Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 1 - Evidence for November 17, 2004
OTTAWA, Wednesday, November 17, 2004
The Standing Senate Committee on Transport and Communications met this day at 6:22 p.m. to examine 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.
Senator Joan Fraser (Chairman) in the Chair.
[English]
The Chairman: Welcome to this session of the Standing Senate Committee on Transport and Communications and the public hearings on the state of the Canadian news media. Our first witnesses this evening are from the Canadian Federation of University Women, which was established in 1919 and represents approximately 10,000 women in Canada.
Ms. Russell, please proceed.
Ms. Susan Russell, Executive Director, Canadian Federation of University Women: It is a pleasure to be here. Thank you for the opportunity to appear before the committee to submit this report in respect of the current state of the Canadian media industries. The Canadian Federation of University Women, CFUW, is the largest of 78 national affiliates of the International Federation of University Women. The CFUW is a women's equality-seeking group that represents approximately 10,000 women university graduates from all disciplines in Canada. Members are active in public affairs, working to raise the social, economic and legal status of women; to seek improved education and environment; and for peace, justice and human rights. CFUW monitors legislation and current issues, takes action on issues of national concern and promotes awareness of existing policies. It is a non-governmental, non-partisan, non- profit, self-funded organization with special consultative status with the United Nations Commission on the Status of Women. As a member of the International Federation of University Women, CFUW has links to other UN agencies and is represented at UNESCO at the committee on education at the Canadian sub-commission to UNESCO. Members of the CFUW address concerns through consideration of resolutions that are extensively researched and debated by members across the country and that become policy when passed at annual general meetings. This presentation will address media rights and responsibilities as they are described in CFUW policy.
Ms. Sheila Clarke, Director of Legislation, Canadian Federation of University Women: It is a privilege to be here and to live in a country where groups from across the country can come and speak with government. It means a great deal to us to be here. Senators have our background brief. Allow me to clarify that my presentation this evening was written by the president of the CFUW. The background brief is research for your information.
The CFUW believes that the Canadian identity may be threatened by current trends toward media monopolies; by possible growing foreign ownership of Canadian media; by cuts to publicly funded media, namely the CBC; and by insufficient protection of copyright for authors, photographers and journalists in Canada. The CFUW is concerned as well about increasing pressures on the Canadian publishing industry. I will address these issues, as stated in the CFUW policies.
We have been following the transcripts of the committee and its interim report for a long time. I was most interested to note that we are one of the few groups who have come without direct connection to the industry. The current concentration on issues of media rights and responsibilities is intense at government levels. You are the third committee to address it in a recent time period. This clearly indicates an important area of debate that will inform the very definition of our country.
The real question is: What path do Canadians wish to follow in preserving their cultural identity? Issues of Canadian ownership of communication sources, including Canadian publishing, have been well covered by the Heritage Canada report; by ``Ownership by Canadians,'' a discussion paper; and by the report from Industry Canada. The first two of those tended to address media rights and responsibilities in terms of Canadian culture and identity. The third one tended to address it in terms of economic development. We hope that they are not completely divergent.
I will begin with the effect of monopolies. I would like to refer to our use of the word ``monopolies'' in our policy. The current lingo is to use the term ``convergence.'' I would call senators' attention to an article by Dr. Rich Gordon from Northwestern University in Illinois, a journalism professor. He wrote a detailed and excellent review of the word ``convergence'' and what it means. It has become widely used with a multiplicity of meanings.
The Chairman: Ms. Clarke, could you give that specific reference to the clerk of the committee before you leave?
Ms. Clarke: I will do that. Media technology is one area where that term is used in convergence of modes. We are familiar with that in terms of convergence of email, Internet, television, broadcast, cable, et cetera.
The other use, in terms of media organizations, is with regard to ownership, to tactical marketing, revenue enhancement, information gathering and presentation. In this sense, the term tends to be mean monopolies and this is the sense of the term we will use primarily.
I will read our resolutions as I go, to integrate them into our background information. With regard to monopolies:
Resolved, That the Canadian Federation of University Women (CFUW) urge the Government of Canada to amend the Competition Act with regard to media industry business practices in Canada, in particular, Section 79 (1) (a) of the Act, where, by changing the word ``may'' to ``shall'' the Act would prohibit monopolies:
Resolved, That the Canadian Federation of University Women study the effects of concentration of ownership in the mass media and take further action, if necessary, to safeguard diversity and freedom of expression in the Canadian press.
