Evidence of meeting #26 for Finance in the 43rd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sector.
A recording is available from Parliament.
Liberal
The Chair Liberal Wayne Easter
Thank you for that one.
You might want to look, in the fishing sector, at the advance payments program that is in place in the agriculture sector. There's a very good program that really is a marketing tool, whereby money is put out interest-free until the product goes to market.
We're going to Mr. Mel Arnold.
Conservative
Mel Arnold Conservative North Okanagan—Shuswap, BC
Thank you, Mr. Chair.
I had multiple questions, but I will have to narrow it down to one. I also wanted to ask about the effect of the extra storage on next year's prices and about the effect of the right whales being spotted in the gulf and how that may impact on and shorten seasons that have already been shortened on the early opening end of it, but I'll direct my question to Mr. Jollimore, and perhaps Mr. LeBlanc, about the way that seasons have been opened.
The early seasons in the south were open on time as usual and the access to markets was there, with the best access and probably the best price. How has that impacted harvesters in the gulf and those that still have their seasons delayed until mid-May now?
Vice-President, Prince Edward Island Fishermen's Association
Well, one of the issues that we're going to face by delaying three seasons to open simultaneously on the 15th is that it's a Friday, and people will go back out and fish that afternoon and Saturday as well, so there's going to be a lot of lobsters hitting the market at the same time.
Before this pandemic reached our shores, area 33 set in November, and they have continued to fish despite calls from the Nova Scotia processors to maybe pause the season. The PEIFA feels that it's important that maybe that area could close down on the 15th when we do set, to give us a little bit of an advantage toward that market that they've been able to capitalize on since pre-COVID. It stands to affect us greatly with the delay and having everybody start at the same time.
President, Gulf Nova Scotia Fishermen's Coalition
I think I might give a different version, a different take. Our association did actually ask for the delay for two factors. One was that because the COVID was increasing we were very nervous about putting more pressure on our health care by having more people out in public. We were quite worried about that. Secondly, the market was telling us that there were issues with sales at that time.
Since then, as Mr. Jollimore mentioned, the price went berserk down south. Before that, we were told that it was going to go down. That caused pressure, with my members asking, “What are we doing tied up when the price is going up?” But then, we're also being told that from the 15th on we can expect a major dive in the price because of the glut and also the lobsters being caught so far. It's being received in a mixed way by my members, but I think we have the 15th to deal with and we need to move on and make the best of it.
Liberal
Annie Koutrakis Liberal Vimy, QC
Thank you, Mr. Chair.
My question is for all the witnesses who wish to answer it.
If there is a surplus of seafood products not being exported or sold in Canada this year, what is the industry's plan? For example, does the industry intend to participate in programs such as the surplus food purchase program, announced on May 5 by the Prime Minister, with an initial funding of $50 million?
Vice-President, Prince Edward Island Fishermen's Association
I think we're going to feed the finance committee.
Liberal
The Chair Liberal Wayne Easter
Do you you think so, Mitch? The finance committee can't handle that much lobster.
Does anybody else want in?
Executive Director, Lobster Council of Canada
I'll jump in.
In the industry, most of the sellers are private companies and they will probably try to keep the product into next year. I don't know; it depends on how much is produced. There are so many variables. There are 115 different things that can happen and we just don't know what that's going to be.
Liberal
The Chair Liberal Wayne Easter
To your point, Mr. Irvine, and you have mentioned it before, there was some discussion of a domestic marketing program with Agriculture and Agri-Food Canada prior to COVID. It's more important now than it was then, so somebody needs to be moving on that.
There's certainly a theme running through each and every one of the presentations today, everything from EI for captain and crews through to hopefully next season, to the adaptation of access to the CEBA so people are able to get the wage subsidy.
We keep hearing, even on the government side, about a package for harvesters. What is the critical timeline for a harvester package to be put in place? You're hitting the water on the 15th. Is it something like 40,000 boats that hit the water that day? What is the critical timeline for that package to be there and available?
