Canadian Heritage Committee on Nov. 27th, 2020

[Dr. Alex Mustakas]

There's going to be a new cost to recovery because we will have lost, I think, to other industries some very talented, creative individuals. It will mean a new sense of training and coming up to speed that is going to take a number of years, unfortunately.

One thing I would like to add is we talk about the higher tier musicians or actors who are successful, and financially successful. We have to remember that there are hundreds of thousands of others early in their careers. Their secondary industries have closed down as well. Musicians can no longer teach. They're trying online but it doesn't work as well. There are catering jobs and bartending jobs. That's what it is to be an artist, unfortunately, in early career, so—

[The Chair, Liberal, Scott Simms]

Thank you.

Madame Brière, I understand that you're splitting your time with Ms. Dabrusin, is that correct?

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Yes, that's correct.

[The Chair, Liberal, Scott Simms]

Very well.

The floor is yours for two minutes and thirty seconds.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Thank you, Mr. Chair.

My question is for Ms. Drouin.

Thank you for accepting our invitation.

As you have explained, the music industry is heavily impacted by COVID-19. We are well aware of and sensitive to the issues affecting our local artists. We want to continue to offer them a support plan, as we did through the emergency fund, which enabled us to provide $500 million to organizations responsible for culture, heritage and sport. Phase 1 helped people who had already received funding. Phase 2 was more open to everyone.

I met with the Conseil de la culture de l’Estrie, where I was told that there was a loss of skilled labour in the entertainment and artistic production industry. Due to the interruption of show productions, many technicians and specialists have moved to Montreal or have opted for another career.

Could you tell us a little bit about the scarcity of skilled labour in the regions in our music industry?

[Solange Drouin]

This is a real concern. Will it be a problem? It’s hard to quantify it, because there is no activity. But all the people we surveyed during those months of inactivity told us the same thing. Of course, it affects musicians and singers in the first place, but it also affects technicians and creators of all kinds who are needed to put on a show. It takes more than an artist and a microphone to put on a show; other people are needed as well, of course.

We anticipate that some of these people will no longer be available or will have reoriented themselves. Some of them already are moving towards the audiovisual sector, for example, which is a little more open than the others. Some people are also trying to move right away into the television and film sectors, which are already more open.

So this will be a real problem. It would be catastrophic to lose this workforce. It is an essential fabric that must absolutely be preserved.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

With regard to the—

[The Chair, Liberal, Scott Simms]

Ms. Dabrusin, please.

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

Thank you, Mrs. Brière.

Thank you for sharing your time.

As part of the $500 million in emergency funding, almost 40% of that money went to non-existing recipients, including what I thought was really special in my community when I saw it. It was support for live venues and the infrastructure that Madame Drouin was talking about, the promoters, all of the people who work on that side. Focusing on the wider picture infrastructure question, how important do you think it is to quickly reform the ecosystem of broadcasting or copyright, the broader piece, to be able to do the recovery properly?

[Solange Drouin]

Yes, it's urgent. I hope that I will be in front of you next week to discuss Bill C-10. It's something that we've been waiting for. I've been at l'ADISQ for 28 years, so I've seen a lot. We've been waiting for this bill to be a reality since, I would say, 1999, since the bad decision from the CRTC to exempt the new media order, as it was called at the time. It's an urgent matter because finally we'll get some money from the online services that use our music, and it is essential that they promote it and contribute to the financing of this. It's very important. It's the same with the Copyright Act; it's very important that we deal with that very urgently, just after the Broadcasting Act.

[Patrick Rogers]

Parliamentary Secretary, I would just add to that. When we have talked previously about the Copyright Act, we've tried to make clear how important the functioning framework of it is: that in case anything were to happen to a particular artist, they would continue to get paid when their music is played. Now it has happened to all artists, and their ability to tour has been eliminated. The need to make sure that principle is upheld is now as clear to us as it has ever been.

[The Chair, Liberal, Scott Simms]

Okay, folks. I have to hold it to that. That has to be the final word for this panel.

I thank all of you for your contributions. That was a great conversation as it unfolded over Zoom.

I would like to thank our witnesses for coming today.

Madam Drouin, thank you very much.

From Drayton Entertainment, Alex Mustakas, artistic director, thank you so much.

Patrick Rogers, our list here says “vice-president”, but you said “co-CEO”. I'm assuming that congratulations on your promotion...?