I would note that we are drawing on policy from 1997 and applying it because at that time we watched the growing tendency toward media amalgamation with concern. Our concern has not diminished. As media corporations have amassed newspapers, magazines, radio stations and television networks, economies of centralized operations, staffing efficiency, decreased delivery costs and improved advertising coverage have taken place, all of which in today's lexicon are considered to be sound business principles. Dr. Dwayne Winseck of Carleton University writes that:
As a result of these changes Canadians now have one of the most consolidated media systems in the developed world and an unrivalled scale of cross-media ownership. In an amazingly short period of time, cross-media ownership has gone from being the exception to the norm.
When media businesses seek these financial opportunities, it is important to consider how these actions may affect independence of thought, protect copyright of Canadian contributors and preserve Canadian culture and values in the media.
CFUW questions the value of unprecedented amalgamation of companies to the people of Canada, who desire a free, independent and diverse press as guaranteed by the Charter of Rights and Freedoms. Also, this relates to questions of foreign ownership that have been posed by some as an answer to the current concentration of ownership. CFUW notes that the Broadcasting Act states that:
the Canadian broadcasting system shall be effectively owned and controlled by Canadians...no broadcasting licence maybe be issued, and no amendments or renewals thereof may be granted, to an applicant that is non- Canadian.
The broadcast licence owner, also in terms of foreign ownership, is limited to 20 per cent.
CFUW concurs with the Peter Murdoch quote that ``he who owns the messenger controls the message.'' More extensive foreign ownership of the broadcast section raises the question of whose news Canadians will hear. Surely we must ask ourselves: Will it be our news and our interpretation?
We further question whether companies in other countries who might come to gain control of our media would themselves be immune to forces of convergence or of monopoly development.
Another policy of CFUW relates to the issues of Canadian ownership of the publishing industry in Canada and support of Canadian publishers. One might note with regard to this that this is a committee concentrating on media and that previous work has been done on book publishing. However, it has become academic to frame our discussion in separate compartments of newspapers, broadcast media, telecommunications and publishing. We are talking about questions of voice, the Canadian voice in Canadian media.
A further and recent example in April was the first use of a Creative Commons licence where an author had one chapter at a time of his work read by people who volunteered to do so and put on the net for brief periods of time for free. This is a definite crossover between publishing and the questions of media responsibility.
CFUW policy states that it:
Resolved, That the Canadian Federation of University Women (CFUW) urge the Government of Canada to strengthen the infrastructure of Canadian owned and controlled publishing industry by ensuring the continued funding of programs that assist Canadian publishers to publish and distribute books by Canadian authors: and
Resolved, That CFUW urge the Government of Canada to strengthen the Investment Canada Act to ensure that Canadian owned or controlled publishing firms offered for sale remain in the hands of Canadians, or landed immigrants.
As noted by the Standing Committee on Canadian Heritage, government grants have been critical in enabling the industry to meet the important cultural goal of having Canadian authors published and celebrated in Canada and indeed around the world. However, the establishment of a financially stable and sustainable industry has remained an elusive goal.
With regard to issues of amalgamation and monopoly, among the major changes taking place in the Canadian book-publishing industry are the following: The consolidation of retail outlets into mega-stores controlled by a small number of companies; the introduction of electronic markets through the Internet; and a reduction in institutional purchasing of the books. Internet distribution and consolidation of retail distribution are putting more pressure on publishers to offer greater discounts to the distributors. In addition, there have been real questions around the practices associated with returns, in contracts with major retailers such as Indigo. CFUW urges continued support of the Canadian publishing industry through these challenges.
With regard to copyright issues across media, CFUW has the following policy:
Resolved, That the Canadian Federation of University Women (CFUW) urge the Government of Canada to assign the appropriate ministry or regulatory body (such as the CRTC) the responsibility to monitor and regulate the business practices of Canada's print and electronic media, especially when these practices violate the Canadian Copyright Act and the ownership of copyright by freelance contributors to print an electronic media:
CFUW supports all efforts to enforce Canadian copyright law to protect the intellectual property of journalists, photographers and artists.
A case in point is that of Ontario writer Ms. Heather Robertson, who had been a long time contributor to Thomson Newspapers. She found an extensive body of her work for sale on Thomson's database, Infomart. She launched a 1996 suit of Robertson v. Thompson Corporation, which had evolved into a landmark class-action lawsuit. A recent ruling established that an electronic use of a writer's work was indeed a separate use and should be compensated further. There have been seven long years of litigation and $20,000 in expenses for Ms. Robertson to pay. The case is expected to take another three years and be challenged in the Supreme Court of Canada at the cost of another $20,000. There has been a recent settlement in that case. On October 7, 2004, the Ontario Court of Appeal upheld the lower court ruling in that copyright or freelance work belongs to the creator. The work is available to the media company for use in the contract as described and may not be reused without permission or payment.
