Government Operations Committee on Oct. 3rd, 2017

[The Chair, Conservative, Tom Lukiwski]

Colleagues, we are actually running a little behind, so we'll start the meeting now. This will be meeting number 98. Today, we'll be dealing, once again, with the communication policy pertaining to government advertising.

We have some guests with us who will be appearing via teleconference. Colleagues, what we'll do, from a procedural standpoint, is start with them, and then go to our guests who are appearing in person.

I ask all intervenors, whether on video conference or here in person, to try to keep their remarks as brief as possible. We will have four separate presentations. If we can keep them to 10 minutes or less, that should allow us enough time for at least one complete round of questioning by our colleagues here in person.

With that, ladies and gentlemen, we'll begin.

I will start with the representatives from the Alberta Weekly Newspapers Association.

[Duff Jamison, Chairman, Government Affairs, Alberta Weekly Newspapers Association]

Good morning from Edmonton, Alberta.

I am Duff Jamison. I am the president and CEO of Great West Newspapers, which publishes 18 community newspapers here in this province.

Today, I'm here in my role as the government affairs chairman for the Alberta weeklies. That association represents 108 titles across the province, most of which are still independently owned and operated.

Community newspapers face an uncertain future, as advertisers, including the federal government, have begun to rely more heavily on digital platforms to communicate key messages. Print advertising remains the mainstay of our members' business models. Community newspapers rely primarily on local businesses, community organizations, schools, local governments, and national and classified advertising. National advertising includes automakers, financial institutions, the federal government, and other large players. It has experienced the greatest decline over the past four years.

Community newspapers generally serve market populations of fewer than 100,000 people and the majority would be well under that. We are the original hyper-local guys providing the primary source of local news for our residents and very cost-effective local advertising.

Our once or twice a week frequency distinguishes us from the dailies. Our news is rarely of the breaking news variety. Our readers seem comfortable with the fact that our newspapers are not available in print every morning. They need and want to know what's happening in their communities, but they don't demand it the minute that it happens.

When it is important to get the story out quickly, most community papers can quite capably do that on our digital platforms. We may lack the digital horsepower of The Globe and Mail, but we're not in the Dark Ages either. Free content, a reader's nirvana in the digital age, is actually old news in the community newspaper industry. Although many paid subscription weeklies remain in small markets, in the larger markets, we've long delivered community news free to our readers, which has been paid for by our advertisers who want to reach the total market.

The real secret sauce of a successful community newspaper is operating it like it is community-owned, so not at arm's-length, as is often the case at a daily, but in the trenches, by actively participating in our communities. I often tell our local politicians and community leaders that, like them, we are in the business of building stronger, healthier places for everyone. We are fully engaged with our communities, leaving no doubt with anyone that we have their best interests in mind. By doing so, we earn the newspaper credibility and respect with its readers, which earns us support when we criticize the leaders and institutions that we feel have let the community down. If you ever have any doubt about the relationship between residents and their community newspapers, visit us at civic election time, which it is right here in Alberta today, as the election is October 16. Battles are often won and lost on our pages. Emotions run high and letters to the editor are overflowing our inboxes.

Unfortunately, in spite of the continued loyalty of our readers, the current picture for community newspapers is not a pretty one. As I mentioned at the outset, print advertising revenues, by far the largest source of revenue for Canada's community newspapers, are in decline. Digital advertising revenues, which are tied to our news reporting, remain insignificant simply because community newspaper websites and social media feeds do not generate the traffic required to cover their reporting costs. It's not even close today, nor will it be in the foreseeable future. Although some publishers have launched digital agencies offering programmatic advertising—SEO, LSO, etc.—it's still to be proven whether a small market can generate significant digital profits to support local journalism.

Subscription and newsstand revenues are important sources of revenue for the declining number of paid circulation community newspapers. However, with circulations often fewer than 5,000 and annual subscription rates of about $50, these also fall well short of covering reporting costs. Paywalls help protect this revenue, but also reduce online traffic and digital advertising revenue with it. It's very difficult to see a point at which print advertising revenues will not be the major revenue contributor for even paid community papers.

There is no reader revenue in a free paper and most Canadian community newspapers are not paid newspapers, which leaves them to rely entirely on advertisers to pay the costs of reporting local news. These papers tend to be in larger communities near metro areas served by dailies and other media.

Not often mentioned in the discussion is that many local advertisers and organizations remain dependent on local media to reach local residents and consumers. In most communities with fewer than 100,000 people, print media delivers the largest audience by far. Although most businesses have websites, Facebook groups, and Twitter feeds, it has proven very difficult to build any real mass of followers. Without the market penetration of local media, therefore, most would find it extremely difficult, if not impossible, to reach the vast majority of residents.

A recent study bears out our contention that community newspapers deliver the largest audience by far, with 83% of Canadians being local community newspaper readers, according to a 2016 study by Totem Research. This study showed that time spent with the printed newspaper is virtually unchanged compared with two years ago.

Printed community newspapers readers are reading their local information as well as advertising, with 63% stating that they want to see advertising in their community newspaper. The 2,400 Canadians surveyed reported that community newspapers were the top medium for local information, followed by local television and local radio.

Does government have a role in helping to preserve this important source for local information? We think it does. The federal government could replenish its print advertising budget. While local governments remain solid advertisers, federal and provincial advertising has nearly dried up. A decade ago the federal government spent 47% of its ad budget in newspapers: 28% in dailies and 19% in community, ethnic, and aboriginal weeklies. In the 2014-15 fiscal year it spent 7% in total on newspapers: 1% in dailies and 6% in weeklies. In that same period, the spending with Internet companies rose from 6% to 28%. Most of that money went to U.S. firms like Google.

Section 5 of the government's policy on communications and federal identity sets out objectives and expected results. The objectives say government communications are to be responsive to and meet “the diverse information needs of the public”. Multiple surveys of the public show that their local community newspaper is by far the number one source of local information, a fact easily confirmed with a call to any mayor or municipal CAO.

Section 5 also states that communications are to be “cost-effective and achieve savings through standardization”. Our experience tells us that the emphasis is too often put on “cost” and too rarely on “effective”, when you would hope it would be the other way around. After all, the objective of the exercise is to be responsive and meet the diverse needs of Canadians.

Many Canadians, particularly those living outside major cities, continue to rely on their local community newspaper for important information. Members of Parliament do too, and they are in regular communication with the reporters, editors, and publishers of their local papers. They know where their constituents find out what's happening locally. Simply having the federal government make a serious commitment to include community newspapers in its advertising budgets would significantly improve the effectiveness of its communication with a diverse group of Canadians and go a long way toward supporting local journalism.

As the publisher of the Rainy River Recordsaid to a CBC reporter on the closure of his newspaper in September 2016, the government's decision to pull its advertising budget from newspapers and spend it on social media has made a big difference.

Thank you for your time today, and we welcome your questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, gentlemen.

Next we'll go to Mr. Thomas Saras, who is with us from Toronto via video conference.

Mr. Saras, you have 10 minutes, please.

[Thomas Saras, President and Chief Executive Officer, National Ethnic Press and Media Council of Canada]

Mr. Chairman, members of the committee, bonjour.

On behalf of the National Ethnic Press and Media Council of Canada and its 850 members, I am appearing before you today to explain a few things that we have lost, at least for the last three years. It is a policy that started under the government of the late prime minister Trudeau, continued with Mr. Mulroney, and was followed by Mr. Chrétien and subsequent governments up until the most recent government, for the last three years. Then suddenly, the government advertisements to the ethnic papers were shut down totally, without an explanation or any reason for this policy change.

I want to tell you that Canada is a multicultural country, as declared by the House of Commons and accepted by the Government of Canada. As such, the various communities maintain the right to information in their own language, whatever it may be, their mother tongue. Therefore, the continuation of those publications is vital. They are helping Canada and also the government to spread the messages and the policies to the various people, new Canadians or old Canadians, who still continue to read the news in their mother tongue.

In the last three years, because of the change in policy, a number of publications have already shut down. It is a sort of crisis that affects not only the members of the ethnic publications but also the mainstream media, and this is a trend. The whole industry is in trouble, and we are trying to survive. If this trend continues, of course many publications are going to die. Some will probably try to come out for a very short period of time. The fact is that, either way, the one who is losing is Canada.

Please allow me to refer to some policies of other governments. The Italian government, for example, has a special budget every year for Italian publications outside of Italy. Every publication in the Italian language published in Canada receives x number of dollars each year from the Italian government to support itself. The same thing happens as far as I know with other governments and communities. By doing that, we allow the intervention of foreign governments into the business of Canada. Some are friendly, and some are not so friendly. The message that goes out is vital to the future of all of us as a country, as a community, and as a unified entity of the international community.

In the past, we had other problems. Through the system of distributing government advertising through Public Works Canada, they created a number of third parties that used to get 30% of every advertising unit for no reason, and that money was cut from the publishers in order to support the third parties that were looking after bringing in the advertising.

