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INTERIM REPORT ON THE CANADIAN NEWS MEDIA

Standing Senate Committee on Transport and Communications

Fourth Report

Chair: The Honourable Joan Fraser
Deputy Chair: The Honourable Leonard Gustafson

April 2004

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MEMBERSHIP 

The Honourable Joan Fraser, Chair
The Honourable Leonard J. Gustafson, Deputy Chair

and 

The Honourable Senators: 

Willie Adams	Janis G. Johnson
*Jack Austin, P.C. (or William Rompkey, P.C.)	Laurier L. LaPierre
Eymard G. Corbin	Pana Merchant
Joseph A. Day	Gerard A. Phalen
John Trevor Eyton	* John Lynch-Staunton (or Noël Kinsella)
B. Alasdair Graham, P.C.	Mira Spivak

* Ex Officio Members 

In addition, the Honourable Senators Raynell Andreychuk, Norman K. Atkins, Tommy Banks, Gérald A. Beaudoin, Catherine Callbeck, Pat Carney, P.C., Gerald J. Comeau, Joan Cook, J. Michael Forrestall, Jerahmiel S. Grafstein, Elizabeth Hubley, Mobina Jaffer, Serge Joyal, P.C., Raymond Lavigne, Marjory LeBreton, Rose-Marie Losier-Cool, Paul J. Massicotte, Jim Munson, Donald H. Oliver, Lucie Pépin, Marcel Prud’homme, P.C., Pierrette Ringuette, Nick G. Sibbeston, Herbert O. Sparrow, Peter A. Stollery, Terry Stratton, and David Tkachuk were members of the Committee or participated in its work at different stages of this study during the Second and Third Sessions of the Thirty-Seventh Parliament.

Research Staff:

David Black, Special Advisor to the Committee
Joseph Jackson, Analyst, Library of Parliament
Terrence Thomas, Analyst, Library of Parliament 

Till Heyde
Clerk of the Committee 

NOTE:  Jasmine Solomonescu, Researcher with the office of the Chair, also contributed to the Committee’s research program.  The Committee also recognises the particular contributions of Céline Ethier, Helen Krzyzewski, and Mirella Agostini, with the offices of the Chair, Deputy Chair, and Clerk, respectively.

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ORDER OF REFERENCE

Extract from the Journals of the Senate of Friday, 13 February 2004: 

Resuming debate on the motion of the Honourable Senator Fraser, seconded by the Honourable Senator Joyal, P.C.:

That the Standing Senate Committee on Transport and Communications be authorized to examine and report on the current state of Canadian media industries; emerging trends and developments in these industries; the media's role, rights, and responsibilities in Canadian society; and current and appropriate future policies relating thereto; 

That the Committee submit its final report to the Senate no later than Thursday, March 31, 2005; and 

That the papers and evidence received and taken on the subject and the work accomplished during the Second Session of the Thirty-Seventh Parliament be referred to the Committee.           

            After debate, 

The question being put on the motion, it was adopted. 

Paul C. Bélisle
Clerk of the Senate 

NOTE:  Except for the final paragraph, this Order of Reference is identical to the Committee’s Order of Reference for this study during the Second Session of the Thirty-Seventh Parliament, adopted by the Senate on 19 March 2003.