However, directly following that, there is a release from the Periodical Writers Association of Canada on November 3. I do not know if you are aware of this but CanWest Global has released a new contract for their content providers. That contract includes the following paragraph:
Creators will give CanWest Global the right to exclusive use and exploit the Content in any manner and in any and all media, whether now known or hereafter devised, throughout the universe, in perpetuity.
You cannot get a much more global contract than that. As the decision in favour of Robertson's case went forward, this CanWest contract is another step in another direction entirely.
Canadian laws of copyright and competition should protect Canadian diversity, the Canadian voice and Canadian image as provided by thousands of artists in Canadian publishing. CFUW also supports a strong independent national public broadcasting system.
Resolved, That the Canadian Federation of University Women (CFUW) urges the Government of Canada and the provincial and territorial governments to recognize the unique value and importance of a strong independent national public broadcasting system which provides Canadians with a knowledge and understanding of one another and a vital sense of our Canadian identity and culture;
Resolved, That the CFUW urge the Government of Canada to protect, support and strengthen the effectiveness of national public broadcasting by restoring sufficient, protected, stable, long-term funding to the Canadian Broadcasting Corporation/Societé Radio-Canada in order to allow it to:
Maintain a high quality of Canadian programming in all regions of Canada
Avoid excessive reliance on commercial sponsorship and control
Safeguard its editorial freedom.
CFUW questions where residents of Canada will find community and national Canadian news by Canadian journalists if there is no strong, publicly funded public broadcasting system that allows for free expression unrestricted by corporate influence. CFUW has concerns about the continued reduction in funding to the Canadian Broadcasting Corporation for the future of a strong independent media in Canada.
In the Ispos-Reid survey of April 2004, which has been presented to you previously, we note that 85 per cent of Canadians wanted ``to see CBC strengthened in my part of Canada,'' and 80 per cent agreed with the statement, that ``We should build a new CBC capable of providing high quality Canadian programming with strong regional content throughout Canada,'' which is a reverse of their present direction.
In summary, CFUW strongly supports increased funding for the CBC and the recommendations of the House of Commons Heritage Committee on the issue of foreign ownership of media and communications. The committee has recommended that the existing foreign-ownership limits for broadcasting and telecommunications be maintained at current levels.
CFUW opposes easing of restrictions of foreign ownership in Canadian publishing on electronic media, and we urge support for authors, photographers and journalists, who are now described as the content providers to enable the continued existence of their voice. CFUW calls on the Government of Canada to provide full support for the CBC.
The committee also asked for input on the current or potential role of media literacy in schools. We are pleased to note that we have policy just passed this summer that relates directly to that. CFUW policy on school libraries refers specifically to the importance of adequately funded and staffed school libraries to enable concentrated attention to information literacy:
Resolved, That the Canadian Federation of University Women urge the federal, provincial, territorial and local governments:
To promote the importance of information literacy in today's society
To promote the fundamental role of school libraries at all grade levels in fostering and teaching information literacy skills; and
Resolved, That the Canadian Federation of University Women urge the provincial, territorial and local governments:
To fund, support and maintain school libraries at all grade levels, staffed by qualified teacher-librarians, and
To adopt policies and standards for school libraries and teacher-librarians by working with professional organizations such as the Canadian Association for School Libraries.
Our 21st century world is characterized by rapidly changing technology, instant messaging and instant news reporting. Information literacy must be an integral part of public education in Canada, and information literacy is best incorporated into public-, elementary- and secondary-school curricula when schools have well-stocked libraries with qualified teacher-librarians, who teach access skills and teach students to evaluate and apply information.
CFUW commends this committee for its consideration of the Canadian media industry and, in particular, the rights and responsibilities of those industries in Canada.
The Chairman: Thank you very much indeed. There is serious food for thought, and the first question will come from Senator Tkachuk.
Senator Tkachuk: If Mr. Turner was moving CNN from Atlanta to Toronto, should that be prevented?
Ms. Clarke: Would you expand on your question?
Senator Tkachuk: Well, if Canadians are the only ones who can own a television or radio station, and if Mr. Turner said, ``I want to move CNN from Atlanta to Toronto and we will broadcast from there,'' should that be allowed?
Ms. Clarke: That is an interesting question, and perhaps a question that would refer to actual procedures and protocols that would be devised by the government in terms of regulations.
I think that we respect your question and we recognize what you are saying. I believe, in what we are saying, that we are not addressing procedures. We are addressing the concept of protection of the Canadian identity and culture. In that regard, we are challenging government to devise methods whereby there can be a balance between the needs of the media corporations to establish economic sustainability and, at the same time, protect Canadian culture and identity.
Senator Tkachuk: In other words, foreign ownership in its proper place is acceptable?
Ms. Clarke: Do you mean in terms of complete control of a Canadian media company?