As a result, the very first time we lost I believe it was around $2 million. Five years ago, the last time, we lost another $1.5 million in Toronto, because the official agent that was getting those advertisements went bankrupt. Although the Government of Canada paid the money, that money never reached the members who carried the advertisement.

Today I'm not just asking you to restore the fact and start giving distributors government advertisement, or a portion that goes to our members, but it is also very important that your committee decides on the elimination of the third parties. The government has the ability to direct deal with every publication, which is going to be straight and clean business. No one interferes and nobody can get any profit out of this business, except the person who offers its services. This is the publication and the publisher, or the editor of the publication.

That is what I want to tell you. I wanted to bring those to your attention. Some of you know the industry very well and the problems we are facing.

I am ready to answer any questions. Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, sir.

Now we'll go to our two guests who are with us in person, Mr. Matthew Holmes, from Magazines Canada; and Mr. John Hinds, from News Media Canada.

Mr. Holmes, why don't we start with you?

[Matthew Holmes, President and Chief Executive Officer, Magazines Canada]

Thank you, Mr. Chair and distinguished members. It's a pleasure to appear before you again.

I'm Matthew Holmes, president and chief executive officer of Magazines Canada, the national association representing the majority of Canadian-owned and Canadian-content consumer, cultural, and business magazines. French, English, indigenous, and ethnic member titles cover a wide range of interests, trades, and communities across the country.

Today I plan to tell you that Canada's approach to advertising has never had to question its own impact on the greater media ecosystem it relies upon. But that is changing. From the earliest days of the national railways, which became both the conduits for and the genesis of our national broadcaster, our ability to communicate with our fellow citizens has been established through supportive legislation that has never questioned the fact our media were already, by definition, domestic—covering Canada, empowering and employing citizens, creating tax base, etc.

The government has not had to make explicit that its advertising is a part of the media's business model. In fact, I have seen officials from Public Works and Government Services testify recently before committee that advertising is not meant to support the domestic industry, and in one sense they are correct. But this view also glosses over the very clear fact that it always did support it, until now. It is my opinion that this committee's work is significant, for the simple reason that the recommendations you make, or do not, will help decide whether that symbiotic relationship continues between government and Canadian-based, Canadian-content media.

Magazines are an essential part of Canadians' lives and an important economic sector that knits our communities together. We have nearly 2,700 business-to-business consumer and cultural magazine brands, employing roughly 15,000 Canadians, from digital video production to investigative journalism.

Canadian magazines are published in 34 different languages, from every single province and territory in the country. By editorial focus, consumer titles represent 51% of the total, followed by business and professional magazines, including farm titles at 39%. Ethnic and arts and cultural titles each represent 5% of the total.

Magazine brands reach over three-quarters of Canadians of all ages, across all platforms, but the latest Vividata research also shows that 93% of Canadians still read magazines in print only, or a mix of print and digital. Even though Canada is one of the world's heaviest users of the Internet, only 7% of Canadians read magazine content exclusively via digital channels, including social media, web, tablet editions, and so on.

While Canada's magazine sector recognizes print's legacy, we are also drivers of digital innovation. I'm not here to make this an argument about the legacy print media versus digital disruptors. In fact, magazine media reach Canadians across print, digital, social, email, video, webinars, live events, even virtual reality.

Unfortunately, over the past few years the underlying economics of consumer magazine publishing in Canada have collapsed. Canadian print advertising spending has migrated to digital platforms, and digital advertising has, in turn, migrated offshore, largely to U.S.-based digital content distributors. Advertising revenues have decreased by half since 2007, from $732 million to $390 million. This decline has accelerated in the last four years by one-third.

Shifting over to our business-to-business and farm media, they represent 95% of the decision-makers in small and medium businesses in Canada, and often can be sub-targeted by industry and geography. This is an important demographic affected by government policy and incentives, one that you may want to ensure receives clear messaging from government on topics as broad as changes to the tax code, or as specific as interim financial assistance for operators affected by the softwood lumber dispute with the U.S. Facebook here probably misses the mark.

I've provided you with a very quick introduction to the sector I represent. Now let me tell you how the government, historically, has supported it through policy and legislation.

Canada's direct support for the magazine sector is older than the country. It predates Confederation. The original postal subsidy was designed to ensure that Canadians across the country had equal access to the information and stories that tie us together. Unspoken is that much of this is directly underwritten by advertising and, historically, that did include government advertising as well.

The ongoing principal support for magazines, as well as for paid community newspapers, is the Canada periodical fund that Minister Joly last week reaffirmed as the primary vehicle for the government's support for these important sectors.

In 1999, at the end of the so-called “magazine wars” fought under NAFTA and via the WTO, our government established the Foreign Publishers Advertising Services Act. The act was established in response to a clear trend of U.S.-based media giants that were aggregating content, directing it at Canadian audiences, and then using that audience to sell ads to Canadian advertisers. Does this sound familiar? At the time, this was universally considered an end run on our domestic media, so the government of the day limited the amount of advertising space a foreign publisher could sell to a Canadian advertiser in a Canadian edition to a maximum of 18% of the total available advertising space.

In my opinion, this act was based on the principle that the government was not supportive of massive foreign media platforms that target and monetize Canadian audiences and that are unaccountable to our regulatory or civic fabric.

On top of this, in 2000 these policies were strengthened via sections 19 and 19.1 of the Income Tax Act, which allows Canadian advertisers to deduct advertising costs from their taxes when they advertise in Canadian-owned and Canadian-controlled magazines, newspapers, or via broadcast channels. However, this was never applied to digital properties, which was an oversight at the time, since these were generally non-existent.

This change to the tax code was a clear signal by the government of the day that it had an obligation to directly support and foster the domestic media ecosystem, which was achieved via a support framework for advertising, full stop.

The net effect of these integrated policies was immediate and profound and led to the relative stability of Canada's magazine industry for over 15 years, but they were put in place before the Internet and e-commerce were realities. Where the old Canada sought to minimize the damage to local business from foreign advertising platforms that target Canadians, we see the new government instead report growth in digital advertising, most of which is for foreign platforms, from 7% to 34% in a matter of years.

Where the old Canada sought to incentivize support for the domestic media ecosystem through the tax code, we see the government ignore a loophole that sees any online advertising anywhere qualify for the full tax deduction intended to incentivize support for Canadian-owned and Canadian-controlled print and broadcast media.

In both cases, the financial support is flowing to foreign bodies that employ few, if any, domiciled, tax-paying Canadians; that support few local businesses; that meet no Canadian content thresholds; and that, in fact, are not even obliged to pay GST on the goods and services they sell here.

Your peers on the Standing Committee on Canadian Heritage released a major report in the summer that called for the government to broaden section 19 of the tax act to include digital advertising; to subject foreign news aggregators and advertisers to the same taxes our domestic industry faces; and finally, to increase the dissemination of government information, particularly in official languages and ethnic communities that are served by our small media. I think this committee should echo these recommendations.

In closing, Mr. Chair, I would like to return to the topic I opened with: whether the government has an obligation to consider the bigger ecosystem impact its advertising expenditure has. I would argue that it does, just like it might consider the economic magnifier of investments in major manufacturing or infrastructure projects.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Mr. Holmes.

Our final witness will be Mr. Hinds.

You have 10 minutes.

[John Hinds, President and Chief Executive Officer, News Media Canada]

Thank you, Mr. Chair and committee members.

Good morning. My name is John Hinds, and I'm the CEO of News Media Canada. We're the voice of Canada's newspapers, and we currently represent over 800 daily, weekly, and community papers from coast to coast to coast in English and French.

On behalf of all our newspapers, I would like to thank the committee for this invitation to consider this important issue.

I am here today to speak on the importance of government advertising policy and its impact on communicating effectively with Canadians.

The first issue I would like to deal with is a perception that Canada's newspapers hear far too often: that nobody reads newspapers anymore, or that people don't advertise in newspapers because nobody reads them. Nothing could be further from the truth. In fact, more than ever, Canadians read newspapers. Almost nine in 10 Canadians read a newspaper every week, and that's up from five years ago. Six in 10 Canadians are reading print newspapers every week. Newspaper readership is now multi-platform, with three in 10 Canadians reading both print and digital formats. Even 85% of millennials are reading newspapers, with phone, of course, being their preferred platform.

As you all know, Canada's newspapers are facing a business challenge, as they grapple with changing revenue models, but we don't have a readership problem. There is still a strong case to be made for print readership and for print advertising, particularly with certain key demographic groups. Eight in 10 boomers are reading newspapers, and 64% of those are reading in print. Of business decision-makers, 92% are reading newspapers, and 71% of those are reading print.

