Mr. Speaker, this morning we have been listening to presentations from Reform Party members. They have presented us with a large collection of suppositions, perceptions and attributions. Many of them are based on personal feelings, personal perceptions and misguided information. Clearly it is a position which would result in the death knell of the magazine industry in Canada. It would mean the loss of thousands of jobs. Millions of dollars would be taken out of the economy. That is the present position of the Reform Party.
Reformers are slow learners; there is no doubt about it. We know that one of the characteristics of an effective learning model is the use of repetition. My Liberal Party colleagues have clearly pointed out some very hard core facts which support the need for Bill C-103. It is through repetition that I will continue to present the facts. I hope Reform Party members will be able to handle the data in a much more effective and positive manner and will see the need for support by the Canadian people of the Canadian magazine industry.
The key messages in Bill C-103 clearly point out that the commitments of the government made on December 22, 1994 will be supported. This is not a new policy. It is merely an extension of the government's longstanding policy to support the Canadian magazine industry, to channel Canadian advertising revenues to Canadian magazines and not to American magazines. These measures are not intended to restrict foreign magazines from access to the Canadian market. In fact our market is wide open to publications from all over the world.
It is the government's view that the proposed bill is consistent with our international trade obligations. As a result, no one south of the border should be disturbed by the actions of the government.
The hon. Minister of Canadian Heritage has clearly pointed out that the new excise tax is not a new consumer tax. I must repeat some hard core data for this effective learning to take place.
What is a periodical? A periodical is published more than once a year but not more than once a week. It does not have more than 70 per cent advertising content. It is available to the general public.
For the fiscal year 1993-94 a Statistics Canada survey reported on over 1,300 titles. The survey covered six types of periodicals in Canada. The general categories were: general consumer magazines, special interest consumer magazines, business and trade magazines, religious magazines, farm magazines and scholarly magazines. There we have in six categories publications in this country covering the field, tailoring to the needs of every man, woman and child.
Dealing with the hard core data, according to Statistics Canada advertising revenues fell to $485 million in 1993-94, an 8.3 per cent drop from the previous year and a 14.3 per cent decline since 1989-90. From 1985 to 1991 periodicals saw their market share of advertising dollars drop from 6.6 per cent to 5.7 per cent, a clear indication that the Canadian government must do whatever it possibly can do to change that movement.
Advertising revenue is crucial to most magazines. It supports the cost of the editorial content and makes it possible for the publisher to provide the magazine at rates the reader can afford. In some cases, believe it or not, it provides the magazine at no cost to the reader. Approximately two-thirds of all revenues of Canadian magazines come from the advertising area. The main thrust of federal magazine publishing policy has been to direct Canadian advertising revenue to Canadian magazines.
The effect of the recession on advertising revenue has been quite serious for the Canadian magazine industry. However Canadian companies have been very effective in competing even though the recession has taken place.
The magazine industry has demonstrated a remarkable resilience in the face of a decline in advertising revenue. Periodicals have managed to earn profits and to increase them recently by keeping a tight control on costs. Since 1989-90 some cost cutting has been achieved by reducing the number of full time and part time employees. As well the use of contract work has increased. Salaries, wages and fees fell 3.9 per cent in 1993-94. Non-salaried costs fell 6.8 per cent during the same year and dropped 16.5 per cent during the previous four years. Clearly that is action of responsible companies.
During the past five years profits before tax as a percentage of total revenue has ranged from a low of 2.1 per cent in 1990-91 to a high of 5.7 per cent in 1993-94. Profitability varies by category with business and trade periodicals earning the most profits and religious periodicals earning the least.
As reported by Statistics Canada, paper costs will likely have a profound impact on periodicals in the near future. According to the industrial price index, paper prices rose 26 per cent in the first four months of 1995 compared with the same period last year.
It is clear the magazine industry faces challenges on a number of fronts: increasing competition for audience attention, increasing competition for the advertiser's dollar, the need to adjust quickly to rapid price changes, and rapid technological change. The role of government policy has been to provide an environment in which magazines can meet their challenges.
A range of government policy and program instruments have been put in place and will continue to be supported by the industry as well as by the government. These instruments include: section 19 of the Income Tax Act, tariff code 9958, grants through the Canada Council, the postal subsidy for paid circulation Canadian magazines, and the lending programs offered by the cultural industries development fund.
The Canadian magazine industry is an important pipeline between the generators of Canadian information, ideas, views and the Canadian public. As noted by the O'Leary Royal Commission on Publications in 1961, magazines "can protect a nation's values and encourage their practice. They can make democratic government possible and better government probable. They can soften sectional asperities and bring honourable compromises. They can inform and educate in the arts, the sciences and commerce. They can help market a nation's products and promote its material wealth. In these functions it may be claimed, claimed without much challenge, that the communications of a nation are as vital to its life as its defences and should receive at least as great a measure of national protection".
I could not have said it better. The government recognizes the importance of periodicals in Canada for and by Canadians, much as it did over 30 years ago when the O'Leary report was completed. We will continue to support the industry by implementing appropriate structural measures such as the ones proposed by the recent task force on the Canadian magazine industry.
Bill C-103 is a key element in continuing that support. Therefore I urge all members to ensure the bill is quickly passed.