic is talked about, the more important it is. They believe that, when a topic is not talked about, either there is no issue or the issue is over and done with. So, like a number of communities, the regions are gradually disappearing from the media.

When we analyze in detail the media that serve local information the best, we make some fascinating discoveries. The primary medium, the one with the most influence in the media ecosystem, is generally television. Television plays a very important role in transforming and influencing the public, in changing ways or in having very short-term effects. Television generates 13% of all news in Canada on a daily basis. However, with local information, television generates only 5% of local content.

Unfortunately, television is one of the media that serves local communities least well in terms of local information. There are fewer and fewer local stations; there are fewer and fewer staff, and we see what we call the “McDonaldization” of the content, meaning that the same content is provided everywhere, in all regions.

We have even noticed that, with local information on the major national networks, there will need to be a national hook for a region to be covered. In other words, if they want to cover the Gaspé, there has to be something of interest to the people in Montreal, otherwise there will be no coverage. That serves to weaken the representation of the regions and the communities in the entire media ecosystem, both in Quebec and elsewhere in the country.

There you go.

Thank you, Madam Chair.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

Mr. Crawley of The Globe and Mail, you have five minutes.

[Phillip Crawley, Publisher, Chief Executive Officer, The Globe and Mail]

Thank you for the opportunity.

I have been running the Globe since 1998. I'm also co-chair of the Canadian Press and I sit on the board of Newspapers Canada and the World Association of Newspapers. Prior to coming to Canada in 1998, I was running, either as an editor or CEO, newspapers in Europe and Asia and in New Zealand. I tend to look outside of our borders for trends, patterns, and solutions.

I've read the evidence that my colleagues from the industry have presented, so I'll avoid repetition. Really, my purpose here today is just to say why The Globe and Mail is a little different to some of the other people you may have been hearing from. We're subject to the same disruption, but our response is different. The Globe is suffering the same steep decline in net print advertising revenue that others are suffering from. It's been going down at about 10% a year for the last four years. Effectively, our print ad revenue was 40% lower in 2015 than it was in 2011.

What makes the Globe different and puts us into a better position is that we've continued to invest in high-quality journalism, because we believe that if you do, readers will pay for good content, whether we deliver it via print or via a digital platform. No other paper in Canada has been able to derive significant revenue from readers paying to access content digitally. Others have tried, and failed because the content is not sufficiently compelling to command a price or sufficiently exclusive. This year our revenue from readers paying for content rose 7%, and we expect that growth to continue. Soon revenue from our subscribers, print and digital, will exceed our total advertising revenue.

Our investigative journalism wins national and international awards for both print and digital. I could list a number of examples, but I think the one most topical recently was that we did a very long, laborious investigation into what was happening to the real estate market in B.C. The B.C. government responded by introducing a foreign buyer tax, and you've seen the federal government announcing measures to cool the excesses of the market. We've also been running a lot of investigative journalism on the suicides among members of the military, which again took a lot of work. It meant one of our reporters spending 18 months combing through every death notice in Canada to find the fact that there were more than 50, because that information wasn't forthcoming from the government.

My point is that this is important work, and I think we need to make sure it continues. It takes resources and long-term commitment. Many newspapers in Canada now lack those resources or that kind of support. The difference comes down to quality of ownership. The Globe and Mail is fortunate to have an ownership that is passionate about good journalism and cares about making a difference for the better in Canada.

That ownership is Woodbridge, which is the investment arm of the Thomson family. It has three generations of rich experience in owning media here, in the U.K., and in the U.S.A. They believe in editorial independence, going back to the early days of Roy Thomson, and they enable me to hire some of the best talent around. That experience, that consistency, is very important. You can see examples in Canada where frequent ownership changes are not beneficial to the preservation of good, strong journalism.

You won't find Woodbridge asking for government handouts or subsidies, but we do like to play on a level playing field. It's not level if taxpayer dollars directed to the public broadcaster make the competition for digital ad dollars more difficult. The CBC is the Globe's largest competitor in the digital ad space amongst Canadian-based media. My colleagues and I in the industry do not support the notion that handing out more money to the CBC helps local or national newspapers.

I think it's worth looking at what's happened in the U.K. with the BBC. I invite the committee to look at the British government's white paper, which restricts the ability of the BBC to accept digital advertising on its domestic websites. Recently it has been announced that the BCC will provide £8 million to enable up to 150 journalists to cover local councils, starting next year. BBC will also make its videos available to local newspapers.