Indeed, one of the challenges that you have likely heard about is the ongoing lack of access to broadband by many Canadians. This was referred to by Minister Joly in her cultural announcement last week. In Atlantic Canada, for example, only 70% of non-urban residents have access to broadband, and much less so in the north. Similarly, in Quebec, nearly one quarter of non-urban residents do not have broadband access.

This inequity extends to low-income Canadians. While 95% of Canadians in the highest income quartile are connected, only 62% of those in the lowest income quartile have access. We have also heard a lot about data caps and costs of access to quality broadband.

At News Media Canada, we believe that the Government of Canada has a duty to inform all Canadians about its programs, services, policies, and decisions. Advertising is one of the ways in which the government ensures that individuals, families, and businesses have the information they need to exercise their rights and responsibilities, and to make informed decisions about their health, safety, and security.

While the race to digital is well under way, an important factor that currently escapes many who are responsible for federal government advertising is that Canadians trust ads that appear in newspapers and on news websites. According to a 2016 study by Advertising Standards Canada, 73% of Canadians are very comfortable or somewhat comfortable with ads in newspapers—higher than any other news medium in the country.

Canadians still trust traditional media the most. According to the 2017 Reuters Institute “Digital News Report”, eight out of 10 Canadians still consider traditional media and their brands among the most trustworthy sources. In short, Canadians trust advertising content in newspapers, both print and digital, more than any other media. Ads on social media, such as Facebook, and in search engines, such as Google, are among the least trusted. The difference is most pronounced in the digital sphere, where only 18% of Canadians trust an ad on a mobile device, compared to almost 40% for a newspaper website.

Our research data shows that Canadians want to see advertising of government programs and services in their newspapers: 72% of Canadians want to see government ads in newspapers, while only 40% want to see them in an Internet search, and only 34% on social media.

We believe that the Government of Canada's advertising policy should reflect where Canadians look to find information about their community, and that newspapers, both print and digital, play a vital role in informing Canadians. We believe that the government's advertising spend should be smart and provide information to Canadians in trusted formats where they want to see ads.

We recognize that the government is spending less on advertising. It spent 39% less last year than in previous years. In 2015-16, the federal government spent $42.2 million on advertising, a reduction of $26.5 million from the previous year.

Despite this fact, the decline in federal government advertising expenditure has been well out of line with private sector advertisers. Of the $42.2 million that the federal government spent in advertising last year, the amount spent in daily newspapers was $513,120 or 1.7% of the total government ad spend. The amount spent in community newspapers, $488,563, was 1.6% of the total government ad spend. This decline is way out of line with non-government advertising revenues.

Despite our recent challenges, newspapers remain the third-largest advertising vehicle in Canada, behind digital and TV, with revenues of over $2 billion, or about 17% of total ad sales.

There's an added benefit of a government advertising policy that encourages placing ads in Canada's newspapers. Ads placed in newspapers are effective, and they have the added advantage of strengthening Canadian businesses and Canada's communities.

The Government of Canada has traditionally been the largest advertiser in the country, and for decades the government understood that by working with local media businesses they were enabling local media, not only to inform local residents about government programs and services, but also to report on town councils and local hockey games, while engaging businesses and volunteers in raising funds for local hospitals and the like. Local news doesn't happen when those advertising dollars are sent to Silicon Valley. In addition, these local newspapers employ Canadians and pay taxes, and newspapers still employ about 65% of the journalists in Canada.

This is not an issue that's taking place in a conceptual bubble. My colleague Duff Jamison recently reported that the newspaper in Rainy River had closed. The decline in advertising revenue was the reason, and according to the publisher the largest advertising decline was in government advertising.

I'm coming to you today to underscore the unfairness on today's playing field and to offer you a simple message: that government advertising dollars spent in Canadian newspapers, both print and online, provide an effective way to reach all Canadians, give value for money spent, and support Canadian businesses and communities.

As elected officials and trustees of the public purse, this is a message I sincerely hope you take to heart.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Colleagues and witnesses, one of the challenges any committee has is that there never seems to be enough time for all of our questions. However, today we are under even more of a time constraint because we have another witness coming before us very soon. We'll do our best to get all the questions on the record and to consider all the information you want to put before us.

Mr. Drouin.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair, and my thanks to all of the witnesses for being here.

I'm a rural Ontario MP and I have to use community newspapers to reach out to my target audience, because not everybody has a subscription to digital platforms, and even if they do they can't access it sometimes because of the lack of rural broadband.

One of the things you mentioned, Mr. Holmes, was that in the nineties the government of the day put in a policy to limit foreign advertising. If we did that as a government, would we have the necessary tools on digital platforms? If we were to limit Facebook advertising, say, would we have something similar in Canada to reach our target audience?

[Matthew Holmes]

You mean a similar platform?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Do we have a similar platform, a digital platform, that would enable us to reach that audience?

[Matthew Holmes]

There is already a robust digital ecosystem in the Canadian media. I can speak for the magazine industry I represent, but I know this also exists in many of the community papers and certainly in the dailies and other digital-only platforms. They provide Canadian content and Canadian views and perspectives. The business model itself isn't sufficient for many of these businesses. The magazines have moved into digital. They used to sell page advertising; now they're selling digital advertising. But it's not just about making that transition from one to the other. You can't run the same business off that same revenue stream. It's migrated into a very different ecosystem. The large aggregators like Google can sell a click ad at a fraction of a cent, or at a return so low that a Canadian business wouldn't be able to match it and still be viable.

What I was trying to represent is that our magazine industry is active across a full continuum. They can touch Canadians whether it's in print, on their phones, or on their laptops, and they're able to get that messaging out in a multi-pronged approach.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you.

Mr. Saras, you talked about third party advertising, and I want to get all of your opinion on this. What happened with the communications procurement directorate? I understand that a few years ago there was a move towards larger publishers, towards a prime contractor. They would source out to larger newspapers or radio stations. This is affecting community radio stations and community newspapers. The Government of Canada no longer has the same presence in the smaller markets. I'm just trying to understand. You mentioned that you had some contracts with third party organizations, and now you don't. Can you explain that to me?

[Thomas Saras]

The system has been developed over the years, but some smart guys created a company representing the ethnic papers. They were taking part of the distribution of the government advertisements to the various members. As a result, they were cutting, by 30%, the total amount that was supposed to be paid to the newspaper.

Eventually, in two cases at least that I can remember, they gathered the money for six or seven months and then they declared bankruptcy. The result was that, for six months, my members lost all their money that the government owed to them.

We had a problem with Public Works Canada, to this extent. In direct conflict, I accused them of working or co-operating with them for reasons that I'm not in a position to know. As a result, the members were losing money, which is very vital for their survival. Since that time, I've never heard anything from the Department of Public Works.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Is the Government of Canada advertising with your newspapers right now?

[Thomas Saras]

No. For the last two years, they didn't give us even a penny. Not one of my members has received even a penny.

As I told you before, some papers are surviving because they receive financial support either from the the Department of Canadian Heritage or from various governments outside of Canada.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Are there any comments that you, and others as well, in Edmonton, want to make?

[Duff Jamison]

Well we don't really have third parties in our case, other than the advertising agency, and in the federal government's case, that's Cossette.

We don't see the same thing that was just described in the ethnic newspapers.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

So with the current government advertising, you're doing that through Cossette.

[Duff Jamison]

Unlike the ethnic newspapers, we have virtually none. Although, because we have a by-election, we have three or four papers in Alberta that will get some advertising for that by-election. That's about all we'll likely see in 2017.

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

It has pretty much dried up completely for us, as well, over the last couple of years.

[Duff Jamison]

I'll give you an example.

We lost a large auto manufacturer that had been advertising with community newspapers for decades, back in December 2016. The agency told us that they recognized we are by far the most effective and engaged media in the local communities, that people read their community newspaper like no other media, but he was looking for dollar savings, cost savings.

He used the same word that we see in the policy, “efficient”. What he means by efficient is that it's cheap. An agency can make their bottom line much easier by placing inexpensive digital advertising with the Googles and Facebooks of this world compared to buying display advertising in newspapers. It's about as simple as that.

He admitted that it wasn't going to be as effective, it wasn't going to reach as many people, but it was so cheap that he couldn't help but go there.

I think we're seeing the same thing with the federal government. You're being told that this is going to save you money and your budgets, that it's going to be just as effective. When it comes to particularly exurban markets, that's not true.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll now go to Mr. McCauley for seven minutes.

Mr. McCauley, I'll give you a sign when you're into your five minutes. You can share your time with Mr. Shipley.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks for being with us, gentlemen.

Mr. Jamison, Mr. Merrell, it's great to see someone from Edmonton. It's worthwhile to the committee to see someone from Edmonton today.

We're short on time, so I'll ask a very quick question to you.