President, Gulf Nova Scotia Fishermen's Coalition
My answer will be short: It's yesterday. We needed that before now, because some people might have avoided going fishing and would have avoided major expenses.
Executive Director, Maritime Fishermen's Union
I was about to say exactly the same thing as Leonard. I think a few weeks ago would have been nice because many fishermen have had to make some very difficult choices already, like hiring some deckhands or not. On the health and safety side, there's also the question of whether to go fishing or not.
Many of our fishermen are over 60 or 65, and some of the deckhands also, so in some areas there is a clear and present risk of this pandemic affecting some of our members and their crews.
Vice-President, Prince Edward Island Fishermen's Association
Thank you.
The reality is that there are members who have concerns with the health issues surrounding us right now. If this is an adequate package, there may be people who decide not to fish. That in turn will help some of the issues with the stranded lobster. We need to know this.
I know the past is behind us, but this needs to come out very soon, in the next day or two. I would be very surprised if you haven't already had discussions on preliminary stuff, but you guys really need to use what was presented today and come up with something. We need to get it out to harvesters so they can make their decisions.
Liberal
The Chair Liberal Wayne Easter
Yes, there have been preliminary discussions, but the package needs to get out there, whatever it may be.
On behalf of all the members of the committee, I want to thank each and every one of the witnesses for taking the time. I think there were very thoughtful presentations and very thoughtful answers to our questions. We're of the hope that a package could be announced forthwith, each and every one of us.
We have another panel following this, so we will suspend this meeting.
Liberal
The Chair Liberal Wayne Easter
We'll call this meeting to order, which is panel 22 of meeting number 26 of the House of Commons Standing Committee on Finance. We're operating pursuant to an order of reference of Tuesday, March 24. The committee is meeting on the government's response to the COVID-19 pandemic.
Today's meeting is taking place by video conference, and the proceedings will be made available via the House of Commons website. We won't go through any more preliminaries.
We have a selection of eight witnesses on this panel, so I would hope that people can keep it to five minutes. It gives us more time for questions and to draw out the concerns and potential solutions.
Thank you to the witnesses for coming.
We'll start with the Association of Canadian Publishers, Kate Edwards, executive director.
Ms. Edwards, the floor is yours.
Kate Edwards Executive Director, Association of Canadian Publishers
Thank you, Mr. Chair, and thank you for the invitation to present to you today.
The Association of Canadian Publishers, ACP, represents 115 Canadian-owned, English-language book publishers. Along with our francophone counterparts, we are responsible for 80% of the new books written by Canadian authors each year and contribute to a $1.6-billion industry.
We are creative partners in the development of books of all genres and are active exporters. Publishers are at the centre of the book supply chain and have direct business relationships with authors, illustrators, printers, distributors, bookstores, libraries and the education sector.
The continued relevance of books for information, education and escape has come into sharp focus over the last two months. Teachers are reading books online to their students, recreating classroom storytime. Festivals and reading series have put their programming online, matching authors with readers across Canada and around the world. Demand for e-books and audiobooks through public libraries has skyrocketed, and independent bookstores have quickly changed the way they serve their customers, offering curbside pickup and home delivery.
Despite continued demand for books, our industry has been hit hard by COVID-19. Some printers have temporarily closed, publication dates have been postponed and in-person promotional events have evaporated. Literary festivals and trade events are cancelled or tentative. Export travel is suspended indefinitely. Wholesalers and retailers are returning books and delaying payment.
For the seven-week period ending May 3, sales through physical bookstores are down 63% year over year. Overall, the market is down 39% in both dollars and unit sales compared to the same period last year, a decline of $45 million. When we look further out, 40% of publishers anticipate losses of 50% or more over the course of 2020.
