Canadian Heritage Committee on Oct. 18th, 2022

[Brian Myles]

I am going to add to what Mr. Jamison said earlier. I belong to the school of thought that wants a bundle of measures to support the news media. We didn't say it, but we believe that all of the federal programs contained in the Budget Impementation Act, 2019, No. 1, should be retained, even if Bill C‑18 were passed.

The model applied under Bill C‑18, referred to as the Australian model, compensates the news media based on digital coverage or number of journalists in a newsroom. Ultimately, it is difficult to support and accept for small weekly papers, for small publications and for emerging players, which do not have a big market position or broad digital coverage and which have small newsrooms. Those media may be disappointed with Bill C‑18.

That is why we have to reform the Local Journalism Initiative, or LJI. I have been on the jury, and we did our best based on our knowledge and the parameters we had. By force of circumstances, the program benefited a number of companies that were national players and were very well established in their market. To be completely transparent, I have to say that Le Devoir has been able to fund positions using the LJI. I believe this program could be reformed to ensure that it places greater priority on small players and on emerging players. The question of the number of paid jobs in a newsroom should also be reviewed. The LJI could help to encourage more innovation and the growth of publications in fragile markets. I think we could produce a better LJI that was targeted to the needs of local communities.

[The Vice-Chair, Bloc, Martin Champoux]

Bill C‑18 is therefore not a cure-all for journalism, but there are still measures that we should keep in place for media that are more vulnerable at the present time.

[Brian Myles]

The bundle of measures and diversity of revenue are key to the future for the news media.

[The Vice-Chair, Bloc, Martin Champoux]

I have a question for Kevin Desjardins from the Canadian Association of Broadcasters.

If Bill C‑18 were passed, what would that mean for CAB members? If it were not passed, what would the consequences be for them?

[Kevin Desjardins]

The positive consequences would include keeping newsrooms open across Canada, whether they are large, medium-sized or small broadcasters, or even hiring journalists in those newsrooms.

If the bill were not passed, those newsrooms would have even more difficulties. As has been said several times today, newsrooms are going through a crisis right now. That is why it is important to us that Bill C‑18 be passed.

[The Vice-Chair, Bloc, Martin Champoux]

Thank you, Mr. Desjardins.

We will now start the second round of questions. To begin, the Conservative Party will have five minutes.

Mr. Waugh, the floor is yours.

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

Thank you, Chair.

I've watched the last couple of years major organizations like Torstar buy small and medium companies, and then close them a year later—side deals—so they take their competitors out just like that. We've seen it in the Maritimes, and we've seen it here in Ontario. We've seen it all over this country. The big get bigger. They buy small and medium newspapers and then six to eight months down the road they close them.

It's interesting, Mr. Julian, that you talk about.... In our party, we represent everybody and that's why we're concerned with Bill C-18. Steve Nixon was here, from the Saskatchewan Weekly Newspapers Association. Probably half of my small newspapers in Saskatchewan don't qualify for Bill C-18. They will go under. I don't have to tell you that one of the newspapers sold for a dollar in my province recently. There is no value in small and medium newspapers in Saskatchewan, so how is Bill C-18...?

I'll ask the Alberta Weekly Newspapers Association this, because in your province there's a split. You may want Bill C-18, but I look at other owners in your province who wouldn't be eligible for any of this money, so how do you speak on behalf of everyone in the province of Alberta with Bill C-18?

Mr. Jamison or Mr. Merrell, go ahead.

[Dennis Merrell, Executive Director, Alberta Weekly Newspapers Association]

I can take this.

I'm Dennis Merrell. I'm the executive director of the Alberta Weekly Newspapers Association.

It's true that we have a mix of small community newspapers and some larger ones that do qualify for the QCJO designation and would be able to participate in bargaining with Google and Facebook. We actually have a number of even smaller independents that could qualify, but they haven't yet applied. It's probably, as you suggest, Mr. Waugh, about a fifty-fifty in our province. About 50% are probably able to participate, and the other half are not able to. It does put us in a bit of an awkward spot for sure.

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

It should, because it does in my province. It would be higher. It could even be 80% to 20% against Bill C-18, because they don't have two people on staff right now.

I want to go to Le Devoir.

Mr. Myles, you've already made the agreements with MSN, Apple TV+, Meta and Google. How much did you reap out of those, since you have said you've been profitable for the last six years? With Bill C-18, as you know, it's all in secret. Can you please supply some numbers, since you've already had the agreements with Meta and Google? Give the committee, if you don't mind, some numbers that we can chew on. What did you get from Google and Meta to supply your organization with a profit?