Senator Tkachuk: That is what it would be. Mr. Turner or the shareholders own it.
Ms. Clarke: We would suggest it is important to maintain control of Canadian companies.
Senator Tkachuk: It would have to be a Canadian company before it could be moved to Toronto.
Ms. Russell: On that subject, we believe that it would all depend on whether that would mean that you took away funding from CBC, because it would be naive to suppose that we do not in fact view American and foreign-owned broadcasting. We are supporting funding of Canadian-owned companies.
Senator Tkachuk: When you say funding of Canadian-owned companies, do you mean the public companies?
Ms. Russell: We support Canadian content.
Senator Tkachuk: That would be, for example, CBC Radio and CBC TV, and all the subsidies for television programming, movies, and so forth?
Ms. Clarke: It would be commercial companies as well.
Senator Tkachuk: You mentioned Mr. Dwayne Winseck of Carleton University said that, ``Canadians now have one of the most consolidated media systems in the developed world and an unrivalled scale of cross-media ownership.'' Does your organization think that is a result of not enough competition? In other words, should there be easier access for you to enter the marketplace? Should we prevent television networks from buying newspapers and vice versa?
Ms. Clarke: That is an interesting question because, as this amalgamation has taken place, it is unprecedented and unusual in the developed countries. It appears to reflect that previous legislation in the Competition Act, for example, in respect of amalgamation or the formation of monopolies, has been waived, essentially. Where it initially described amalgamation in terms of ownership within a field, it became interpreted as a means whereby companies would be unrestricted in their ability to acquire other companies. The legislation has been applied in terms of: Has that legislation prevented a company from acquiring another company? In that direction, it is the economic development of the acquiring company that has been the primary concern, as opposed to the public that then bears the result of the acquisition.
I heard an interesting comment on the radio the other day. There was a discussion about the economy of Canada. The commentator said that companies had been holding back, or had been on hold for a short period, as they assessed the current market but the market was improving and the health of the economy was improving. Companies were now beginning to acquire again such that this goal of acquisition and mergers has become the lingua franca of our economy. We are not saying whether that is good or bad but we are saying that this has to be evaluated in terms of what it means to the media industries, in particular, and in terms of our Canadian identity.
Senator Tkachuk: Do we have more news sources in Canada today than we had 30 years ago?
Ms. Clarke: I cannot answer that question exactly. Can you tell me the answer?
Senator Tkachuk: Yes, I think I can, but I am not the witness. I ask the question because you mentioned the consolidation and the main focus of our study is to understand the news business of today. Although we have cross- ownership, do you think that we have more sources of news in Canada today? Canadians would seem to have more news sources today.
Ms. Clarke: I will guess at the answer. First, I have to acknowledge that I was new to Canada in 1968. I understand that prior to 1968 there were no national newspapers. I found that most interesting. Of course, now there are two. I sit down at the Internet every day and read three papers and there are more sources available. One example might be British Columbia where there are many sources available and most of them are owned by one company. Would the answer to your question be: yes, there are more sources available; or would the answer be: there are more opportunities to read media information coming from one source? That question of ownership voice is important.
Senator Tkachuk: The person in Vancouver can read all the news in Toronto too with just a click of the mouse.
Ms. Clarke: They can do that if they are so inclined and so able. For that response, I would draw your attention to our discussion of media literacy in the schools.
Senator Munson: Welcome to the committee. I rather liked the other version that you gave us before. It seemed to me that you were harder hitting in terms of media. You talked about the Canadian identity being gravely threatened in the other report. You used some extremely strong language, which I, as a former media person, enjoy.
Following other senators' questions, there may be many voices out there but they are concentrated in four or five areas of ownership. Is that good for democracy?
Ms. Clarke: I have just been handed another leading question. I will read a lovely quote from the Supreme Court of Florida:
The right of the public to know all sides of a controversy and from such information to be able to make an enlightened choice is being jeopardized by the growing concentration of the ownership of the mass media into fewer and fewer hands, resulting ultimately in a form of private censorship.
I would suggest that democracy is defined by access to all information from many different sides. That is an extremely important part of democracy. I will return again to the concept of media literacy in adults as well as children. We are barraged with information, and as corporations continue to grow and to amalgamate. Those media companies that provide that information are profit-making organizations. Their use of their platforms has the potential to be coloured in one direction or another. We, as a people, must be able to interpret that information. I find that is an interesting focus of your later questions. How are Canadians able to understand and evaluate the information that they receive? On the one hand we can address the concepts of monopolies of convergence but on the other hand we must also address how we are helping Canadians to respond to the pressures in the media marketplace.