The Government of Canada's objectives are to provide ads, communications that are responsive to the diverse information needs of the public. I'm looking at survey results from AdCanada Media from 2014. It shows communities of 5,000 and fewer that are served by a lot of your association, and that 71% prefer the community newspaper for information. In communities of 5,000 to 10,000, 78% prefer community newspapers for their information. Only about 15% in both of those communities preferred it over the Internet.

Considering this information, are we failing what the government directive is, which is to provide diverse information? Are we failing rural Alberta and rural Canada?

[Duff Jamison]

I can step in there. The short answer is yes. You don't reach anywhere near the number of people the local community newspapers reach.

Also, we're multi-platform, as John Hinds pointed out. We're not simply ink on paper. We have all the digital channels that all the other players have, but we know from our own research that far and away the majority of our readers prefer the print product.

Here in Alberta, civic elections are under way. Voting day is October 16. I'm in St. Albert, on the northern border of Edmonton. We have 38 ads in tomorrow's newspaper from a politician seeking office. They know who's reading the newspaper. They know where their message is going to be the most effective.

[Kelly McCauley, Conservative, Edmonton West, AB]

You're talking about effective communication. Previously we had someone from the PCO here, and we were asking them about how they are measuring the response rate, and what metrics they are using. They were saying that they get about a 2% click-through rate. Do you think we're just pushing money at Facebook because it's cheaper and trendy as opposed to looking at proper response rates you might be getting at your newspapers or media outlets?

[Duff Jamison]

It's very difficult to measure print. Some advertisers would measure it at their cash out, asking where we found out about their sale.

You have to be very careful with the click-through rates as well. Nearly half the traffic on the Internet is robots crawling around and doing the clicking for you. There has been quite a lot in the news recently about problems Facebook and Google are having with that.

The digital platforms allow all kinds of analytical reporting that we simply can't provide in the same way with print. John Hinds went quite extensively through Totem Research that had been done, and that's how we measure.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thank you.

Mr. Hinds and Mr. Holmes, at the previous meeting we had a deputy minister from PCO here, and we asked if consideration was given to support of Canadian media, such as local print and radio, over U.S. media. Her comment was that they consider that. Do you think we are considering it?

[John Hinds]

We haven't seen a lot of it. If you look at Canadian media, whether it's newspapers or magazines, and where daily and community newspapers are at 1.5% and 1.7% each, when the marketplace is investing about 17% of their ad dollars in it, I wouldn't think there is much of a consideration there of Canadian media.

[Matthew Holmes]

At best, I think you could make the claim that the support for television advertising, which disproportionately represents about 51% or so, is a high production value. It's mostly going to domestic broadcasts. However, the math would suggest that the relatively cheap format of online advertising means the majority of the government's actual output in advertising is likely digital now.

[Kelly McCauley, Conservative, Edmonton West, AB]

It does seem to me, considering that the amount of money we're spending in the States is similar to the amount of money we're spending here, that we're not giving consideration to Canadian outlets, whether they serve small communities or cultural communities. It seems to be going south.

Gentlemen in Toronto or Edmonton, do you have any comments on that?

[The Chair, Conservative, Tom Lukiwski]

Sorry, the time is up.

Mr. McCauley will be splitting his time with Mr. Shipley. You have about two minutes left, Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

Thank you, witnesses.

Mr. Jamison and Mr. Merrell, I'm from southwestern Ontario, a very rural area next to a city that had dailies. All our communities have weeklies. These are run by families; they're small businesses. There is concern about some of the funding they're struggling with and about some tax changes. Are you hearing anything from your small businesses about the concern of passing on a family inheritance in these businesses?

[Duff Jamison]

Here in Alberta it's a big issue. Town halls are being held regularly. In our area there have been three in the last 10 days. They're full of angry farmers—

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Point of order.

[The Chair, Conservative, Tom Lukiwski]

Excuse me, gentlemen, point of order.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Point of order, the question is not relevant to the topic at hand.

[The Chair, Conservative, Tom Lukiwski]

I was listening to the question carefully, and I believe it is relevant. He was talking about the small newspaper industry within southern Ontario and asking these gentlemen about the impact it may have on their industry, so I think it's entirely relevant.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

With all due respect, Chair, we're talking about the advertising policy.

[The Chair, Conservative, Tom Lukiwski]

We are, and I think Mr. Shipley was talking about companies in the advertising business. It's their business to gather advertising for small newspapers.

Continue along, and try to get an answer that Mr. Shipley has asked. I'll be paying close attention.

Please go ahead, gentlemen. I'm sorry for the interruption.

[Duff Jamison]

I'll be brief.

I kind of agree with the intervenor there that it might be a little off topic, but the truth of the matter is that community newspaper publishers are small business people like many other business people, and we are greatly affected by these proposed changes, and many, many of us, including myself.... I put my submission in yesterday.

This is going to be very harmful in transferring from this generation to the next. I bought the newspaper from my father, and my son works with us now. He would like to be able to purchase the newspaper from us. All of that is being turned on its head with these proposals. We use passive income, and that passive income is an important thing for all businesses. We need to save reserves, not only for rainy days, but for future acquisitions and all sorts of things that may come up. It's a big issue in our communities, no doubt about it.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I'd like to move on to—

[The Chair, Conservative, Tom Lukiwski]

Mr. Shipley, unfortunately we're out of time. I even gave extra time because of the intervention.

I'm sorry. We're going to have to go to Mr. Weir for seven minutes, please.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thanks very much.

I'd like to pick up on Mr. Hinds' observation that federal government advertising in print media has declined far more sharply than private sector advertising in print media. I'm wondering why you think that is.

[John Hinds]

I think there are a couple of reasons for that. I think there was a directive on the part of government to go digital. The reality is, in many cases, it's all about a lack of ROI. The private sector is very clear about ROI, and we see this with big advertisers. If they pull out of a market, they notice that because their sales go down.

With government programs and services, in many cases, there is not that clear direct linkage between investment in government advertising and the picking up of programs or services. There is a lack of measurement there.

Also, there has been a huge push for cost containment on the advertising budget, and I think we all say that digital advertising is not only cheap, but it's easy. We often hear that traditional media is harder to buy because you have to tailor your buy to the individual communities you're serving rather than push a button to Silicon Valley. There are a number of factors there.

[Erin Weir, NDP, Regina—Lewvan, SK]

Part of it is that it's cheaper, but you perceive an error in the government's assessment of the relative effectiveness of these different media.

[John Hinds]

We do, yes.

[Erin Weir, NDP, Regina—Lewvan, SK]

I ask if other witnesses have thoughts on the same question of what the government's motivation has been for turning away from print media.

[Thomas Saras]

If will you allow me, I want to say that it is not the same case with the mainstream media and the ethnic press. The ethnic press has a much smaller market to survive because it serves specific communities.

Even if the government advertises on the Internet or any other electronic form, the fact is that this doesn't serve the specific community. Either it is Bangladeshi, Pakistani, Tamil, or anything else, because they use their own language. They don't know, they don't have access to the big channels, and therefore, the message of the government never goes to those communities.

[Erin Weir, NDP, Regina—Lewvan, SK]

In terms of how to encourage more government advertising in print media, we've heard a couple of different options.

Mr. Saras, you mentioned the Italian government directly subsidizing publications.

Mr. Holmes, you mentioned tax measures to support advertising.

Those are legitimate policy tools, but they're really outside our committee's purview. We're looking at the government's advertising policy, so I'm wondering if witnesses are looking for a requirement that a government put a certain percentage of its ad spending into print, if you're looking for the government to mirror the private sector's allocation of advertising dollars between different media.

If you could design the policy, what would you be looking for?

[John Hinds]

I think we'd ask for a smart policy, really targeting who you are advertising to. As we said earlier, if seniors are reading and boomers are reading newspapers, you should be targeting to the people you want to target. If you're targeting people in rural Canada, you should be using the most appropriate medium for that.

I think what we're saying, and what we've said to government all along, is you need to know who you're targeting, and then target your advertising dollars to that. The broad brush of digital may give you lots of clicks, but is it really impacting people who need it? And I would argue, again, that when you look at broadband penetration, when you look at seniors, when you look at low-income Canadians, many of whom the government are targeting for their advertising campaigns, again filtering the targeting of those people and those groups into the advertising buy is important. So I think we're saying buy smart.

[Erin Weir, NDP, Regina—Lewvan, SK]

Beyond encouraging government decision-makers to be smarter, how could we actually change the policy to encourage that?

[Matthew Holmes]

I could build on that. I would advocate for some specific values being put into the guidance that address a requirement for a diversity of media and forms of media being recipients of the advertising as well as some sort of assessment or benchmarking for the actual magnifier effect, the economic impact of that advertising that goes beyond just the audience. As I said in my testimony, we never had to question ourselves about that. Everything we did as a government advertising in Canadian media was ipso facto Canadian media. That's no longer the case.

[Erin Weir, NDP, Regina—Lewvan, SK]

I don't want to exclude our video conference guests, just in terms of your asks of the government policy.

