Thank you.
Good morning, everyone.
My name is Kevin Desjardins and I'm president of the Canadian Association of Broadcasters, or CAB. We represent commercial broadcasters nationwide, including radio, television and specialty services. We have 77 owner groups, with a total of 797 stations and services across the country.
You've had the opportunity to hear from several CAB members during your study, and two of them are here today. In those presentations, you heard them say several times that journalism is a critical part of the work they do to serve their communities. However, they also need support so they can continue to provide this fundamental democratic service.
Commercial radio and television broadcasters remain a cornerstone of Canada's news ecosystem. Our members provide trusted professional journalism to millions of Canadians on radio and television stations across the country, as well as through their online services and news portals. Broadcasters are relied upon by Canadians as their primary and most-trusted source for news in communities of all sizes and in all regions.
Private broadcasters also spend more than $680 million in news programming, the vast majority of which is invested in journalists in newsrooms and reporting in their communities. That's significantly more than any other players across the news sector, including the CBC.
The challenge for Canada's broadcast newsrooms is not one of reach, relevance, trust or value. The largest challenge in supporting newsrooms in Canada is the fact that two of the most important market-based supports for journalism have been undermined by foreign online giants. On the advertising side, we see that 75% of Canadian ad dollars are now flowing to foreign digital platforms. That's $11.2 billion Canadian leaving our economy every year.
On the subscription side, cord cutting of Canadian cable and satellite services in favour of foreign online streaming giants means that a further $5 billion Canadian is leaving our domestic media sector. The foreign streamers themselves estimate that this figure will hit $10 billion in the near future.
What we effectively have is a trade deficit in our media industry, and the first places to feel the squeeze are Canada's newsrooms. All news producers face declining advertising revenues, disruption from global media behemoths and rising production costs. Moreover, while the challenges faced by news producers—whether print, digital-first or broadcast media—are the same, existing direct funding mechanisms largely exclude commercial broadcasters.
This is why the CAB recommends the three following measures be undertaken to help keep journalists in newsrooms across Canada: First, provide emergency support to local independent television stations; second, extend the Canadian journalism labour tax credit to broadcasters; and third, devote 70% of the government's ad budget to Canadian media companies.
On the first item, you have heard from several recipients of the independent local news fund on the immediate issue they face, as an appeal by global streamers has delayed the flow of new money into this important fund. It should be underlined that the core of the streamers' argument to the Federal Court of Appeal is that they don't do news, so they shouldn't have to support it. While this shortfall in funds may be a temporary issue, the consequences of delays could be permanent, with newsroom cuts and more stations closing.
Second, we think it is a matter of basic fairness that the Government of Canada rethink the journalism labour tax credit. Its current application exclusively to print media fails to recognize the reality of news media in Canada. Whatever their origins as an outlet, many print media typically also provide audio and video content now, and broadcasters create text-based news content through their websites and portals.
Third, it is vital that policies with respect to government advertising be addressed. The Government of Canada continues to disproportionately place the bulk of its advertising on digital platforms—two-thirds of the government's ad spend—with the majority of that going to foreign-owned platforms.
Dedicating 70% of the Government of Canada's advertising revenues to our domestic radio, TV, print and Canadian-owned digital media will not only help to reverse this trend but will also benefit the government by positioning its messages alongside trusted sources of national and local news.
Finally, Canada must reject any attempt to treat our media sovereignty as a bargaining chip in the ongoing review of CUSMA. The Online Streaming Act does not fit any good-faith definition of a non-tariff trade barrier. As I've already mentioned, foreign platforms have abundant access to the Canadian market. In fact, foreign-owned digital media platforms continue to enjoy an easier path to accessing the Canadian market than regulated Canadian broadcasters.
Thank you for your time. I look forward to your questions.