Senator Munson: In following that, not too many years ago you could pick up the Ottawa Citizen and have a different voice from the National Post or the Montreal Gazette. Yet, if you are being served by the media today, you are hearing the same voice in many newspapers. There are fewer voices today, although there may be a few more jobs, trying to understand an individual story on the Hill covering government. Do you agree?
Ms. Clarke: Yes.
Senator Munson: The same thing holds true for freelancers who seem to be a dying breed in this country and to be controlled by the media. When freelancers write something, even though there is copyright law in this country, their report can be sold and resold, thereby creating profits for these new and bigger companies.
Ms. Clarke: As we noted, the Heather Robertson class action suit has been settled in her favour by the Ontario Court of Appeal. It may yet go to the Supreme Court but the copyright authority has been returned by the courts to the creator.
Senator Munson: I was not aware of that story. Perhaps not too many wrote about it.
Ms. Clarke: This is interesting because the story was not covered in the media. I learned about it through an email from someone within our organization who specializes in media. She advised me of that information.
She also advised me of the new CanWest Global contract, which you may not have heard. I will just repeat that paragraph.
The Chairman: The committee does have that contract, which has been submitted to us, and it will be circulated as soon as it has been translated. We translate documents.
Senator Munson: My final question deals with the CRTC. I asked the question the other day because part of our mandate here is to see where government regulation should go in the future. The CRTC seems to be making some controversial decisions; in terms of RAI Television, no, you cannot come in because you are competing against local Italian television in Toronto. Al-Jazeera, there are certain things they can say, or not say, in this country. I disagree with Fox Television but I would not mind seeing them in this country because I get a kick out of the way they report and interpret news. It is a seamless border now. What is your view on allowing everyone to come in and sending out information in this new universe?
Ms. Clarke: That is happening now. You can turn on your television, and depending on what kind of services you have, you can access just about any media in the world in some way or another. I, too, have found some of those decisions interesting, and perhaps a little controversial.
CFUW does not have a problem with access to different voices. The point that we are making is that within this opportunity, marketplace, and vast array of sources available to us, those that we create and monitor in Canada should reflect our identity. If we take the caps off foreign ownership and enable other countries to control our media, I am afraid I must suggest that it is a given that a monopoly in another country, controlling one of our media corporations, will not provide our voice. They might say that they will, initially, but if we consider that profit is the baseline, economic viability of a company, their goal is going to be to establish their voice.
When reading about Clear Channel in America, the media and radio company, and reading about how they have amalgamated in the United States, I suddenly have this vision, which I am sure you have addressed as a committee, that if we take the caps off foreign ownership and we are subsumed by other cultures and companies, what is to stop this process continuing throughout the world? You can move toward a ridiculous point where you may have four companies controlling the world media.
Each country has the right to respect, to retain and to monitor one's own identity and culture. We know that we are different. There is a vast array of studies to tell us that we have different sensitivities than some other countries. We are the product of what we are as people, but we are also the product of how we see ourselves reflected. As we read, as we watch television, as we go on the Internet, what we see tells us and helps us to describe who we are. That is one reason for paying close attention to media literacy. It is another reason for paying close attention to what is the message from those media companies. It is not one or the other. It is not saying that a media company cannot be economically stable. That is fine. At the same time, the challenge to you, as government, is to enable media stability with retention of our Canadian voice. We would also give you the challenge of addressing media literacy, information literacy, in our populace. This is an extremely important concept.
The Chairman: You make a very eloquent case for the preservation of healthy, diverse and Canadian sources of news, Canadian media and so, I am sure, would we all say. The question is, How do we get from here to there? If it became apparent that for genuine economic reasons one had to choose between allowing further concentration of ownership, and allowing foreign ownership, which would you choose?
Ms. Clarke: That would be the rock and the hard place, right?
The Chairman: Which rock would you hang your hat on?
Ms. Clarke: Again, I will return to the concept of principle versus process. Simply, I would not accept that definition, because we have the right, as a government, as a people, to determine our own destiny. We have the right to look at the Competition Act and to say, all right, we have gone in one direction, perhaps we should be looking at addressing this issue in terms of drawing back from permitting the intense amount of amalgamation that has happened. We have the right to say that we will continue to maintain our foreign ownership restrictions. In other words, we have the right to do both. We have permitted unrestricted amalgamation. That has been a fact in media.
There are many questions about that taking place right now. As I said, this is unprecedented. This is the third committee to look at the importance of media vis-à-vis culture and the economy of the media structure. This is a national debate of tremendous importance. I noticed that on your website, I think that is where I saw it, that you are considering going to the country next. I believe it was in your interim report. That is a wonderful idea, to get out there and find out what Canadians think about this concept, but be sure that you frame the concept as you have exactly, Madam Chair. As you have mentioned, do we want to have continued amalgamation such that the media fall into fewer and fewer hands? Do we want to have foreign ownership of our media? It is not an either/or. I am afraid I cannot answer that question because the answer is ``neither''.