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TABLE OF CONTENTS

PART I:  INTRODUCTION

PART II:  THE STATE OF THE CANADIAN NEWS MEDIA

A.  The Print Media

1.   Daily Newspapers

a)   Ownership and Circulation

b)   Ownership and Titles

c)   Readership

2.   Weekly Newspapers

3.   Magazines and Periodicals

a)   Type of Publication

b)   Ownership

B.   The Broadcast Media

1.   Radio

a)   Private Radio Ownership

b)   The National Public Broadcaster

c)   Radio Listening Data

2.   Television

a)   Trends in Ownership

b)   Viewing Share by Ownership

c)   Viewing Preferences

d)   News and Information Programming

e)   Viewing Data

f)    Expenditures on Canadian News and Information Programming

C.  Wire Services

D.  The Internet

a)   Internet Usage Data

E.   Ownership Structures

1.   Laws and Limitations

a)   Horizontal Concentration

b)   Vertical Integration and Cross-Media Ownership

c)   Foreign Ownership

2.   Overall Trends in Canadian Ownership

a)   Horizontal Concentration

b)   Cross-Media Ownership

c)   Market Share

d)   Closely Held Media Companies

e)   Profitability

F.   Journalists

G.  Changes in Reporting

PART III:  WHAT THE COMMITTEE HAS HEARD TO DATE

A.  The Canadian Charter of Rights and Freedoms and Media-Related Law

1.   The Charter and Freedom of the Press

2.   The Basic Positions on Freedom of the Press

3.   Freedom of the Press in Other Countries

4.   Media-Related Law in Canada

5.   Provincial Dimensions to Freedom of the Press

B.   The “Marketplace of Ideas”

1.   Different Notions of the Market

2.   Diversity

3.   The Canadian Viewpoint

a)   Empirical Evidence

4.   Indirect Measures to Promote a Diversity of Viewpoints

5.   The Impact of the Internet

C.  Journalism and the Possible effects of Concentration and Convergence

D.  Policy Issues

1.   Role of Government

a)   The National Public Broadcaster

b)   A National Public Newspaper?

c)   Direct and Indirect Government Support to the Print Media

2.   Self Regulation

a)   Role of Private Sector

b)   Role of Government

3.   Ownership

a)   The Competition Bureau and the CRTC

b)   Concentration

c)   Cross-Media Ownership

4.   Foreign Ownership

PART IV:  NEXT STEPS

APPENDIX:  WITNESSES

TABLES

TABLE 1:  Canadian Newspaper Ownership as a Percentage of Total Circulation, Selected Years, 1994-2003

TABLE 2:  Canadian Newspaper Ownership by Number of Titles and Circulation, 2002

TABLE 3:  Daily Newspaper Readership in Markets Across Canada, 1998-2002

TABLE 4:  2002 Canadian Newspaper Readership by Age (% of population)

TABLE 5:  Canadian Community Newspaper Association (CCNA) Membership by Ownership and Province, February 2004

TABLE 6:  Canadian Magazines by Type, November 2003

TABLE 7:  Canadian Publishers of Two of More Periodicals, December 2003

TABLE 8:  Top Ten Commercial Radio Operators

TABLE 9:  The CBC/SRC Radio Network – 2002-2003

TABLE 10:  CBC/Radio-Canada Audience Shares, 1999-2003

TABLE 11:  CBC/Radio-Canada Audience Shares, Fall 1994-Fall 2002, Canadians Aged 12+ (thousands)

TABLE 12:  Consolidation of Conventional Television Station Ownership, 1970-2000

TABLE 13:  Per Cent Viewing Share for Canada’s Major Television Groups, 1998-2002, Fall – All Persons 2+, 6 a.m. to 2 a.m.

TABLE 14:  Television Viewing Time by Program Type, Age and Gender (%), English and French Television, Fall 2002 (4 Weeks in November)

TABLE 15:  Television Services Available to Canadians with News and Information Programming Content

TABLE 16:  Top Supper Hour News Programs Watched in Selected Canadian Television Markets, 12-18 January 2004

TABLE 17:  Audience Shares for All-News Television Channels Available to Canadians, 1998-2003

TABLE 18:  Expenditures by Canadian Conventional Television Broadcasters on Canadian News and Information Programming, 1998-2002 ($ thousands)

TABLE 19:  Purpose of Internet Use to Access Information in Canadian Households with Internet Access, 2000 to 2002 (%)

TABLE 20:  Most Popular Broadcaster Websites Among Canadians, November 2002

TABLE 21:  Horizontal Concentration Rules in Selected Jurisdictions

TABLE 22:  Vertical and Cross-Media Ownership Rules in Selected Jurisdictions

TABLE 23:  Foreign Ownership Rules in Selected Jurisdictions

TABLE 24:  Canadian Media Cross-Ownership, July 2003

TABLE 25:  Market Share and Cross-Ownership in Nine Local Markets, 2002

TABLE 26:  Controlling Owners (Based on Voting Shares) of Canadian Media Firms, August-September 2003

TABLE 27:  Operating Profit Margin, 1999-2003 (%)

TABLE 28:  Number of Journalists by Type of Media in the French-Language Montreal Market, November 2003

TABLE 29:  Number of Journalists by Type of Media in the English-Language Montreal Market, November 2003

TABLE 30:  Number of Journalists by Type of Media in the Vancouver Market, November 2003

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PART I:  INTRODUCTION

All Men pretend the Licentiousness of the Press to be a public Grievance, but it is much easier to say it is so, than to prove it, or prescribe a proper Remedy; nor is it the easiest Grievance to Cure.

