Madam Chair, honourable members, thank you for inviting me to talk with you today.
By way of introduction, you may note from my accent that I was born in the United States. I immigrated to Canada in 2001, and became a Canadian citizen a few years later. You'll see from my submission that I'm CEO of Observer Media Group, but what you won't see is that I'm the mother of four wonderful children. I feel really fortunate to be able to watch them grow up and begin to establish their futures in Canada, where the days look so bright. Canada has given a lot to me, and it is very important to me every day to try to give something back to Canada. That's why I've devoted myself to building a company whose core mission is creating a positive future through influential journalism.
I had my first journalism job when I was 16 years old. Being a journalist is what I've done for much of my career. It's what I was trained for, it's what I love, and it's what I do best. But as you guys know all too well, the business model for journalism is in such distress that many of my colleagues have had no option but to leave the profession they love. Rather than do that, I started my own company.
Observer Media Group is a journalism organization producing two daily digital-native publications. That is to say, we're online only: National Observer and Vancouver Observer. Our submission to this committee outlines recommendations for the role that the federal government, with respect to journalism in Canada, can play.
I'll spare you further hand-wringing over the state of Canadian journalism and the state of journalism in the world and get straight to the point. We believe journalism needs to be addressed as a category of support distinct from discussions of Canadian content, culture, and entertainment. Good journalism is necessary for the democratic process to function well. It is a public good, in the sense of being foundational to effective politics, much like education. As such, the present crisis in Canadian journalism deserves to be addressed directly by policy-makers. We urge government not to conflate support for journalism with the needs of other sectors.
Here are some policies that we recommend be undertaken directly by the Government of Canada. First of all, we would love to see Canada create a hybrid tax and non-profit status for journalism organizations. We urge the government to establish a category for journalism organizations, similar to universities. Philanthropic foundations should be able to make grants to support newsgathering and investigative reporting organizations. Individual donors, philanthropists, and readers should be able to make tax-deductible donations as stand-alone contributions or through crowdfunded efforts. Note that new media organizations in Canada are broadly unwilling to establish innovative structures because of the risk of CRA interference with freedom of the press in anything other than a for-profit structure. Another idea is to create incentives for investors to support emerging, independent digital media journalism—incentives and grants for job creation in journalism, incentives for capital expenditures, including digital applications.
We also recommend that Canada follow the example of European jurisdictions in cracking down on Facebook and Google for tax avoidance. These companies are simultaneously vacuuming up advertising dollars, which previously have supported news organizations, while avoiding their fair economic share of contribution to Canadian society. In addition, these companies, which are among the top ten largest publicly traded in the world, receive federal and other government advertising contracts effectively subsidizing American tech giants at the expense of Canadian news organizations. Please note that academic studies find that a decrease in advertising revenue is demonstrably related to a reduced quality in journalism.
There is much more in our submission that I urge you to read. I am not going to read it all here, because I'd like us to have a chance to talk and for you to ask questions in a more informal way. However, I want to say that Observer Media Group's business model has been based, for ten years, on leaning in to the changes taking place in the industry today. We've grown through finding new ways to leverage opportunities in a turbulent environment. Building resources for reporting primarily through crowdfunding has taught me that our most important relationship is with our readers. I have learned that there are thousands of readers in Canada who value and will gladly pay for profound stories with universal meaning that document a changing world that they recognize, stories told with fairness and compassion.
We have found a small group of investors who support National Observer because they know how important critical reporting is in a healthy democracy. In launching a paywall last August, our readers affirmed this again, providing in our beta testing that in time we can grow and sustain National Observer's thoughtful, award-winning journalism, journalism that improves people's lives and supports the foundations of democracy on a daily basis, that at its best is a voice of the people. Our team of journalists is devoted to helping secure a future for strong, independent reporting in Canada. We just need a few more tools to help us along the way.