The Chairman: You cannot blame me for trying to pin you down on this because these are the kinds of issues that come before us on an extremely challenging basis.
Senator Eyton: When you began your remarks you spoke about two kinds of convergence, one being the one in the area of monopoly, the Criminal Code and all those nasty things, and the other being the convergence of the media. It seems to me that in making your remarks, you largely ignored the convergence of the media and talked about what I would call the traditional or old-fashioned varieties thereof; TV, radio, newspapers and perhaps books. We have seen numbers that demonstrate that readership, for example, by young Canadians is not terrific and it is declining. We all know from the children around us that their use of the alternatives is increasing markedly.
From my own point of view, I am an old guy. I have way too much diversity. I can hardly manage the information that is available to me, whether I am looking at a computer screen or a website or sitting in front of my television set and having a choice of satellite or other services on my TV. I have all of the channels that I can possibly manage, plus some. As we all know, there are applications before the CRTC right now for a different type of radio service in Canada.
Ms. Clarke: It is digital.
Senator Eyton: It seems to me that the convergence you are talking about is fine if you want to ignore everything that is happening right now. I would have thought, given trends and what is happening out there, you would have to recognize that there is diversity of every possible kind. The Canadian voice, whatever that may mean, has all sorts of opportunity of expressing itself. I can invent a website in a week. I can reach Saskatchewan wheat farmers who like snakes, and I can have a website and I will get everybody who is interested in that, so that there is plenty of opportunity for the Canadian voice to get out there.
In your presentation and the resolutions that you presented, did you take account of what is happening now in the way people are communicating with each other and passing on their voice or their information or their various forms of entertainment?
Ms. Clarke: In one regard, I must note that we are bound by policy. What you are suggesting is that, on the one hand, we address an area that we have not yet addressed in policy. However, we do have policy that refers to the difficulties expressed in copyright with multimedia use. We do have policy that refers to the concerns that we have with media monopolies. When we talk about media monopolies, we were initially talking about cross media ownership, basically. The vertical integration or the convergence of mode within technology has been extreme. Our concerns are still with the effect of monopoly, and that does lend itself to the possibility of monopoly. If you have a company that controls cable, newspaper and an Internet service provider, you can have that vertical integration. You can reach a huge number of people all from the same company voice, which is still our concern, and that is consolidation of ownership among companies.
It is true that there are many opportunities for independent expression of opinion. I know that. I could have a blog overnight. I could have and have had a website. At the same time, those do have a limited audience. A media giant has the opportunity to reach a great many people. We can look at examples we have seen. For example, the senator referred to Fox News. Fox News had a tremendous impact on events in the United States. Theirs was a voice to which many millions of Americans turned. That is far different from somebody's individual website; is it not? When we talk about the concern that we have with monopolies, that is our concern.
Senator Eyton: You can look at hits. I know there is an auction going on in Toronto on Monday. They posted it a week ago. They were running 100,000 hits a day.
Ms. Clarke: What are they auctioning?
Senator Eyton: It has a Canadian element to it. A website can be used for personal communication, but I think it has a much bigger audience than that.
I will go on a variation of that. I think that consumers out there, or all of us, have a great deal of choice today, and, from my point of view, it will get worse. There will be too many choices, and I have a great difficulty making selections.
In your remarks there is a premise that one owner has one point of view on all subjects, and he will footprint, publish or broadcast that. In a sense, we are kind of victims in that these messages come to us, we absorb them and that is the end of it.
I have been involved personally as a lawyer when I worked for a number of broadcasters over the years, long ago. I have not done it recently. I will give you specific examples: Standard Broadcasting, where I helped the Slaight family assemble their radio stations, Astro Communications where I helped with their broadcasting and filmmaking and four or five others. Their motivation was always to have the biggest possible audience. They did not have a message and then say, ``The victims are out there, and I will promote this particular point of view.'' It was never that way. They were always trying to craft a product that would attract the largest possible audience.
I do not think there is one voice. I read The Globe and Mail every day. There are a variety of voices there, many with which I disagree. I read the National Post and there are a variety of voices there. I do not see this kind of conspiracy to express one point of view on a variety of Canadian issues. I see diversity, and even when I do not see it, I do not think there is the kind of control you imagine, for two reasons: First, people are different and express themselves differently; second, if you want to attract the maximum number of consumers, you will try to pander to them. CBC does it, and they are immensely successful with CBC Radio, particularly in the morning hours with Andy Barrie and his friends. They are doing that because they are trying to reach the maximum audience.