The Globe has benefited from government money in the form of digital tax credits paid out by the Province of Ontario. That has enabled us to hire staff with digital capability at the Globe in a very positive way—journalists, developers, data scientists—to help us with this rapid transition and change in consumption habits from print to digital. Unfortunately, that scheme has now been closed to newspapers, and I invite the committee to think about ways in which digital tax credits could aid that inevitable transition across Canada.

I'll go back to the level playing field for that one final point: the field is sloping unevenly if foreign-based digital companies are exempted from Canadian tax rules as they apply to advertising sales.

Thank you.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

Finally, we have Mr. Lilley from Rebel Media.

[Brian Lilley, Co-founder, Reporter, Rebel Media]

I want to thank you, Chair, and all the members for having me today. Some of you will know me, and to some of you I might be a new face. I've been on the Hill for the last 10 years, first as the Ottawa bureau chief for Standard Radio, which was bought out by Astral, and those stations now, of course, have been bought up by Bell.

I've been working in media—print, radio, television, and Internet—for the last 16 years. I've been in the business long enough to have started in radio when we still cut tape with razor blades, but young enough to have been early on the Internet side. I have worked for most of the major broadcasters and I still, in addition to working for the Rebel, do work for one of the major broadcasters, hosting a talk radio show on News Talk 580 CFRA, but my comments here today are directly from me and from the Rebel and do not represent CFRA or their owners, Bell Media.

Rebel.media came out of the fall of Sun News. Perhaps that experience is why my message to you will not be that we need help, or that the media industry needs help, but that the best thing you can do is create a level playing field, and mainly you can do that by getting out of the way. Sun News was a victim of an awful lot of bureaucracy and an awful lot of government mandates that were not met by the support that you would expect when the government requires certain things. I would be happy to answer questions on that.

From the fall of Sun News came the Rebel. We started in our living rooms, I and Ezra Levant, recording videos the day Sun News went down. People laughed at us, these two guys who had been on big TV shows, creating lots of controversy, starting in their living rooms. Well, almost exactly one year and nine months later, we have a staff of 25, which is small potatoes compared to some, but we've been hiring, which is rare in this industry.

We have 425,000 YouTube subscribers. When I started preparing my notes yesterday, it was 422,000. It's 425,000, and growing, today. This is more than any legacy media outlet on YouTube in Canada. It's not as much as my neighbour next door here at VICE, but it's probably the biggest of a Canadian-based media outlet, with 105 million video views to date, 100% viewer supported, and zero tax supported. We've been able to grow by providing content that the audience wants.

We've just had crews come back from a UN conference in India with the WHO. We have a crew over in Marrakesh, Morocco, for the COP conference, and we plan to do more reporting like that in addition to opinion-based commentary.

I agree with what has been said, by Mr. Crawley and by others, that you can't have a level playing field when the public broadcaster, the state broadcaster, call them what you will, has decided they want to be all things to all people. CBC has a mandate from Parliament. You and your colleagues in the House of Commons supply that mandate through the Broadcasting Act, and I will tell you emphatically that CBC has been violating the Broadcasting Act and their mandate for a long time. There is no reason on God's green earth that CBC should be running a service of digitally streaming music that competes with Apple, Google, Spotify, and every single private music radio station in this country. There is no reason they should be expanding into digital-only platforms of opinion. When people complain about that, we're told, well, they have to have a digital presence. Nobody's going to argue against that, but this isn't promoting their radio or television programs; this is creating new areas.

I reported several years ago on Radio-Canada deciding that what the Internet actually needed was more free pornography. They bought a series from France and posted it online for free. It was a little bit shocking. I think everyone knows that this is actually something that the Internet has an awful lot of, and we didn't need taxpayers' money going to it.

[The Chair, Liberal, Hedy Fry]

You have one minute.

[Brian Lilley]

We don't need government subsidies in order to grow. We don't need regulation either. I know that many people are concerned in their home communities about the concentration of media ownership. Well, some of the rules you have in place have resulted in that concentration. When you restrict the ability of small, local owners to access foreign capital, it reduces the number of people who can buy the media properties, be it print, radio, or television, and keep them with some local control. Thus, the Osprey papers became Sun Media, Sun Media became Postmedia, and now they're all one giant company.

I'll leave my comments at that, other than to say that we do hope that you consider deregulation rather than more regulation, and that you consider perhaps if not curtailing CBC spending then at least having them stick to their mandate.