In addition to plummeting sales revenue, demands from the education and library sectors for relaxed copyright provisions and free digital content have grown more intense. Publishers have responded to these requests with flexibility and generosity, but are proceeding with caution and concern for the long-term sustainability of their businesses. Publishers' intellectual property is their key asset, and current demand for their books demonstrates its value. The ability to monetize this IP will be essential to our recovery.
For publishers, the impact of the crisis will extend beyond this spring. Credit is already stretched and future financing is uncertain. Publishers' ability to pay off royalties, printers and wages may be compromised.
The Canada book fund and the Canada Council for the Arts have accelerated this year's grant payments in response to the crisis. This is greatly appreciated, but it is a stopgap measure and does not represent new or emergency investment.
Prior to the crisis, it was widely acknowledged by industry and government, including by this committee, that the Canada book fund is under-resourced. Early grant disbursements will relieve some short-term pressure, but lower sales, higher returns and slower collections mean that cash flow challenges will persist. Those publishers ineligible for these programs have even less capacity to respond to this unprecedented crisis.
ACP commends the government for its quick and direct response through universal programs. Though some publishers' short-term needs will be addressed by the emergency measures that have been announced, our sector is not universally served by programs like the Canada emergency wage subsidy and Canada emergency business account. Many book publishers use staffing models that rely on contract and freelance staff rather than full-time employees and are not covered by the wage subsidy. Others are owner-operated and publishers do not draw a salary or meet the minimum payroll to apply for these benefits. As public sector entities, university and museum presses are not eligible for these programs but are experiencing the same decline in sales as other publishers.
We are encouraged by last month's announcement of $500 million in emergency support for arts, culture and sports organizations, and eagerly await further details of this investment, hoping it will fill some of these gaps.
As the industry shifts from an immediate crisis response to planning for stabilization and recovery, a strategic combination of financial support and policy tools is needed to ensure Canadian publishing infrastructure remains intact to continue to serve Canadian readers. With that in mind, ACP makes the following recommendations:
Provide an emergency supplement to this year's Canada book fund grants to respond directly to the COVID-19 crisis.
Introduce a broad and flexible benefit similar to the wage subsidy for those whose staffing models, company structure or revenue patterns make them ineligible for the universal benefit.
Provide an immediate increase to the permanent budget of the Canada book fund, as recommended by this committee in 2016.
Finally, implement ACP's long-standing recommendations for copyright reform, put forward during the 2018 review of the Copyright Act.
Thank you for your time and for your efforts in responding to the COVID-19 crisis.
I look forward to the discussion and your questions.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Ms. Edwards.
We're turning to Commissioner Ambrosie from the Canadian Football League.
The floor is yours.
Randy Ambrosie Commissioner, Canadian Football League
Thank you to the committee for your invitation, to all MPs for their leadership and to our essential workers for their courage. I have never had more sleepless nights, and I have never been prouder to be Canadian. I'd also like to acknowledge my fellow panellists. They all work to make Canada a better place.
I appear here on behalf of the Canadian Football League and the Grey Cup, which has been a source of Canadian unity and celebration since 1909. The CFL is a valuable and integral part of Canadian life, and its future is very much in jeopardy. It would be terribly sad if this pandemic were allowed to take it away.
Ours is a big brand, but not a wealthy business. Collectively, our teams lose between $10 million and $20 million a season. We survive because of the passion of our fans, the dedication of the volunteers who guide our community-held clubs and the civic philanthropy of the people who own and subsidize our privately held teams.
Our players are world-class athletes and first-class people. Their devotion to charity and community is second to none, but the salary of NBA superstar Steph Curry is equal to the salaries of all our players combined.
Our product is football, but what we really do is bring Canadians together. Two million Canadians buy tickets to our games each year. When our players go into the community to talk about violence against women, or bullying, or food banks, they draw a crowd.
Bringing people together makes us great, but in a pandemic it makes us vulnerable, because the first thing to go and the last thing to come back is large gatherings, and large gatherings are the lifeblood of the CFL. Unlike large U.S.-based leagues, our biggest source of revenue is not TV. It's ticket sales.