[The Chair, Conservative, Tom Lukiwski]

Perhaps we'll go to Edmonton first.

[Dennis Merrell]

I think, further to the comment that was just made, that really if the federal government advertising policy more reflected what John mentioned, private sector advertising, certainly they're spending more vociferously in community newspapers and dailies than is the federal government, and you have to wonder about that. They do seem to understand that in order to reach particularly community newspaper audiences, which are largely rural, you just really need to at some point look at newspapers because they're the one medium that can really effectively reach 80% to 90% of those folks living outside the major centres.

I think that if the policy more reflected...we really as a government should try to reach the majority of Canadians. You just simply can't do that through digital advertising alone. And I think it has gotten tilted far too much in that direction, in my opinion.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Mr. Saras.

[Thomas Saras]

Yes. At this point, a percentage of the total budget every year was devoted to support the ethnic press. I don't know how much that portion was, but we were arguing always for a bigger part because much of their total amount was going to the mainstream media.

As I've said before, the last three years, my members have not been receiving even a penny from the Government of Canada. I believe that the last year even the Government of Ontario cut down in advertisement, although next year we are going to have elections here and now I hear that they are preparing a budget for advertisement. And besides all those things, if you allow me, the Government of Quebec, for example, instead of supporting the ethnic press or the press as an industry, imposed a new taxation on the circulation of the papers for environmental reasons, which means these people not only don't receive a penny, but now they have to start paying to the Government of Quebec for circulating 10,000 copies or 15,000 copies or 5,000 copies. This is going to—

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, Mr. Saras, we're well over time. We'll have to go to our final intervenor.

Madam Ratansi, please.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you all for being here.

I am coming back to the purpose of this study which is that in May of 2016 the government came up with a new policy that put a cap on what ASC would review, a $500,000 cap on advertising, and it should be non-partisan.

My question is to everyone. Is $500,000 a higher limit, because we had professors of journalism who told us that when you're asking for government advertising, is it the economic plan in action, is this the advertising you're wanting? Or is it advertising that says “Here is my program” with a Liberal logo on it? What is it that you're looking for, because we're saying the new policy has to address non-partisanship. How are we all going to ensure that non-partisanship is addressed? Secondly, is the $500,000 limit, from a governance perspective, too high a limit? If the ethnic media were to access advertising, say, and it was not an envelope of $500,000, what should be the limit?

Mr. Hinds, perhaps I can start with you.

[John Hinds]

Certainly. I think in terms of the ASC limits, most large campaigns would be over the $500,000 mark.

In our view, we would like to see smart government advertising in terms of advertising government programs and services. I don't think there's much partisan advertising around now. Obviously, political parties, MPs, and third-party interest groups, will also advertise but that's the partisan....

In terms of government advertising, I think what we're looking for is engagement with Canadians about government programs and services in their communities.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

How do we balance? If I advertise programs in the Toronto Star or The Globe and Mail or the digital media, or in magazines, how do I choose which local papers I should go to? I think I need help from everyone. How does the government choose which local papers or ethnic papers it should go to, because it has a limited budget?

[Thomas Saras]

The government has the ability to monitor the circulation. Usually, the circulation plays a major role for the decision-makers as to which paper they will advertise in. Therefore this is not a problem.

The other thing about the $500,000 or not, that depends on the programs and the message the government wants to send out to communities. If the government comes out every day with new measures, of course new advertisements would follow in order to make sure that across the board all communities receive the message.

If the government—

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Saras, I have a question for you.

You said that the government had sent money to a group of individuals who created a company and you thought there was some sort of collusion or a fraud with Public Services and Procurement. How would we be able to ensure that the governance structure is strong so that this type of fraud cannot take place?

[Thomas Saras]

Don't interpret my statements, please. I never meant that and I never said that.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Then it was me—

[Thomas Saras]

There was a problem and still there is a problem. One of the people today referred to Cossette. Cossette Media is the official agency of the Government of Canada, the agency of record, and therefore they keep records of all the newspapers that are receiving government advertising. It has nothing to do with the distribution of the ads.

We are talking about third companies that are doing nothing, absolutely nothing. They keep some connection with public works Canada and they manage to get advertisements for their own clients or the people they represent.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you for the clarification.

I have one more question, though, and the people from Edmonton can also answer the question if they wish.

Mr. Hinds, you said that all data say people are reading more newspapers, but the unfortunate thing is you're not able to monetize that. Can everybody help me? How do you monetize it? I have local newspapers. I have a very assertive woman who runs her local newspaper out of her home, and she's after every MP, every local councillor, everyone, to advertise for any event that takes place. So tell me how you monetize these things, how do you take advantage of it?

[John Hinds]

I think print advertising is still the mainstay of most small newspapers, and I would encourage you to advertise in the newspaper. Obviously it's an effective thing. Most newspapers also have a digital platform. Digital advertising is much less lucrative. The challenge of the newspaper industry is it has traded print dollars for digital cents. You get a Google ad and it's a fraction of a cent, so you have to have a lot more Google ads if you want to recover that money that you've lost in a print ad. Advertising is key, and print advertising is a real mainstay, and remains a mainstay as people continue to read print.

[Matthew Holmes]

I would like to add to that quickly.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Sure.

[Matthew Holmes]

The advertising revenue is going directly into the creation of more Canadian content, more Canadian voices, more Canadian news coverage, whereas almost to a T the digital ads go to no content creation whatsoever. At best they might pick up some free Canadian content and put that on their platform.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Jamison and Mr. Merrell, do you have any thoughts?

[The Chair, Conservative, Tom Lukiwski]

Quickly if you could, please, gentlemen.

[Dennis Merrell]

Yes. I'd like to refer to your previous question, though, about how the federal government could justify buying advertising...and obviously the significant numbers of community newspapers and other print publications, and there are a few out there.... What I would say to that, first of all, is I don't think we really expect that the federal government should buy every single newspaper for every campaign. I think it would depend upon what the objectives of that advertising campaign were. We have a Statistics Canada database blended in with our newspaper circulation area so that we can actually target pretty well whatever demographic group the federal government is trying to reach, whether it be seniors, or according to spending on certain services. We're able to help target specific markets that would be beneficial for a particular campaign. I don't think it's about necessarily expecting every single time the federal government has an ad campaign that we should see that ad in every newspaper. I don't think we're saying that. We understand the government has a duty to be effective in how it spends its advertising dollars, and we can help with that.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Unfortunately we'll have to conclude with those remarks. I want to thank all of our witnesses, both those here in person and those by video conference. Your testimony has been extremely helpful. As you know, this committee will be taking a few days to consider all of the testimony given and will be ultimately writing a report, which I'm sure all of you will be very interested in reading. I do thank you for your testimony and your suggestions. It's been very helpful.

Colleagues, we will suspend now for a couple of moments while we prepare for our next witness.

[The Chair, Conservative, Tom Lukiwski]

Colleagues, we'll reconvene now.

We have with us today from Vancouver, via teleconference, Margot Young. She is a professor at the Allard School of Law at the University of British Columbia.

Madam Young, thank you very much for being with us. I understand you have a brief opening statement on Bill C-24. If we can hear that, then we'll go directly into questions from our panel.

[Professor Margot Young, Professor, Allard School of Law, University of British Columbia, As an Individual]

It's a pleasure to be here. I really have three simple points to make. I'll make those quickly and then I'm happy to have a conversation in more depth.

The first point I want to make is that this particular piece of legislation really doesn't, as far as I can see, have much to do with gender equality. On its face, what it does is some reorganization and arrangement of ministerial categories and pay associated with that. That may very well be an important logistical or administrative matter for issues of cabinet governance and allocation of responsibilities, but I have trouble seeing how this is really about substantive gender equality.

As someone who has spent a lot of time thinking about gender equality, about how we capture it in a full, substantive sense, how we express it in legislation, how we understand how gender inequity plays out, I don't see this bill having this as its central core or heart.

The second point I want to make is that to claim that it is about gender equality is dangerous. I think it's dangerous because too often we cut off the really important, substantial, and tough conversations about gender equality by claiming that we've already dealt with it and we've dealt with it in some more formalistic way. I think to point to this legislation and say that the expansion of categories that get the same pay level is actually dealing with gender equality is to essentially short-sheet the conversation.

The third point I want to make is that dealing with gender equality, and in particular dealing with the issue of gender equality in leadership positions, is more subtle and I think more heavily engaged with tax. The issue with respect to cabinet equality is a small set of the larger issues of the disproportion of men in leadership positions across Canadian society. So, we have one piece of that leadership picture that is definitely characterized by the under-representation of women in leadership positions.

Dealing with the issue of gender equality in the cabinet has to do, I would say, with some softer forms of law and policy. It has to do, of course, with the appointment process, how many women are appointed, what positions those women are appointed to. I feel that I am reiterating some really obvious points here.