[The Chair, Liberal, Hedy Fry]

Thank you.

Finally, we have VICE.

Mr. Gruzuk, you have five minutes, please.

[Michael Gruzuk, Director, News, Digital and Special Programming, VICE Canada]

Good morning, Madam Chair and committee members. My name is Michael Gruzuk. I am the head of news and digital for VICE Canada. Thank you very much for including VICE as a witness here this morning.

In my remarks today, I'll talk about how VICE does tell local stories and delivers them globally in a world of expanding consumer choice.

For those who may know a small bit about us, let me tell you a little bit more. We have come a very long way since our humble beginnings as a free punk publication in the streets of Montreal, founded by Canadians Shane Smith and Suroosh Alvi. We are now the world's pre-eminent youth media company. We are a news, content, and culture hub and a leading producer of award-winning video that reaches millions of young people around the world on our unrivalled global network. Spanning the globe with production offices and editorial operations in now 35 countries, VICE reaches hundreds of millions of young people per month across all platforms, including 11 different digital channels, linear TV, mobile, and increasingly film.

In Canada we have experienced tremendous growth in the last couple of years. We now have offices in Toronto, Montreal, and Vancouver. We maintain a strong network of diverse freelancers across the country. We make hundreds of hours of original in-depth and often provocative—admittedly provocative—content focused on under-reported stories about under-represented people and places, with a firm commitment to our immersive storytelling style and, again, to diverse voices.

To say a little about news, in 2014 VICE successfully launched the digital vertical VICE News, a separate section of vice.com. It is there that we produce in-depth video and editorial content from communities here in Canada and around the world. Just this past September, we celebrated the launch of VICE Québec, our digital vertical for the Quebec market. In fact, the team there recently won two Gémeaux awards for documentaries produced in the last year. Both of their documentaries are great examples of the kind of “local goes global” storytelling that VICE is committed to and finds success with, telling stories from Montreal—or in one case a small community in the Gulf of St. Lawrence—and bringing them to a Quebec audience but also to a global audience.

Last month, we also launched VICE News Tonight, a new groundbreaking daily news show that airs on VICELAND and HBO in the United States. It's our first foray into nightly news, with a format geared towards a youth audience. Just yesterday, we launched our own Canada-specific VICE News site. This is very exciting for us, because we now offer our audience at home a VICE perspective on Canadian news, and news from a Canadian perspective.

While we currently have a major presence in such centres as Toronto, Montreal, and Ottawa, as well as Vancouver, we have spent a lot of time travelling this country in the last couple of years with a firm commitment to covering the margins geographically of this country—the north, Nunavut, Fort McMurray, and northern Manitoba as examples. Our investment in local storytelling isn't traditional bricks and mortar, but we do travel to these local communities and are committed to telling stories there. We go over to the stories that interest us and we tell them in a way that's relevant to youth in those communities. What we find is that it's very relevant to youth around the world. We can be present without being rooted in one place.

The amazing thing about VICE is that when we produce content—let's say some of our work on radicalization out of Calgary—we can translate the story to all 35 countries around the world, bringing local stories about Canadians to a global youth audience.

Our approach is quite simple, and this is the one message I want to stress today: we are platform agnostic, which means we're not beholden to formats. We speak directly to our audience, when and how they would like it. Our method allows us to connect with audiences outside of our own network and build upon this by actively leveraging social media to increase engagement. With the assistance of social media, in Canada alone VICE currently reaches an audience of more than 30 million a month.

At a time when traditional media are becoming more and more concentrated and newsrooms are shuttering and looking for strategic partnerships, we are open to this. VICE currently enters into partnerships that are symbiotic with our brand, such as those with Google, Rogers, Facebook, and Live Nation. These partnerships enable VICE to deliver content on all platforms and connect with an audience outside of our network. For example, VICE recently launched Daily VICE, a partnership with Fido. Daily VICE is a five- to eight-minute daily video feed with up to three stories covering news, content, culture. Just this past weekend, we did a lovely local story about the park across the street from where Leonard Cohen lived.

In closing, we know that the cost of producing traditional news programming is very high, one that has caused other media outlets to struggle or even shutter as a result of their inability to keep up with the changing media landscape. Our model scales these costs, such that we can produce local, national, and international news that local community and even some national programmers are experiencing difficulty with. We can help other media with their local programming needs. If those media outlets engage with VICE to produce content that is relevant for the millennial consumers in their given market, then we can share in those content endeavours.

