Thank you, Madam Chair.
Honourable members of the Standing Committee on Canadian Heritage, thank you for this opportunity to speak to you today.
My name is Caroline Jamet. I'm the president of Cogeco Media. We manage a network of 21 radio stations across Quebec and eastern Ontario, reaching nearly 4.5 million listeners every week.
French‑language commercial radio plays a key role in our society and democracy. Its role goes far beyond simply broadcasting news, current affairs and entertainment content. It also helps connect people with political, economic, social and cultural players. Radio brings our communities to life by nurturing their public spaces. For over 40 years, Cogeco Media stations have contributed to the free flow of ideas and information and helped shape the identity of the communities where they operate. We proudly invest in the production and distribution of information that affects local people. We're often the only bastion against the creation of media deserts.
Unfortunately, this role in promoting local content continues to decline as the Canadian media landscape undergoes major upheaval. The increasingly dominant foreign giants have transformed Canadians' consumption habits and diverted the advertising market outside our borders. To preserve our local voices, the government must act now. Furthermore, our industry's regulatory framework was established decades ago. This framework is excessive and largely out of step with today's reality. Not only are digital giants exempt from regulatory constraints, but they also benefit from tax advantages. Approximately 70% of advertising investments in Canada are currently captured by foreign platforms. In contrast, Canadian media outlets that produce local content account for barely 30% of this market, with radio claiming a meagre 4%.
If nothing is done, the news poverty will spread and more media deserts will emerge, particularly outside major urban centres. Urgent action is needed to ensure that our private radio stations can continue to serve our communities. Remember that, since 2008, over 600 Canadian media outlets have closed their doors. In this era of misinformation, now more than ever we need the journalistic content and local news provided by our radio stations. A recent SOM poll of Quebeckers showed that 90% of respondents felt that media outlets, including private radio stations, play a vital role in democracy, and 85% believe that private radio stations provide credible news.
In 2019, the government introduced the Canadian journalism labour tax credit. However, radio stations, which also produce essential and quality journalism, aren't eligible for the credit.
As a democratic society, we need strong Canadian private media outlets to continue to play their role for local people. Meta or FOX News won't be heading to Saint‑Jérôme to inform people about the impact of a new factory opening in their town, or to Saguenay to let residents know about the closure of their hospital's emergency room.
Canadian radio stations fund all their own content, without support; invest in local information; and adhere to strict regulations. Foreign platforms capture Canadian advertising revenue but aren't subject to equivalent obligations regarding content or contributions.
We're asking the government and the Canadian Radio‑television and Telecommunications Commission, or CRTC, to step in and to acknowledge the seriousness of the structural disruptions affecting the radio industry. To do so, the federal government must pursue its national preference approach and take action in five areas.
First, the Income Tax Act contains a loophole in section 19. This loophole allows Canadian advertisers to deduct their advertising expenses when they purchase advertising on platforms such as Facebook. This makes no sense in light of the challenges facing Canadian media outlets. Section 19 must be extended to foreign online companies in order to eliminate this competitive advantage for digital giants.
Second, we're calling for the creation of a 20% tax credit for local advertising purchases.
Third, the federal government must lead by example and prioritize the purchase of advertising space in Canadian media. The public overwhelmingly supports a policy that prioritizes the purchase of advertising space in local media. According to SOM, this type of policy has the backing of 87% of French‑speaking Quebeckers.
Fourth, we're calling for the inclusion of the radio industry in the Canadian journalism labour tax credit. This would bring us in line with the model introduced by the Quebec government in its most recent budget. This injustice to the radio industry must end now.
Fifth, the CRTC must reduce any regulatory burden on our industry, especially since foreign platforms have no such obligations.
These measures aren't about protecting a business model of the past. They're about preserving Canadians' ability to receive information from local sources.
Thank you for your attention.