Government Operations Committee on Oct. 3rd, 2017

[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.