-Daniel Defoe, An Essay on the Regulation of the Press, 1704

            News matters.  Journalism matters.  No real democracy can function without healthy, diverse and independent news media to inform people about the way their society works, what is going well and, perhaps most important, what is not going well or needs to be improved.  The news of the day is always a rough and ready thing, produced in a rush to deadline and inevitably based on imperfect understanding of complex realities, but it is the first guide citizens have to understanding their own community, and often the only such guide that can plausibly claim not to be self-inte rested.

            It follows that in a democracy, it is vital that government policy be established in such a way as to foster healthy and independent news media.  The paradox and the danger lie in the fact that to do their job properly, the news media must be independent from government influence over the news they carry.  It may be worth recalling in this context that the news media are perhaps the only industry to receive explicit protection in Canada’s constitution:  Section 2 of the Canadian Charter of Rights and Freedoms guarantees not only freedom of expression but also freedom of the press and other media of communication.  There are – there will always be – passionate arguments about the precise meaning of freedom of the press, but there is no argument about its fundamental importance.

            So it is with considerable caution that the Senate Standing Committee on Transport and Communications has undertaken this study of Canada’s news media, and of the appropriate stance of public policy at the start of the 21^st century.  The members of the committee are aware that in comparison to most of the world, Canadians have been and are well served by their news media, not only in the provision of factual news but also in the amount and quality of investigative journalism, analysis and commentary.  It is no part of our mandate to imperil that good fortune.  Yet it remains true that a substantial part of public policy does have an impact on the news media.  Some of the impact is of a relatively general nature:  elements of public policy such as general taxation systems, securities regulation, labour legislation, consumer protection rules or environmental controls are not devised specifically to target the news media, although they will have a great impact there as elsewhere.  Other elements of public policy are more directly, though perhaps not exclusively, aimed at the news media:  examples range from libel laws to federal regulation of the broadcasting industry, through the Broadcasting Act and the Canadian Radio-Television and Telecommunications Commission. 

            The question then is not whether public policy should concern itself at all with the news media, it is whether the policies that we now have are the most appropriate ones for the foreseeable future.

            It is 34 years since the Senate examined the state of Canada’s news media, in the landmark report by a committee headed by Senator Keith Davey,[1] and 23 years since the report of the Royal Commission on Newspapers headed by Tom Kent.[2]  Other inquiries have examined the broadcasting system, but have not focused specifically on the news media.[3]  In the intervening years, the world has changed in ways that almost no one could predict in 1970 or even 1981, and few elements of western society have been more profoundly affected by change than the news business. 

            To begin with, journalism itself has changed.  In 1970, journalists could still refer to themselves only half-mockingly as “ink-stained wretches,” with a certain emphasis on “wretches.”  Comparatively few of them had degrees in journalism; indeed it was still true that many had no university degree at all, a fact which was often reflected in miserable pay scales and working conditions.  Today’s journalists are better educated and far better paid.  In many ways standards of journalism and journalistic ethics have improved correspondingly, and there has been an increase in self-imposed accountability to institutions such as provincial press councils.  In other ways journalism has been increasingly affected by the frantic rush to attract or at least retain audiences, often at the price of “dumbing down” the news.  The arrival of all-news television and radio has also changed the practice of journalism, putting increased pressure on journalists in all media to get the news out ever more quickly and often reducing the time available for research or background checking.

            Technological change has transformed both the nature of news-gathering and the ways in which citizens obtain and use the news.  Audiences have fragmented; today no single news source, be it print or electronic, can have the mass impact that the news giants had thirty years ago.  In 1970, cable TV in this country was widely perceived as a way to improve signal reception and import U.S. programming.  Today it is the vehicle to provide hundreds of channels, including Canadian all-news channels in both official languages, even as satellites also beam Canadian and foreign programming directly into homes. 