I have great trouble understanding the concern for the voice of Canadians, given all of the diversity and what I think is the real motivation of owners, which is to try to reach consumers in the biggest possible numbers.
Ms. Clarke: Your arguments are salient and have been posed by many people. In answer to them, I would say only that our concern in CFUW is that the creation of a media monopoly creates the potential for a standard line. It also creates the potential for editorial biases, and there have been those cases. We know that. One of the possible answers to that is to restrict an owner or a publisher of a series of papers to an editorial position voiced in one of them — one out of four, for example.
However, if you have the continued development of monopolies of media companies, the very comment that you made can be on both sides of this scale. If the message or the mantra is to attract the largest number of viewers or the largest audience possible, the question becomes what they are addressing in terms of creating that audience. What are their goals? What are their economic foundations?
You do raise the potential for creating a company that panders to that which gets the largest number of viewers.
Senator Eyton: For example, the CBC?
Ms. Clarke: I was referring to Clear Channel. Rush Limbaugh is part of their stable because they get a lot of listeners. There are questions of how do we reflect our own identity.
Senator Tkachuk: What is wrong with Rush Limbaugh?
Ms. Clarke: I did not say anything was wrong with him.
Senator Tkachuk: What was the point of that?
Ms. Clarke: The point would be that it is a huge company and it carries a stable of announcers that bring the largest number of listeners, with one goal and that is to get the largest number of people listening to advertisers.
What is your end goal? Is your end goal to provide consumers for advertisers, or is your end goal to balance the economic needs of the companies with the identity and culture of your country?
Senator Eyton: What was the end goal of, say, the people who were in the Giller competition and write books?
Ms. Clarke: Extension of Canadian author voice.
Senator Eyton: Is that right?
Ms. Clarke: Yes.
Senator Eyton: I would have thought the writers were trying to write a successful book that would reach the maximum number of people in Canada or elsewhere.
Ms. Clarke: If you ask any author what was the main raison d'être for writing their book you would have many different voices saying different things, but I do not think that the common answer would be to make a buck.
The Chairman: If I may, Samuel Johnson said that none but a blockhead ever wrote except for money.
Senator Trenholme Counsell: I apologize for being late. I had to get here because you were going to be here. I have great respect for the Canadian Federation of University Women, having been a member; I am not right now.
Ms. Clarke: We will send you a membership application.
Senator Trenholme Counsell: I would have to join in Sackville, New Brunswick. I should join again.
I may have missed the initial points that people have made so I again apologize. I am so pleased to read what you say about the Canadian Broadcasting System. I hope that is where you will continue to use your voice very strongly both with television and radio. It is such a precious thing about our country. I ask you to do that.
I found myself agreeing with Senator Eyton when he spoke about what I would call the bombardment of information today. If you take the general population — and I am not talking about the minority of discriminating people that really choose carefully what they read — I think that people have an enormous number of choices. If you look at the television channels — between that and the morning radio and the radio maybe driving home at night where people get their news — there are so many choices, be it radio or be it television.
I think one of the challenges is to educate our young people to make choices. I know you are very strong in education. How would you respond to that?
Ms. Clarke: We would respond to that with a strong urging of the government to support the very careful and concentrated attention to information literacy in the schools.
I would further address your earlier point and respond to the many choices that are available, the overwhelming choices. This is something that I would have said to Senator Eyton as well. You think you have many choices. One of the points that must be made goes back to the copyright discussion that we had earlier. As many very frustrated journalists will tell you, they provide a piece to a company and they hear it on the television news. They see it in the paper. They see it in a number of different sources that all belong to one company. While you may think that you are hearing a different story in a large number of settings, you are not necessarily doing so.
Senator Trenholme Counsell: If I may, I do not think that is true with our television channels in Canada. You do not see much of an overlap from one television channel to another. I am speaking largely from Atlantic Canada. They have their own reporters, one by one by one. If you are flicking your news from one channel to the next, which many of us do, you see different people. They may have the same story but they tell it differently. That is my impression as an Atlantic Canadian.
Some reporters feel strongly about this, but I would like to know whether you feel that the companies that buy up newspapers do it for business purposes or for control of the media. Which do you think is the predominant reason? Is it a business decision? Is it a control-of-information decision?
Ms. Clarke: I believe at this juncture it is a business decision. Amalgamation and acquisitions are considered strong business. The minute one company acquires another, the stock of the company rises. There can be questions with regard to that as well, but I am sure that it is a business decision.
The Chairman: Thank you very much, Ms. Clarke and Ms. Russell. It has been an extremely interesting session. As you can tell from the questions, you were pushing us to think hard.
Ms. Clarke: You pushed us back.
The Chairman: That is the best thing that witnesses can possibly do. We are grateful to you for being with us. You will provide a couple of references to the clerk with our grateful thanks for that.