For reasons of public health that we totally support, governments coping with COVID-19 have made it impossible for us to do what we do. Our best-case scenario for this year is a drastically truncated season, and our most likely scenario is no season at all.
We are currently operating on the money that our fans and, to a lesser extent, the broadcasters and sponsors pay us in advance for games. The day is fast approaching when we will have to cancel several games and perhaps the season, and then our fans and partners will have every right to demand their money back. At that moment, our financial crisis will become very real and very big.
The spirit and substance of our ask to the federal government has been obscured somewhat by the power of a headline, something that I'm sure all of you in public life are very familiar with. We have told the federal government that we need $30 million in working capital this summer to keep operating and to keep as many people as possible employed.
It is very challenging to be precise on what additional help we might need, because COVID-19 has literally created a world of uncertainty. Will we have games this fall or no season? What about 2021? Can we pack our stadiums then or not ?
One of our most famous Grey Cup games was called the Fog Bowl because the players couldn't make out what was in front of them. A friend of mine says that we're all operating in a fog bowl right now.
We did our best to consider what might be ahead of us, and we estimated that we could need as much as an additional $120 million over the next two years if the most negative scenarios—all of them—come true.
But here is our bottom line. We want the support we need to get through this crisis and not a dime more. We support the decisions governments have made, but their effect on our business is devastating. We just don't want it to be fatal.
A ban on large gatherings means no revenue and no business for us, and we want to ensure it does not mean no CFL for the future. We want to earn this money and pay taxpayers back by delivering real value through a partnership with government.
We can share our in-stadium, online and broadcast assets so government can deliver important information, and we can build on our track record of service to the community. For example, we could expand the award-winning Be More Than a Bystander program we deliver with the Ending Violence Association of B.C. and train boys and men across the country about consent and respect for women.
I don't mind telling you that this is humbling, but the fact is, we need your support so we can be there for all the community groups that depend on us, so we can continue to deliver $1.2 billion in economic activity each year, and so the CFL can continue to be one of those things that connects us as Canadians—something uniquely ours.
Whenever it comes, we want our next Grey Cup, Canada's 108th, to be the place where we can all celebrate what we did to get through this and that Canada is back.
I thank you very much.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Commissioner.
We are turning now to Corus Entertainment Inc.'s Troy Reeb, executive vice-president.
Go ahead.
Troy Reeb Executive Vice-President, Broadcast Networks, Corus Entertainment Inc.
Thank you, Chairman Easter. I will say, just off the top, that as a local broadcast partner with the CFL in several markets, we have strong sympathy for and a strong understanding of what the league is going through.
Good evening, committee members. My name is Troy Reeb. I serve as executive vice-president, broadcast networks, at Corus Entertainment. On behalf of our company, and our 3,500 employees across Canada, I want to start by thanking this committee, your parliamentary colleagues in the House and Senate, and all federal public servants for the tireless work you are doing to protect Canadians and support our economy.
I am pleased to be here tonight to discuss the impact that COVID-19 is having on our company and on our programming for Canadians, and to share our thoughts on government responses to this crisis.
First, I will say a few words about Corus. We are Canada’s leading pure play media and content company. We operate 15 Global television stations; 34 specialty networks including such leading brands as HISTORY, W, Showcase, HGTV Canada and Food Network Canada; and 39 radio stations across the country. Our subsidiary, Nelvana, is Canada’s premier animation studio, and Corus-owned Kids Can Press is Canada’s largest independent children’s book publisher.
In Quebec, we operate Historia, Séries+, Télétoon and the Disney channel. Toon Boom, our Montreal-based division, creates software for international studios.
We work closely with producers to create thousands of hours of Canadian programs every year. All told, our programs and our products are exported to 160 countries around the world.