Pay equity is a piece of but not the whole of gender equality. People want these jobs and women need these positions of leadership, not because of the actual amount of dollars, but because of the responsibility, the profile, the prestige, the authority that those positions command.

Matters that deal with gender equity in cabinet composition will be different and will engage more directly, explicitly and obviously, with notions of who gets appointed to what particular positions in the cabinet, what cabinet culture is like, all the ways in which we know women are excluded from positions of leadership.

This may be an essential piece of housekeeping legislation, but I think to frame it as a piece of legislation that speaks substantively to the issues of gender equality and cabinet composition is wrong, and it's dangerous.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, and I appreciate your economy of words, Professor.

We'll go to our seven-minute round of questions.

Mr. Peterson, for seven minutes, please.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Before I get into my intervention, I'd like to take a moment, Mr. Chair, to commend you for your speech in the House last week on the retirement of our colleague. The words you said were nice; they showed the great regard that you held for Judy. I think all members on our side of the aisle were impressed with your candid and frank words, and it meant a lot to a lot of people. You brought tears to many people's eyes.

I wanted to show appreciation for those kind and generous words last week. I wanted to make sure we formally thank you for that.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I appreciate, Professor, your indulging me for a few seconds so that I could commend our chair for his conduct last week.

I don't disagree with anything you've said. I'm not sure the purpose of this bill was at all to express gender equality. In my opinion, it elevates certain ministries and shows the importance the government has to that subject matter. You look at La Francophonie, the Minister of Status of Women, and Science, these departments are all now given full ministerial status, which I think is an important part of Bill C-24. It technically is, as you correctly alluded to, a legislative housekeeping bill. I don't think it's meant to be a tool that's going to address gender inequality, pay equity, or any of the other issues you raised in your opening.

Maybe the chair will indulge us a little since we have the professor here. Could you elaborate on some of the research you're doing? These goals are very laudable, and we appreciate them. I'm going to go to the framework of the technical...Bill C-24, and maybe some of the research you're doing, some of the objectives you see, and what goals a federal government should be striving for in this regard.

[Prof. Margot Young]

Thanks. You've definitely opened the conversation up, and I'm going to take a piece of that opportunity, but not a whole chunk of it.

I did think about what we would want the federal government to do. I want to reiterate the point that it's critical to be clear about what is or isn't a gender equity measure. To loosely categorize legislation that essentially isn't really about gender equity as responding to a gender equity concern is, as I said before, dangerous because it obfuscates the fact that something that substantively makes a real difference isn't being done. Framing this as a bill that somehow addresses issues around gender equity in the current cabinet composition is a mistake, and it's a mistake of significant ideological character. I want to make that point clear.

In terms of what the government can be doing, there are lots of things governments can do. I'm going to narrow it specifically on the issue of women and leadership, and women in cabinet positions. One of the ways the government can show leadership in a substantive way is to talk more fully about what gender equity is. I have to say, to respond to a question about women in the cabinet by saying simply “because it's 2015” loses a key leadership moment to articulate and shape opinion about what it means to actually have women in positions of equality, in positions of leadership and power.

The framing of this legislation I think is, at minimum, a lost opportunity to do some important public education and show some leadership on substantive measures such as thinking about whether you want to have a kind of quota system, a formal commitment every time in some way the government binds itself through some form of policy statement—or even a bill like this—to equal representation of gender, or thinking about the range of particular cabinet positions that are being given to women, or about the placement, for example, of the ministry for Status of Women in the hierarchy.

This bill doesn't remove categories; there isn't now just one type of minister. If you parse this bill in light of other pieces of legislation with which it interacts, you have three differently constituted or statutorily defined categories. To engage more fully with the positions that women are occupying and have that conversation more explicitly is an important piece of dealing with gender inequity in leadership. To prioritize pay equity for women more broadly across Canadian society and not simply in terms of women in the cabinet, to move that up on the legislative agenda, would show the kind of commitment that some of the rhetoric around this legislation professes to adhere to.

Really, there's no gender substance, no equity substance on the basis of gender equality, to this legislation. It's important not to talk about it as if that's what it's about, and to talk about where the decision points are, in terms of changing the profile of women's participation in leadership.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I appreciate that.

I don't think anyone was proposing that this was a gender equity bill. I know I haven't. I'm not sure if any of my colleagues have. We're elevating key, important portfolios based, I think, on their subject matter.

[Prof. Margot Young]

Well, my understanding was that some of the material in the press release mentioned this as a gender equity measure. It's really that framing of the bill that I'm assuming the government did purposefully. That's what I'm speaking to.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I just thought it was a mere housekeeping piece of legislation that would allow us to elevate some key portfolios into full ministerial status.

Again, however, that doesn't take away at all from the important points that you're raising.

There is about a minute left so it's kind of awkward, but could you take some time to talk about some specific legislation, policies, that you'd like to see come forward that would help achieve the goal of gender equity and equality? I hate to put you on the spot; maybe you haven't even thought about it.

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, Professor, it will have to be a very brief answer, but please, go ahead.

[Prof. Margot Young]

I can be brief.

First, I'll mention pay equity legislation: move it up on the legislative agenda. Second, there are real problems with employment insurance in terms of access to parental and maternity leave and basic unemployment insurance benefits for women because of the way their involvement in the precarious labour sector works out in terms of the number of hours they need to qualify.

Those are key issues that have been identified for decades. I've heard them criticized at the United Nations in its periodic reviews of our human rights commitments to women's equality. There is no excuse not to get on that now, especially now that you're a government that's doing gender analysis of its budget.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you. I appreciate those comments.

[The Chair, Conservative, Tom Lukiwski]

We'll now go to Mr. McCauley for seven minutes, please.

[Kelly McCauley, Conservative, Edmonton West, AB]

Welcome, Professor. My wife and I are both ex-UVic people, so it's nice to see someone from UVic, although I know you left a while ago.

[Prof. Margot Young]

My heart is still at UVic.

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm glad to hear that.

We heard earlier from one of my colleagues that this bill is not about gender equity, but I have a press release, dated September 17, from the leader of the government in the House of Commons entitled “Government of Canada to formalize the equal status of ministerial team”. It says that being committed to creating a one-tier ministry recognizes the equality of all cabinet ministers. So it is, I think, all show, as you were saying, about gender equality.

You talked about changing the profile of leadership in the government. We hear so much about gender equality in the cabinet when we know it hasn't actually happened. I'd like your take on that. Despite all the bragging, we see, for example, that in the case of parliamentary secretaries that there are 25 men and 10 women in the government. With respect to committees, of 27 committees, only four are chaired by women and only three are vice-chaired by women, including our own Ms. Ratansi. Can we have your thoughts on this government that claims to be about equity when we see in the cabinet itself that the junior ministers were all ladies, and then in the committee and parliamentary secretary positions....women... In the parliamentary secretary positions, it's mostly men again.

[Prof. Margot Young]

Well, that's a leading question because of course that's a real concern.

[Kelly McCauley, Conservative, Edmonton West, AB]

I meant about changing the profile of the leadership.

[Prof. Margot Young]

I think a very important point to make is that the substance of gender equity is going to take much harder work and some redistribution of who has power and who gets access to resources in these positions of leadership. To claim that you've reached gender equity when it's observable that the positions at the top of the power hierarchy are disproportionately filled by men and those at the bottom are filled by women is simply, I think, to obfuscate and to skip doing the very hard work that a substantive commitment to gender equality requires.

The data on women in leadership are stark in their representation of a significant gender gap in leadership, and that leadership gap is not simply a gap in pay. It's a gap in power, resources, who gets to shape the terms of debate, and who is involved in the key decisions in our society.

An important site for this, of course, is the House of Commons. It goes back to how many women we elect and how many female candidates parties nominate to be elected. We are not a country that leads in flat numbers of women's participation in the House of Commons. Clearly, participation in committee structures and leadership positions in those committee structures similarly echoes this same problem of an absence of women in positions of leadership.

I looked for newspaper articles on this bill. Nobody is really engaged with it, because it is piece of housekeeping. It's a little technical in how it describes the different categories of ministers that get set up in their relationship to pay scales. The point is that it is true that in the arcane details of administration we have to give effect to gender equality. It's also the case that we really have to engage with the substance of gender equality, and not simply pass off a tinkering or shifting of categories as having engaged with that substance.

It's revealing that there's no discussion of gender equality in this amendment. It would be inappropriate. This is really not about the balance of power between men and women. It's about the structuring of ministerial authority and titles. The only piece you can find in here that you could spin into a conversation about women's equality is where the Ministry for the Status of Women is placed and why it's not a more free-standing ministry. That's one conversation you could have about the profile, the responsibility, and the resources of that particular ministry. Otherwise, this is not a bill about gender equality.

I'm sorry. I'm talking into your seven minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

No, that's fine. We're here to listen to you and not the other way around.