[Patrick Rogers]

It's interim co-CEO, but thank you so much.

[The Chair, Liberal, Scott Simms]

Thank you very much, all of you. We'll suspend for a few minutes for technical reasons.

[The Chair, Liberal, Scott Simms]

Welcome back, everyone, to the second part of our committee.

I'll get right to the introduction of our witnesses. They are Yvan Noé Girouard, director general of the Association des médias écrits communautaires du Québec; from News Media Canada, John Hinds, president and chief executive officer; and, from the Rosebud Centre of the Arts, two guests, Paul Muir, education director, and Bob Davis, volunteer board governor and general manager of the Old Trout Puppet Workshop. Well, how about that? Love the name.

We're going to start with five minutes from each group.

We're going to start with the Association des médias écrits, with Monsieur Girouard.

The floor is yours for five minutes.

[Yvan Noé Girouard, Director general, Association des médias écrits communautaires du Québec]

I would like to thank the members of the Standing Committee on Canadian Heritage for giving me the opportunity to express my views on the shortcomings of certain federal assistance programs for community media.

First of all, I would like to introduce the Association des médias écrits communautaires du Québec.

AMECQ was founded in 1980. It represents 80 newspapers and magazines that are non-profit organizations administered by a volunteer board of directors. These newspapers and magazines represent the local population taking charge of local information. They are generally produced by a majority of volunteers.

I want to make it clear that the word “community” does not have the same meaning in English as it does in French. In English, “community newspaper” refers to a newspaper, usually private, that serves a community. There is no distinction between non-profit and private newspapers. In French, the term "communautaire" means non-profit organizations. This creates confusion in the presentation of assistance programs to the media.

I would like to touch on four specific issues: the Local Journalism Initiative; the Community Media Strategic Support Fund, which supports official language minority community media; the media tax credit; and advertising for community print media.

First, let’s talk about the Local Journalism Initiative.

While commendable at first glance, this initiative put forward by Canadian Heritage and administered by News Media Canada is not appropriate for Quebec community print media. The Association des médias écrits communautaires du Québec deplores the fact that this program is in no way intended for its member newspapers and magazines.

On its website, News Media Canada promotes the Local Journalism Initiative in these terms:

In some parts of Canada, residents do not have access to journalism about community issues and institutions through local newspapers, community radio, television or other news media. These gaps in coverage mean that citizens do not have necessary information about news, issues and events that affect them and their day-to-day lives.

AMECQ mainly deplores the fact that this program is only intended for media covering a region described as a news desert or as an area of news poverty. Therefore, not all of our members are eligible for this program.

The Local Journalism Initiative says it provides funding to news media to hire journalists to cover civic institutions and issues of importance in underserved communities. This is what it says on the News Media Canada website:

The Local Journalism Initiative supports the creation of original civic journalism that is relevant to the diverse needs of underserved communities across Canada...

Among other things, a media outlet applying for a grant is required to describe how the area it wishes to cover constitutes a news desert or an area of news poverty, and to explain why its publication is qualified to fill this void.

AMECQ is therefore asking that this program be revised so that community print media in Quebec can have access to it and that concepts such as “underserved community”, “news desert” or “news poverty” be abolished.

I would like to bring to your attention the simplicity of a response provided by email to one of our members whose request was turned down. They told him that a new appeal had indeed been launched in Quebec, that the Local Journalism Initiative was being publicized as widely as possible and that this was the reason why this member had received the flyer. They told him that if he wished to re-apply, they would be happy to do it for him, but like him, they honestly did not see how the end result would be any different.

AMECQ also regrets that a new invitation to take part in this program was sent to its members on the evening of January 24, 2020, when the deadline for registration was January 27. Did they invite them in order to clear their conscience? If News Media Canada wanted our members not to register, they couldn’t have done better.

I would now like to say a few words about the Community Media Strategic Support Fund, which supports official language minority community media.

Although commendable as well, this program is in no way accessible to our newspapers and magazines. Yet, even if they publish in French in a province where the official language is French, these media would need financial assistance from the federal government.

Now I'm going to talk to you about the media tax credit.

On April 17, the Department of Finance announced in a press release measures to support Canada's information sectors during the COVID-19 pandemic. These measures include a 25% refundable Canadian journalism labour tax credit.

Again, this initiative is commendable, but difficult to apply to community print media. Indeed, to be eligible for the tax credit, a newspaper must employ at least two journalists working an average of at least 26 hours per week for at least 40 consecutive weeks, and they must devote at least 75% of their time to producing news content.