The digital revolution has very much disrupted the media industry, but it also provides content creators with a tremendous opportunity to tell stories and distribute them beyond their own neighbourhoods. No other media company can mimic VICE's voice, but we can help others by lending our voice to local content, with a global reach that you want to reach.

Thank you.

[The Chair, Liberal, Hedy Fry]

Thank you very much.

Now we begin the question and answer session. The first session is a seven-minute session, and that includes questions and answers. I would ask everyone to be as crisp as you can to get enough information through into that interactive group.

We'll begin with Ms. Dabrusin for the Liberals.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

My thanks to all the witnesses.

That was a great cross-section of what's happening in our media in Canada.

Mr. Crawley, I want to start by asking you a couple of questions. I am in the midst of reading a book by John Stackhouse, Mass Disruption. I'm reading it on an e-reader, which kind of goes to some of the points that have been made along the way. First of all, he uses the term “randomonium”, and talks about how a lot of the media we're accessing now gives us very instantaneous but kind of random news, and seems to posit that as a contrast to investigative journalism. We've heard a lot of witnesses talking about different ways we should be supporting print media in particular, but also other forms.

What should we be focusing on as a committee when we're looking at this? Are we looking at focusing on investigative journalism or the medium to transmit the stories?

[Phillip Crawley]

I think it depends on what your priorities are. Clearly there is a risk that has been identified, that if local newspapers close—it's highly likely that many will over the next ten years—there will be less scrutiny, less attention to how democracy works, and less information on what matters in community life.

In terms of the specific content that we choose to produce, in our case, we believe we benefit most when we're serving up content that, for our audience, matters to them. We're not chasing clickbait. We can all do that, but we don't. We have a very specific audience in mind, and it's an audience of concerned citizens who want information that they can't get anywhere else. From my point of view, the risk is that if local papers disappear, there are less people doing that.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I would like to hear VICE's point of view on this too.

You raised the point of being platform agnostic, but the same goes for the Globe.

If we're looking ten years into the future, does it matter whether it's print based or on other platforms? What you're talking about right there is reaching out to readers with strong journalism. When we're considering what recommendations we're going to be making, what we're going to have to look at is whether it's platform agnostic that we're looking forward to—or is it that we're looking at supporting print media specifically?

[Phillip Crawley]

Obviously we're still seeing a lot of customers who want to buy a paper. My biggest complaint every day is not about what's on our website, it's about whether the paper has arrived on the doorstep at 6 a.m. That is still the biggest issue for many people: “I haven't got my paper to read at breakfast. What are you doing about it?” We have 150,000 subscribers who still want a newspaper. We produce in six different plants across the country to do that. It's very expensive to do that. The trucks are driving enormous distances to take papers to places like Regina, Saskatoon, and Winnipeg.

Inevitably there is some erosion of that. There is less of that happening than there was ten years ago, of course, but there's still a strong demand for print. There was an interview this week with the editor of The Wall Street Journal. He was asked, given the shift in consumption habits to digital, whether he still sees publishing a newspaper. His answer was very much yes, that they have lots of people who still want that newspaper. They have a million a day.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you.

Turning now to VICE, one of the pieces of evidence I was really touched by was when we were listening to a witness from The Tyee. There was a woman who was talking about fewer opportunities for young journalists to get into the industry. You mentioned that you were platform agnostic. What do you have to say about our focusing on the medium or the investigative journalism? If it's one or the other, how do we do that?

[Michael Gruzuk]

It's a balance that we're increasingly trying to strike. At VICE we're committed to daily service journalism in the sense that we need to cover what happens across a 24-hour, seven-day period, but we are committed to and inspired by great organizations like The Globe and Mail. We are committed to carving out time to ensure that we have journalism that has impact.

We've had a series of stories in the last year—our focus on water issues in first nations' communities, culminating in a visit featuring the Prime Minister, and our coverage of the opioid crisis in Canada—where we were very clear that we needed to cut through the noise and prioritize certain kinds of stories. We find that the millennial audience does care about these stories. The term “clickbait” was used. It's something that everybody is certainly commenting on and noticing, especially in the last week, in terms of what people are viewing, but we find more than ever that young people are distrustful of a wide range of news sources. The burden is upon us to ensure that we have that credibility and invest in stories that matter to young people, about the world, climate change, and what have you—

[The Chair, Liberal, Hedy Fry]

You have a minute.