[Brian Myles]

I perfectly understand the question, but I'm not allowed to give an answer regarding the amounts. Those were two private corporations that made confidential deals.

However, I can state that Le Devoir was profitable before those deals, and that the secret of our success relies on a strategy to diversify our revenues. We don't rely on a single source. This is why I stress the emergency or the need for the media industry to think at a higher level that only Bill C-18.... Think about your business model, and think about the whole stream of revenues that you can gather from your audience. So—

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

I will interject, because I'm short on time.

We're hearing from the PBO that there's $329 million thanks to Google and Meta. Here you are, in front of the committee, not telling us what your deal is. It's all in secret.

You're one of the biggest newspapers, if not the biggest, in Quebec. How are we going to save the middle and lower-class newspapers in this country? We don't have an idea what you got, what the medium ones get, and what the small ones should be asking for. The $329 million goes pretty quickly, if you don't mind my saying so.

[Brian Myles]

I will willingly give the amounts if there's a law in place. If we're obliged to do so, I will inform the CRTC of the amounts; however, I cannot do it now.

As far as the sense of fairness is concerned, I guess you can boost the LJI. You can ask the provincial governments to do their part. In Quebec, there's a 35% tax deduction that adds up to the federal one. It's the only province that did so. I believe the provinces have a bigger role to play. You can cap the amounts that are available for media. If you use, for example, 30% of the labour costs in a newsroom, you can actually make that threshold a bit higher for small players, and you can lower it for bigger ones.

[The Vice-Chair, Bloc, Martin Champoux]

Thank you, Mr. Myles. I have to interrupt you, because we have already gone several seconds past the time allowed. You may have an opportunity to give more details when you answer a question from another member.

It is now the Liberal Party's turn.

Mr. Coteau, the floor is yours for five minutes.

[Michael Coteau, Liberal, Don Valley East, ON]

Thank you, Mr. Chair.

I want to start by confirming the numbers that Mr. Scott gave us.

Mr. Scott, you said that over the last 15 years we've gotten to a point where an equivalent of $5 billion a year is leaving Canada because of the change in the system; 450 news businesses have shut their doors, and half of the reporter jobs have been eliminated. Is that correct?

[Dr. Ben Scott]

Those are numbers from the Department of Canadian Heritage.

[Michael Coteau, Liberal, Don Valley East, ON]

Those are incredible numbers.

I'll go over to Mr. McKay.

Mr. McKay, as the largest company in the room, and probably in the country, how do those numbers...? As a Canadian, reflect on Google and its position or outlook on the industry as a whole. When you hear those numbers, how do you react to that?

[Colin McKay]

The numbers you've cited are a signal of the crisis that's overtaking the industry and has been for several years. That includes some concern about advertising, but as mentioned by other members of the committee, it also concerns the restructuring of the business in Canada.

What I'm here to communicate to you and to the committee is that we've been in Canada for 20 years. We've been working with journalism organizations across the country—small, medium and large—for many years to try to help them make the transition and to try to help them both identify and exploit the opportunities not only in becoming an online presence, but in figuring out new revenue models, like Mr. Myles has been identifying and Mr. Jamison cited.

That is our approach to working with the industry today, and it will continue to be. We want to make sure that as there are shifts in one part of the industry, smaller and medium-sized organizations identify and then exploit the opportunities to grow their readership, to grow their impact and to find new audiences.

[Michael Coteau, Liberal, Don Valley East, ON]

Would you agree that Google has played a role in that transformation, both in a positive way—because obviously Google is an innovative company that has changed the world—but also in these numbers that Heritage has provided?

[Colin McKay]

I'd like to take a step back from the numbers that the department has provided and speak to the concept of value exchange. As Mr. Myles has been hinting at—

[Michael Coteau, Liberal, Don Valley East, ON]

I'm going to keep asking questions, if you don't mind.

With those changes that have occurred in the last 15 years in Canada, we know that Google's response is to create these relationships with these media companies. You talked a lot about transparency. You talked a lot about fairness. You said that larger companies and smaller companies under the bill were not equal.

I wanted to talk to you about the deals that you have with publishers already. How many deals do you have with publishers in Canada so far?

[Colin McKay]

We have deals that cover 150 publishers, 90% of which represent small, local or regional communities.

[Michael Coteau, Liberal, Don Valley East, ON]

What is the value of those 150 publishers? Is there a number out there?

[Colin McKay]

There is not a number that I can disclose.

[Michael Coteau, Liberal, Don Valley East, ON]

There is a number, though.

[Colin McKay]

There are a number of commercial agreements that would have a total number, but I'm not—