The proliferation of electronic news sources has contributed to a demographic shift:  younger people are substantially less likely to read newspapers than their elders are.  The new media landscape has also changed the role of Canada’s public broadcaster, the Canadian Broadcasting Corporation; for example, the CBC and Radio-Canada are no longer the only broadcasters serving remote areas of the country, and in the more populous regions they now face competition from more private networks. 

In 1970, the Internet as we know it did not exist; today it brings news from around the world into individual Canadians’ homes at comparatively low cost.  Technological advances have enabled the creation of national newspapers.  Computers also enable Canadian news organizations to communicate with each other, and to share their work with each other, in ways that would make Gutenberg’s head spin; these changes, often referred to under the general label of “convergence,” continue even if the word itself is no longer as fashionable as it was in the 1990s. 

Meanwhile, the great drive for corporate growth and consolidation has affected the news business at least as much as other industries, and changes in media ownership continue apace.  These have led to some serious concerns, particularly among journalists, about the impact of corporate changes on the quality of news and information that Canadians receive.  The effects of globalization also continue to grow, raising questions about how Canadians can continue to have a shared understanding of their communities and their country.  In the words of Mr. Justice Charles D. Gonthier,

The responsibility of the media is ever more challenging in fostering the broad public understanding which is essential to enable us as a society to decide upon our objectives and priorities and plan for the future rather than be adrift on a sea of happenings.[4]

            It is no wonder, in the light of all these developments, that many Canadians should feel some concern about the future of their news media. 

            Unhappiness about one or another aspect of the news media is, of course, not new, as the 300-year-old quotation at the beginning of this introduction reminds us.  Criticism of the news media is as natural a part of democracy as divisions of political opinion, and it is not a Senate committee’s role to investigate individual complaints about news judgments or management.  It is our role to try to assess the broader landscape, in all its dizzying complexity.  To do so, we have striven to avoid reaching hasty judgments.  We have had only a few initial convictions:  that Canadians deserve high-quality news media; that it is important for the citizens of this country to be able to learn about Canadian and world news from a Canadian perspective; and that a diversity of voices is a fundamental part of a healthy democracy.

We have heard from many knowledgeable witnesses and participants in the news media, but many more remain to be heard, as does the general public.  Given the vagaries of parliamentary timetables, our work has had to be interrupted more than once and we have had to postpone our planned travel to hear Canadians in their own communities.  Still, a year after our first hearings, we thought it important to report to Canadians, including our colleagues in the Senate, on the general themes and questions that have emerged so far, and on the work that we know remains to be done.

Because our work is still incomplete, this can only be an interim report.  As such, it will draw no conclusions and make no recommendations.  Our hope, however, is that it will help to inform Canadians about what we have discovered through research and heard in testimony. 

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PART II: THE STATE OF THE CANADIAN NEWS MEDIA 

This section provides a statistical snapshot (using the most recent available data) of what the Committee has learned about the state of the Canadian news media (newspapers, radio, television, the Internet, media ownership and journalists) since it launched its study in April 2003.  It must be stressed that the Committee is well aware that there are many weaknesses with the available data as well as many gaps.  Part IV of this report will make note of areas where further data and analysis are required.

A. The Print Media

1.                  Daily Newspapers

Canadian newspapers have a long and storied history dating back to the mid-18^th century.  The first known Canadian newspaper was the Halifax Gazette, issued on 23 March 1752.  As settlers arrived from Great Britain, France and the United States, the press quickly spread across Canada’s early eastern provinces and, upon the discovery of gold in the 1850s, across its western and northern territories.  By the beginning of the 20^th century, there were 112 dailies, with a total circulation of about 650,000.  By 1913, the number of general interest daily newspapers reached its peak at 138.  By 1953, there were just 89 daily newspapers in Canada; however, by the mid-1980s the number of dailies was back up to 110.  Since then, the number of Canadian dailies has fluctuated between 100 and 110, with about five million Canadians receiving a newspaper each day.