Thank you for inviting me to speak today.
My name is John Hinds, and I'm the CEO of News Media Canada.
We are the voice of Canada's news media industry. We represent over 600 newspapers and news media publications in all provinces and territories. Our membership includes daily and weekly community newspapers and news sites, and ranges from the largest urban daily to small community newspapers in rural and remote regions.
The news media sector in Canada continues to experience challenges that have only been exacerbated by the pandemic. Over the past few years 250-plus newspapers have closed, and in Saskatchewan alone we have lost over 20% of our newspapers. That was before the pandemic. In the initial months of COVID, we saw another round of closures and mergers, and many smaller newspapers stopped publishing while larger publications saw newsroom layoffs. As a result, there are now more areas of news poverty and news deserts in the country.
Our greatest industry challenge is declining advertising revenue, particularly print advertising, with declines of up to 20% a year. In many ways, COVID simply sped up that trend. At the beginning of the crisis, advertising plunged by up to 75% in many markets, and the industry is still struggling with advertising declines in the range of 30%. Sectors like events, travel and local retail are just not advertising, which has dramatically impacted small community newspapers that rely on print advertising.
What is particularly frustrating is that the impact of COVID on our industry defies the rules of economics. There has never been more demand for our products while at the same time there is so little revenue. Millions of Canadians, nine out of 10, continue to engage with their local news media for trusted news and information about COVID in their communities.
For many newspapers, particularly community newspapers, government advertising was traditionally a major client. Federal government advertising has fallen to almost nothing in the last few years. This defies logic given that our products are read by more Canadians than the digital giants. At the beginning of the pandemic, the government announced a $30-million communication budget, but unlike many provincial governments, there was limited placement in our news media. The government can deliver on its mandate to communicate with Canadians by implementing a strategy of placing ads where Canadians are looking for trusted content and advertising.
Having said that, I want to acknowledge and thank you for the support provided to assist our industry. I also want to acknowledge the impressive team of officials at Canadian Heritage who understand the issues, and are working tirelessly to find solutions.
I want to highlight two areas that allowed the industry to continue to operate during the pandemic.
The wage subsidy was, and continues to be, a lifeline for most publications, and has allowed most to continue to publish and avoid laying off staff. We believe that this program needs to be maintained unless revenue rebounds.
The aid to publishers program has also been a lifeline. This program, which dates from before Confederation, has traditionally been available to small subscription-based print community newspapers. As part of the COVID relief plan, funding was increased by 25%, which allowed many papers to continue to publish. One-time funding was also provided to non-subscription newspapers, and we would ask that this be continued until at least 2021, given the market conditions. Ideally, this funding would be permanent and increased as smaller community newspapers are increasingly challenged in the digital world.
The future of news media is digital, and all our members are looking to a digital future, though that future differs from publisher to publisher. However, without government action to regulate the digital space, the future is grim. Two global monopolies, Google and Facebook, control 80% of the digital ad revenue in Canada, and that continues to grow every year.
Real news costs real money to report, but monopolies are cutting newspapers off from the sources of revenue to pay for it. Their business models are based on using news media content that they do not pay for. Governments and other democracies are fighting back, and we are pleased that the commitment to regulate the monopolies was included in the Speech from the Throne.
We believe that the approach that is being undertaken in Australia is the perfect solution in Canada. It allows newspapers to negotiate fair compensation with monopolies, it levels the playing field, and it does so without relying on government funding, new taxes or user fees. We know that all our members support this initiative, and we hope that you would move quickly on this file.
Thank you.