Most community newspapers wishing to take advantage of the tax credit have only one employee who combines the duties of reporter, photographer, editor and coordinator, or even general manager. Newspapers—

[The Chair, Liberal, Scott Simms]

Excuse me, Mr. Girouard, but your five minutes are up.

[Yvan Noé Girouard]

Okay.

[The Chair, Liberal, Scott Simms]

Thank you.

Next we'll go to News Media Canada with John Hinds, president and chief executive officer.

[John Hinds, President and Chief Executive Officer, News Media Canada]

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.

[The Chair, Liberal, Scott Simms]

Thank you.

We'll now go to the Rosebud Centre of the Arts.

Mr. Davis, please proceed. You have five minutes.

[Bob Davis, General Manager, Old Trout Puppet Workshop, Volunteer Board Governor, Rosebud Centre of the Arts]

Thank you, Mr. Chair and committee members, for the invitation to attend, and specifically Mr. Shields, who invited us here today.

We're happy to be here. Rosebud Centre of the Arts is located in a small hamlet of just 92 people, northeast of Calgary on the way to Drumheller. It's home to Rosebud School of the Arts, a post-secondary arts training institution and Rosebud Theatre, a professional live theatre. We have additional dining services for patrons who attend our theatre performances to enjoy a meal before attending the show.

Our scope of operations in a typical year involves around $3.5 million, and of that $3.5 million, roughly $2.5 million would come from theatre revenue through ticket sales and dining services.

Our professional productions run from March to December. We have as many as five in a year, along with two student productions, and we attract up to 35,000 or sometimes 40,000 people to our hamlet of 100 people. They are predominantly from the Calgary area, but people from all regions of Alberta do travel to our community. We also have accommodations, gift shops, a museum, galleries and resident artists.

We have a staff of about 20 people, but we employ up to 150 people part-time, again predominantly residents from the region.

We're the largest employer in Rosebud and one of the largest in Wheatland County. We're a socio-economic driver in the area. The work we do generates business for businesses and employers around us. We're part of the provincial arts and education tourism fabric, partnering with Travel Alberta, other post-secondary institutions and other arts organizations in Alberta.

Uniquely, we're a guild school. We follow a mentorship and apprentice educational model, which is unique in Canada. We receive no provincial funding for our education, and our public funding for the arts is less than 2% on an annual basis.

Bearing all of this in mind, you can understand how COVID really hit us hard, as it did, I'm sure, for many other arts organizations that you've heard from. Our theatre operations were closed entirely in 2020. We were attempting to run another show here for Christmas, but just today that show too was suspended due to COVID conditions in Alberta.

We're experiencing an over $2-million loss in revenue from ticket sales. More specifically, we're experiencing over 30,000 patrons not coming to our community. That has ripple effects outwards on other businesses and entrepreneurs in our region in terms of the accommodations, the retail sector and all the employment that goes along with the work that we do.

We are thankful for the CEWS program, which did support our operations to a degree this year, and I'll have more to say about that in a moment. However, by and large, we have been unable to access the emergency funding or regular funding that's been made available through the Canada Council for the Arts or Canadian Heritage.

In particular, one of the biggest challenges for arts organizations has been the administration side of things to manage through COVID. Certainly on the arts side, there's been less work for artists, but on the administration side, the amount of work has been greatly increased in terms of budgeting, managing human resources and dealing with communications and stakeholders.

One of the gaps in the federal aid programs is that unless you are already registered with the Canada Council for the Arts and recognized, you do not have access to the emergency funding provided by Canadian Heritage, and the CEWS program is insufficient to support arts organizations when there is no corresponding revenue coming in to help offset costs.

We look forward to discussing more of these issues with you.

Thank you very much, Mr. Chair.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Davis.

We're now going to proceed with the questions. Folks, I'm going to be a little bit more strict on this because of the time we lost at the top.

Let's get started with Mr. Waugh for six minutes.

Go ahead, please.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you, Mr. Chair.

Thanks to our guests today.

Mr Hinds, it's good to see you again.

The government announced $30 million spread out over newspapers, radio and television. How much did the newspapers get out of that $30 million that the government claimed that it sent out?

[John Hinds]

I don't have a direct number on it. I think it was in the neighbourhood of $2 million to $3 million. For most newspapers, it was one or two ads in the course of the campaign.