Thank you, Madam Chair.
On behalf of the Department of Canadian Heritage, I would like to thank the committee for inviting us to appear as part of its study on the media and local communities.
My name is Jean-François Bernier, and I am the director general of cultural industries at the Department of Canadian Heritage. I am joined today by Helen Kennedy, director general of broadcasting and digital communications; Marthe Bujold, director of strategic policy in the broadcasting and digital communications branch; and Luc Marchand, director of periodical publishing policy and programs in my branch.
Our intention today is to cover two areas of interest to your study: the newspaper and broadcasting sectors—in 10 minutes.
We have prepared presentations for your attention. I'll start with newspapers, and Helen will follow with broadcasting.
Please go to page 3 of your deck.
Every year, Canada's newspapers contribute more than 30,000 jobs and nearly $3.7 billion in revenue to the economy. They create and disseminate wide-ranging content to inform and entertain Canadians. Newspapers play an important civic role, by promoting the accountability of public and private institutions.
Throughout the world, the newspaper industry is adapting to the challenges of the online environment. In Canada this has translated in recent years into revenue losses. Despite efforts to innovate, the business climate remains challenging. The Canadian newspaper industry consists essentially of community newspapers, which are mostly weeklies and free, and daily newspapers. As we see on figure 1 on page 6 of your deck, the number of community newspapers has been relatively stable over the last five years at just over 1,000 titles. For these, the main business model remains print.
Community papers have experienced a moderate decline in revenue, as demonstrated in figure 2 on page 7. In contrast, the number of daily newspapers has declined by about 15% in the last five years. Still on page 6, you can see the decline in numbers there. Most dailies are maintaining a dual business model in print and online. They have faced significant reductions in their overall revenues and readership.
Moving right along to page 8, Canadians' news consumption habits are changing rapidly. People, especially young Canadians, are increasingly turning to online content to inform themselves. As readers' attention moves online, so do advertising dollars, which have traditionally been a staple of the newspaper industry.
I would really like to draw your attention to the graph on page 9. I will not go into detail, but this shows it all.
Look at page 10. The erosion of revenues has led to closures, job losses, and consolidation. Today in Canada three main groups own almost 66% of all daily newspapers and 35% of all community newspapers.
In recent years, new business models have emerged.
For example, in conjunction with its paper version, the Winnipeg Free Press is generating revenues with a pay-as-you-read approach.
La Presse seems to have found success with a digital-only model, through its La Presse+ app. While testing innovative digital strategies, some newspaper publishers recognize that print remains the preferred choice of many readers, particularly, in rural areas with weak bandwidth and among a generation of older Canadians.
Moving on to page 12, unlike some other cultural sectors, such as broadcasting, there is no federal policy framework for newspapers. However, over the years the Government of Canada has implemented some specific measures to support this sector.
Section 19 of the Income Tax Act intends to encourage Canadian ownership in the newspaper industry. It does so by preventing Canadian advertisers from getting tax deductions for ads placed in foreign-owned print newspapers. For its part, the Investment Canada Act requires that foreign investment in the newspaper industry, like that of any other cultural industry, be of net benefit to Canada.
Lastly, since 2010, the Canada periodical fund has provided support for the production of Canadian content. More than 800 community newspapers and magazines are supported every year. Free periodicals and daily newspapers are not eligible for the program. The bulk of program funding is calculated using a formula based on the number of copies sold. In other words, the more the publication sells, the more support it receives from the Canada periodical fund.
Thank you for listening. Of course, I remain at your disposal to answer questions later in the meeting.
I am now going to turn the floor over to Helen, who will speak to the broadcasting industry.