Thank you very much.
It's a great pleasure to be with you. It's a particular pleasure to be seated next to the national chief.
News Media Canada represents about 550 news titles across Canada, from independent weekly community newspapers to large urban and national dailies. Allow me to begin by providing a high-level overview of the state of the Canadian news media publishing business.
On the negative side, the advertising market in Canada has continued to remain very challenging. Simply put, too many ad dollars are being scooped up by Google and Meta thanks to their duopoly over online advertising and Google's monopolies throughout the supply chain.
We also continue to see the brazen theft of our intellectual property on an industrial scale by AI companies. These companies aren't just providing snippets; they're providing very detailed summaries and passing them off as their own creation. They're depriving news publishers of audience, subscriptions and advertising, and are thus capturing the value that journalism depends on for its survival.
Big tech is extending its dominance over news distribution and monetization—first established over search, digital ads, social media and app stores—into the new world of generative AI. To defend the free press, Canada must act.
On the positive side, while the economics of the business are far from great, we're seeing a level of relative stability in newsrooms after years of job cuts. Federal policies and supports are working as intended. The Canadian journalism labour tax credit is rewarding news businesses that maintain and grow their newsrooms. The Online News Act is seeing $100 million flowing annually to news businesses, large and small, in lieu of content licensing agreements. Aid to publishers, special measures for journalism and the local journalism initiative are all important and are making a meaningful difference to many publishers.
What are we asking you to do? First, ensure that the Canadian journalism labour tax credit is maintained at 35%. Currently, it is scheduled to revert to 25% on January 1, 2027. The credit is highly efficient in that it rewards those who maintain and grow newsroom employment.
Let me be clear that recommending to maintain it at 35% is the most important thing you can do to maintain newsroom jobs across Canada. On a related note, the qualification criteria for the credit currently excludes many smaller family-owned publishers. That can be remedied by changing the eligibility requirement for two newsroom employees to allow the owner-operator and family members working in the newsroom to count towards eligibility.
Second, renew the local journalism initiative.
Recognizing that we live in challenging fiscal times, let me give you four ideas that won't cost the federal purse one dime.
First, follow Ontario's lead and set aside 25% of the federal news spend for news media. The Ontario policy is making a meaningful difference to many publishers, large and small. It's a policy that the federal government should adopt.
Second, close the loophole in the Income Tax Act that is providing a $2.2-billion taxpayer-funded subsidy for digital advertising on foreign big-tech platforms.
Third, the government should declare unequivocally that there will be no exception made to the Copyright Act with regard to text and data mining. We cannot allow foreign AI giants to go on strip-mining Canadian news.
News media are aligned with creative industries. AI companies must seek our consent, provide credit and compensation, and be transparent about their use of our works. By respecting these principles, news media can help to build a trustworthy, reliable and sovereign AI sector in Canada, one that grows with us, not at our expense.
Finally, the government should stop doing business with AI companies that steal from news publishers and other creators. This can be accomplished through supplier agreements in the federal government's procurement policy.
Before I conclude my opening remarks, let me leave you with this recent statement from A.G. Sulzberger, chairman and publisher of The New York Times:
...I fear we are careening toward a future with fewer and fewer journalists to do the expensive, difficult work of original reporting—going to places, talking to people, digging up information, covering important issues and events, providing context and analysis, investigating the powerful. A future where a crucial wellspring of a healthy society and a stable democracy—the truth, understanding and accountability provided by original journalism—continues to dry up.
The members of this committee and the Minister of Finance can help ensure that this doesn't happen.
Thank you very much. I look forward to our discussion.