In other words, had the government appointed an equal number of male and female ministers and an equal number of male and female ministers of state, would you have considered the cabinet itself—not the parliamentary secretaries and not the committees but at least the cabinet itself—as being gender equal?

[Prof. Margot Young]

No, I wouldn't. I would look at what particular ministries women were occupying. There is a hierarchy of ministries that is important and profiled more heavily, and we've had some—

[Kelly McCauley, Conservative, Edmonton West, AB]

Is it cynical for the government to say they have gender equality with the current set-up, when we see the Minister of Finance is a male and the minister of state positions, for the first time in the past five governments, are 100% female in the junior positions? Do you think it's a bit cynical to be claiming that, when—as you said—the big ministries are stacked with men and the tiny former ministers of state ministries are now women?

[Prof. Margot Young]

I would say it's dishonest.

We spend a lot of time in law thinking about what kinds of arrangements constitute equality in the world. A notion of substantive equality is juxtaposed with the idea of formal equality. Formal equality is a hollow shell of form, where you can cast an appearance of equality, but when you look at how things play out on the ground, who has resources, who has profile, who has power, and whose voice counts more, you don't have equality. Substantive equality, where you look at things in context, which in this case of cabinet formation would mean looking at what particular ministries. Who's in Finance? It matters. Who's in Justice? That's a great appointment from many aspects of—

[Kelly McCauley, Conservative, Edmonton West, AB]

It's a great disservice to claim that it's equal when it's clearly not. We can say the pay is equal, but the levers of power are not.

[Prof. Margot Young]

It's not the sense of gender equality that anybody who's an expert in the area would say—

[Kelly McCauley, Conservative, Edmonton West, AB]

I think your word “dishonest” is a good way to sum it up.

[Prof. Margot Young]

The danger—and I keep coming back to this—is that if we shut off conversations by pointing to form and ignoring substance, we're not going to change the world. We're going to just cement it in its current unequal cast and foreclose the kind of conversation we need to have.

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm out of time.

Thanks very much. I hope to get back to UVic one day.

[The Chair, Conservative, Tom Lukiwski]

We'll now go to Mr. Blaikie, for seven minutes, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much for agreeing to testify at committee, Dr. Young.

Thank you also for making what I think is a pretty clear distinction between efforts to establish gender equity within cabinet and government largely, and the kinds of administrative aspects that this bill deals with in terms of creating categories—a minister, etc.

I will remind some of my colleagues across the way that at the second reading debate of this bill, a theme of Liberal speeches was that this was a way to promote gender equality within cabinet. If that's not the case, fine, but that wasn't the impression one had in listening to government members speak to this bill at second reading. That is why it's part of the discussion now.

Certainly I think part of the way that this whole thing came up—even in terms of adjusting the administrative details of cabinet composition—was because there was a big story after the cabinet was originally announced, in November of 2015, noticing that all five junior minister portfolios were occupied by women, and they weren't necessarily being paid the same. That's what initiated the criticism of the cabinet appointments. It was to be a good news story, but ended up not being one. Subsequently this legislation came along in order to say, “Well actually, all ministers are equal.”

There does seem to be some equivocation between equal ministers in the sense of gender equality, versus equal ministers in the sense of status around the table. I'll defer debate on the administrative components, because a minister for whom a department is designated doesn't seem to be substantially different in status from a minister of state, except in name only.

I want to ask you, because the legislation is open and we are talking about.... I think most of us around this table, if not all, would affirm that gender equality in cabinet is an important goal that we're still working toward.

The legislation is open. Are there things we could do in terms of amending these acts that are touched by the bill in order to build in aspects of gender equality to the cabinet-making process? Are there amendments we could make that would speak to gender equality in this bill?

[Prof. Margot Young]

Yes.

There are always things you can do legislatively—in some sense as much as Parliament can bind itself—to express formal commitments to a particular kind of decision-making process and a kind of accountability in that decision-making process. The government could commit, in preambular words or in actual textual provisions, to gender equity. It could say something about the kind of ministerial positions it will seek to have women fill. It's not rocket science. That's actually one of the things that concrete measures call for in terms of increasing representation of under-represented groups.

People talk a lot about affirmative action. It's actually a continuum of things that you can do. The government could look across the continuum at efforts to get more women on the government side and the other parties sitting in the House, to begin with, from which cabinet members are selected. They could make some statements—as I said, either preambular or in the text of the bill itself—about a commitment to institutionalize a rule of 50% gender representation.

These are not things that are unthinkable. They're very easy to do. They're harder to do politically, of course, than simply saying something in a press release about a commitment to gender equality, or than simply saying “Because it's 2015.”

We need more leadership. We need more substantive education and commitments that have some toughness to them to really be able to claim that we're a feminist government.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

There are things at this table that we can recommend in terms of the legislation.

If it's your view that there are equity gaps in the current cabinet composition because of the assignment of particular ministries and the way they're distributed among men and women, notwithstanding any legislative changes, what could the Prime Minister do at the cabinet table tomorrow to correct some of those equity issues?

[Prof. Margot Young]

That's really the key observation here. The decision moment at which gender equity is struck or not is the selection of the cabinet itself, and that's a prime ministerial power and competency, and that's where commitment to gender equity tells, who you put into finance and so on.

I've never been prime minister, but I'm assuming it's a tough decision to pick your cabinet colleagues, and there are many factors that go into it. Importantly, I think gender and also other kinds of representational issues should be prominent, but they're not the only ones. I think it's important how we talk about this, and I also think it's important that we don't pretend we've up-ended tradition when we actually haven't, because that is a huge impediment to change and to truly moving away from a sexist tradition.

It's not as simple as saying, “Okay, Prime Minister, tomorrow change the cabinet and make sure the minister of finance is a woman”, but it is to say that that's where the power and the decision-making reality lies. It is not to displace it into other sites and say we've dealt with it now.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Since November 2015, there have been a few small cabinet shuffles.

[Prof. Margot Young]

Yes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Do you think those were missed opportunities, given that there was a large public discussion about whether the Prime Minister had succeeded in achieving gender equity in his initial cabinet appointments? He's made a few shuffles since. Were those missed opportunities to address what had come up in the kind of civil discourse as failings of the Prime Minister's initial choice?

[The Chair, Conservative, Tom Lukiwski]

A short answer, if you could please, Professor.

[Prof. Margot Young]

I think there were some opportunities taken, and some obviously missed. We haven't ended up after those cabinet shuffles with a cabinet that, in terms of power profile, is gender equal, so you could say they didn't address that.

The real point is also how we talk about what we're doing and how we follow through that talk with what we actually do. I'm just going to keep circling back to a point I continually flag, which is don't describe something that is clearly not about gender equality as speaking to gender equality. That's disingenuous, and it also risks completely short-ending what has to be a more substantively effective conversation in Canadian society, at all these leadership points and elsewhere, about how we actually change in more than merely form.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Now we'll go to our last seven-minute intervention, our prime minister-in-waiting, Madam Shanahan.

[Voices]

Oh, oh!

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

You're too nice, Mr. Chair.

Does the witness have access to simultaneous interpretation?

[Prof. Margot Young]

No, I don't. I am sorry to say that, and I don't speak French well enough to try.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I'll tell you why I wanted to address you in French, because I am old school. I call myself an old-school feminist from Quebec. In the 70s, we were marching on the street, solidarité, take back the night. The struggles were huge, they were real, and I'm very proud of having taken part in those early years of the feminist struggle in Quebec. As an old-time feminist, an old-school feminist, as I like to call myself, I did learn early on that Rome is not built in a day and it's incremental steps that get us to where we are going. I look forward every day. 2015 was a big year for gender equity in the cabinet, and I look forward to coming years 2017, 2018, 2019 and so forth.

Let me simply say, Professor Young, I am so thrilled to be sitting here today and to hear my male colleagues speaking so enthusiastically and passionately about gender equality, because I think you know and I know, maybe we're not quite the same generation, it was not always the case.

On that note—

[Prof. Margot Young]

I was in the same 70s as you were.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

That's fantastic. This is the kind of thing I'd love to have more time to talk about.

I want to follow up on this idea of power profiles in the different ministries. Justice, Global Affairs, Labour, Public Services and Procurement—all these ministries are headed by women. There are also the emerging power ministries like Environment, and Indigenous and Northern Affairs, which is now so powerful it has two women ministers. This is going to be a powerhouse in years to come. My favourite is Diane Lebouthillier, Minister of National Revenue, because we share a common financial education and a common purpose of making a fair tax code.

I was looking at the ministries affected by this bill—Science, Small Business and Tourism, Sport and Persons with Disabilities, Employment and Social Development, Status of Women, La Francophonie—and I want your thoughts on this. These ministries deal with emerging and evolving social issues such as developing human potential, ensuring that everyone has an equal opportunity to participate in our wonderful Canadian society, and achieving personal and financial well-being. Are these really junior ministries, or are they emerging ministries?