Every part of the Corus Entertainment family has been affected by COVID-19 in some way. As is the case for so many other businesses, our supply lines have been disrupted, our customer demand has fluctuated, our employees have had to adjust to working from home and we just don’t know when things will get back to normal.
Uniquely, we have continued to provide an essential service to Canadians throughout this crisis. Global News, as you will know, is one of Canada’s largest journalism organizations. We employ approximately 1,000 journalists and technicians in the news division and spend roughly $140 million per year to provide local and national news from coast to coast. Since March, we have proudly maintained all of our local newscasts. More than that, we have added special COVID-19 news broadcasts to our schedule, provided round-the-clock updates on all our radio stations, interrupted regular programming to air news conferences and health briefings daily, and launched a 24-7 online news streaming service. We have done this while navigating significant logistical challenges and having to invest in new equipment and technology to protect our news-gathering staff.
Audiences have responded. Ratings for Global News broadcasts have risen significantly since March, and Global News has solidified its place as the number one private-sector online news brand in Canada. In this time of uncertainty, Canadians are gravitating to reliable news and information sources, and we are very pleased to be one of them.
However—make no mistake—the news business is challenging. It was challenging before COVID-19, and it is more challenging now. It is challenging for journalists, like Caryn Lieberman, who last week spent a day behind the scenes, telling the stories of life and death in one of the country’s busiest COVID-treatment wards at Toronto’s Humber River Hospital. It is challenging for our business, which has needed to invest even more in gathering the news while pre-empting the commercials that pay our bills.
Our news content is delivered almost entirely on radio, TV and online platforms, all of which are entirely dependent on advertising. Since social distancing restrictions were enacted in mid-March, and with many businesses closed entirely, we have seen significant disruptions to our advertising revenues. Because news, and local TV and radio more generally, operates on a fixed-cost structure, the bottom line has significantly worsened.
Corus is extremely proud to be a news provider. We want to continue to provide this essential service to Canadians for years to come. Crises like COVID-19 have a way of clarifying what we as a society cannot take for granted. We believe broadcast news is one of those things. It is vital; it faces challenges, and it needs support.
What can the government do to help?
First, I want to recognize certain helpful measures the government has already taken. On March 31, Minister Guilbeault announced that the CRTC will not request payment for part I broadcasting licence fees for the current fiscal year. This measure will provide roughly $30 million in savings to the broadcast industry.
While that amount is relatively small and will not nearly cover the news broadcasters' shortfalls, it is a start.
We would strongly urge the government to place news broadcasters in a stronger position to sustain their operations now and going forward. That would entail measures such as waiving additional fees, such as broadcasters' part II licence fees, which are more substantial, as well as things like reimbursing certain costs, such as the 600 megahertz transition costs that have been forced onto broadcasters not through the will of their own, but by government decisions. We believe it ultimately entails ensuring that private broadcasters are able to cross-subsidize news with other, more profitable parts of their businesses.
While COVID-19 may be consuming a great deal of Corus' current organizational focus, we intend to emerge from this crisis on a solid footing. Our news division and the dozens of communities it serves with public-interest journalism require our future success.
That is why broadcasting policy reform remains so crucial. Before understandably shifting its focus onto COVID-19, this government pledged to table new broadcasting legislation in Parliament by the end of the year, and we certainly hope that's still possible. The government recognized that a rapidly changing, competitive environment has made broadcasting policy reform an urgent priority, and we would say that COVID-19 has made it more urgent still.
While almost every other business in Canada has been making rapid adjustments to deal with the new economic environment, broadcasters are not treated like every other business. Corus' licences require us to spend 30% of last year's revenues on Canadian program supply this year, regardless of what has happened to this year's revenues. Our licences prescribe not just what kinds of programs we need to spend our money on, but the time of day we have to run them. All of this limits our ability to adjust for COVID-19 in the short term as well as remain competitive long term with foreign streaming giants.
Thank you again for the opportunity to appear tonight. I would be pleased to answer any questions.