[Prof. Margot Young]

There are a number of points I'm going to take up with what you said. You began by talking about change being incremental, and I think that's right, but I think we get incremental change because we push for more. It's never enough to say that we've done a little and we'll rest on those laurels. I don't think we should misdescribe incremental change as major change. It's important that we recognize incremental as incremental. I know how change comes in the world, practically, but I also know that we spur even incremental change by having a good critique.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Would you say it's best bottom up or top down or a mix of the two?

[Prof. Margot Young]

I think it really depends on what you're talking about, how you effect change in particular contexts. When you talk about cabinet composition, it's clearly top down. You need a prime minister who's committed to putting women into positions of power.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

So it's top down, yes.

[Prof. Margot Young]

I would say it's contextually configured, and I think we get more incremental change by asking for more than incremental change. That was the first aspect.

The second thing you talked about, the character and the class of emerging ministries, as ministries that we have emerging sensitivities to, or recognition of, as engaging in important societal issues. I'm not so sure that Status of Women rightfully fits into that group. I think we've had ministers responsible for the status of women at federal and provincial levels off and on for some time now, but I'm not sure what the import of that observation is. What difference would it make if these were emerging ministries or not? Is that to get away from their characterization as junior ministries?

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Let me get to my next point, which I think is more in the wheelhouse.

The Auditor General issued a report two years ago concerning gender-based analysis plus, which said that it was not being used consistently in cabinet memos.

As a member of the public accounts committee whose vice-chair is a woman—if that makes any difference and it really doesn't—I know that it was the recommendation of our committee that GBA+ be made mandatory, which I believe is the case now. GBA+ is a tremendous instrument, as you well know, Professor, to help in developing policy that makes sense for all social groups and to make sure that we're developing the best possible policy.

I'd like to hear your thoughts on whether this makes a difference, whether these emerging ministries are using GBA+, and whether that is going to result in better government social policy for Canadians.

[The Chair, Conservative, Tom Lukiwski]

Again unfortunately, Professor, please make it a very short answer, and I apologize for the brevity but we're running into a time crunch here.

[Prof. Margot Young]

No problem. I think this is a different issue from the one about how we characterize the set of amendments currently before us, and of course gender-based analysis is an important component of sound policy-making. I will add only, since I think I don't have any more time, that it's really important to do a gender-based analysis, but it's also really important to change policy that responds to that analysis and its results afterwards. So I would point to you issues like employment insurance legislation, child care, and pay equity as programs that should respond on a higher priority to what gender-based analysis tells us is the outcome of certain standard legislative arrangements as they exist.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Colleagues, we won't have time for a full round of five-minute questions, but we will have time for two five-minute interventions. We'll go first to Mr. Shipley for five minutes please.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Ms. Young, for coming. I was involved a number of years ago in terms of pay equity with a municipality. Am I correct that a key principle of pay equity is equal pay for equal work of equal value?

[Prof. Margot Young]

Equal pay for work of equal value. There's a difference between pay equity and equal pay, and what pay equity gets to is looking to a more contextualized substantive analysis of the value, the character of work, as opposed to simply the form of job title.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

So it's inclusive of those three. Quite honestly, I think what you're saying is this bill doesn't have anything to do with gender equity, but as mentioned by my colleague and as we know, this is very much for the government about pay, about gender equality. That's what their discussion has been all about. Does anything in the current law add responsibilities or powers to the current ministers of state who are by this legislation to be listed as full ministers with full salaries? Are there added responsibilities because, as we know, full ministers have deputy ministers, they have departmental budgets, they have additional responsibilities. Do you see anything in this legislation that supports that for the ministers of state?

[Prof. Margot Young]

No, I don't I don't think the legislation speaks to that. But I don't want that comment to then be used to imply that this is a piece of legislation that instantiates pay inequity because it's paying equally across unequal jobs. I don't think that's really one of the best uses to put our virtues and support of equality in favour of.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Let me take a situation then. You have a company, it might be a small business, it might be a large business company. So there's a president and a vice-president. In the example used in the House it wouldn't matter if you were the president or the vice-president, or someone else, you actually have the same pay even though your responsibilities in terms of that company are different. Would it make sense to be fair that the vice-president be paid the same salary as the president of the company because of the added responsibilities of the president?

[Prof. Margot Young]

I can't answer that question, I think that's too decontextualized and I think that the discourse of pay equity, the value of pay equity, is not concerned about bringing people's pay down. It's concerned about people who are paid unequally in a way in which they would complain about. So to take this conversation we're having about gender equity and turn it into a conversation that we're overpaying this particular category of ministers, I'm not sure that's the right conversation to be had about this bill.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I'm just asking about responsibilities in terms of what a position does. So I'll take your comments to the next. Is there anything in the current law that prevents or prohibits the prime minister from appointing a gender-equal cabinet?

[Prof. Margot Young]

No.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Help me then understand if there isn't that need why is it important now to bring legislation to enforce it if it's not about gender equality? The opportunities are already there. In fact, in terms of the one comment about emerging ministers, I'm not so sure the former minister of health who now has the state of secretary to indigenous affairs is an emerging minister. She already was one.

[Prof. Margot Young]

I am not sure that I fully understand your question. If you are saying something other than what I am saying—which is that this bill is not about moving us forward in terms of gender equity—I am not sure what that is. But if what you are saying is that this bill is not about gender equity in any substantive way, I totally agree with you.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

No, it's all about gender equity. That's what the government has been talking about ever since these discussions happened, and it happened in the budgets that have come forward.

I don't know where my time is.

[The Chair, Conservative, Tom Lukiwski]

That's a good segue. You're out of time, unfortunately.

Thank you.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much.

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, the last speaker I have on my speakers list, Monsieur Drouin, is no longer with us.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I took over his part.

[The Chair, Conservative, Tom Lukiwski]

Madam Ratansi, go ahead, please, for five minutes.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you, Professor, for being here.

I was as confused as you were about why we are even talking about gender equity. These are changes to specific sections of the Salaries Act. I am reading from the press release, which says:

The Leader of the Government in the House of Commons, the Honourable Bardish Chagger, today introduced legislation to amend the Salaries Act and equalize the status of the government's ministerial team.

Basically, we are creating one tier, a commitment to one tier. There is nothing in the news release that talks about gender equity. There are ministers of science, small business and tourism, sport and persons with disabilities, and the status of women. All these are going to be equalized, because we want to ensure that there are not two tiers.

You have been brought here to talk about gender equity. I would have loved to have you at the Standing Committee on the Status of Women when I was the chair and we looked at violence against women and economic security for women, ensuring that women have the best ability, because we know that, despite all our incremental efforts, women still earn 71 cents to a dollar. As a professional accountant, it was my duty to ensure that we looked at gender budgeting, etc. I would have loved to have you in 2006, when I was the chair. Unfortunately, that's not what we are doing.

I thank you for being here, but I don't think we have the relevance to our study for Bill C-24, to amend the Salaries Act and make a consequential amendment to the Financial Administration Act, which would mean equalizing these ministers and ensuring that they get equal salary.

If you have any additional points to make.... They would not be regarding this bill, because it is irrelevant to what you are saying. There is nothing that says it is a gender-balanced bill; there is no indication that it has anything to do with gender equality. I think we are talking at cross-purposes and probably confusing our study.

[Prof. Margot Young]

I have two responses to make to that. One is that the broader context into which that press release is released definitely makes a link to gender equality by the use of the term “equalize”. I guess, as well—

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I disagree with you.

[Prof. Margot Young]

I have one more point. I think it's really important that issues about gender equity come up in the context of the Standing Committee on the Status of Women, but I also think that they are not confined to that. That doesn't speak to your claim that this bill really has no profile around gender equity, but it is not inappropriate to talk about it in the context of this committee. That's part of gender mainstreaming, to which your government is committed—that any legislative changes be gender-accountable.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Bringing it to one tier does not mean.... If the Minister of Science were a man, would it mean that it brings gender equality? This bill has nothing.... In fact, I am looking at the press release on Bill C-24, and there is absolutely no mention of gender equality in that. Let's not be disingenuous and try to say that this has anything to do with gender equality because it is bringing all ministers to a level playing field. There is no junior minister anymore. Whether you are Minister of Sport and Persons with Disabilities.... This is Minister Hehr, who is a male. Are we making him gender-equal?

I think we are off topic and there has been a confusion about somebody bringing a witness focusing on gender equality, when we are not dealing with gender equality in the Salaries Act.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

With that, colleagues, it is time to conclude by thanking our witness for being here.

We appreciate your time very much. Should you have any other observations or suggestions that you wish to bring to the attention of this committee, we would encourage you to please submit anything that you have to the clerk of this committee.

[Prof. Margot Young]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Once again, thank you for taking the time. We appreciate your appearance.

Colleagues, we are adjourned.