Honourable senators, our next witness is Mr. Ken Alexander, who is publisher and editorial director of The Walrus, a comparatively new Canadian general interest magazine that is aimed at, according to the magazine, sophisticated readers. I think that is a fair description. This is actually an interesting opportunity to look at media start-up situations, audience targeting, Canadian content and all those things.
Thank you very much for being with us. I think you know our format. I will ask you to give an opening statement of maybe 10 minutes and then we will ask you some questions.
Mr. Ken Alexander, Publisher, The Walrus: I will start with a story about my daughter, who is quite media savvy. We do not let her watch TV which is why I think she is media savvy. It was her seventh birthday recently and she came downstairs and announced to my wife and I that she wanted cupcakes. Sharyn said, ``I am not really the kind of mother who bakes cupcakes but I can buy some for you.'' Claire responded with, ``I am not really the kind of daughter who accepts store-bought cupcakes.''
I tell that story because I become concerned when I hear people over-promoting the teaching — I am a former teacher — of media literacy in schools. Claire, I think, has certain acuity of mind because we have not talked to her a whole lot about media and instructed her in skill-based stuff. Rather, we have allowed her to react to the world and tried to ensure that she does a lot of reading.
The most important thing for children to develop in school is not to develop skills but to become curious and great readers and have terrific stories to tell. Those are the kids that in my experience hiring journalists out of journalism school and others, can tell when they are being lied to or when there is coded language being used, which are the touchstones of a media-literate mind.
I should say something about the whole topic of convergence. I would recommend to you Robert McChesney's Rich Media, Poor Democracy, which is a pretty good study that looks closely at the problems of owning both television stations and newspapers in the same jurisdiction and why there were laws in the United States, especially, to prevent such cross-ownership. It is a solid read that deals mostly with the situation in the States.
In Canada, the point about Vancouver is well taken, as well as the points made about Toronto. It is true that there are more than four newspapers in Toronto. There is Now magazine and I magazine and there are many other sources. You can hear and read a wide variety of views, including authoritative views, which is important. However, in Vancouver pretty well everything comes up CanWest Global. I do not know why I was invited to appear before this committee but it could be because of my somewhat smart aleck remark directed at Leonard Asper and his use of the word ``pre-purposing.'' He said that he would like Murdoch Davis to write editorials from Winnipeg, not just for the editorial pages of newspapers right across the country but for all platforms — newspapers, radio, Internet, et cetera. That kind of thing most certainly puts a chill over newsrooms, whether they be radio or newspaper.
The issue of quality and authority is important. I do not place much truck in the argument that because the Internet exists everyone has access to whatever they want. The truth of the matter is that on the Internet, anyone can be a publisher. Fact-checking is not the order of the day and, as a result, the Internet tends not to have the same kind of authority in peoples' minds, rightly or wrongly, that a national newspaper has, for instance. Yes, you can create your own blog and suddenly you are a publisher and gain an audience. However, it does not have the same kind of authority that a national newspaper has.
We need to ensure quality of media and not worry so much about whether choice is being constricted or whether there is choice. There is a great deal of choice. I do not know what people's predispositions are to go after those choices but there are many.
The Chairman: What would you do to ensure quality?
Mr. Alexander: Well, I think you have to delve into the nuts and bolts of it. The Atlantic Monthly, Harper's, Mother Jones, the Utne Reader and many periodicals in the States simply would not exist without foundation support because they lose money every year. They are in this business not to make money but because they think it is important to have those voices heard. The charitable giving laws in the States are such that foundations can give money, for instance to Harper's, in order to continue publishing.
That is one way of ensuring that you have a multiplicity of voices that, I would argue, are of quality. The quality issue is of paramount importance and I would like to see that kind of development happen here in Canada.
Senator Tkachuk: Why is the name of your publication, The Walrus?
Mr. Alexander: I guess I have to credit Anne Michaels, Linda McQuaig and a few other strong-minded women for the name of the magazine. I was concerned that it sounded too ``male.'' They argued it had guts and that if I did not stick with it they would withhold their support. Truth be known, it was the result of a fair number of late-night drinking sessions.
Senator Tkachuk: We have heard, and there has been much discussion, about subsidies for Canadian magazines in Canada. We heard witnesses from the ethnic press talking about this. My assumption is that they are talking about the postal subsidies.
Mr. Alexander: That is usually the case.
Senator Tkachuk: How do they work? Are they sufficient? Obviously, it is a good thing for you. Why is that necessary?
Mr. Alexander: I cannot really speak to the specific needs of niche magazines of the kind that you are describing. I can speak with a little more authority to the general interest magazine or what I would describe as the smart, general interest magazine or the magazine for the sophisticated reader. I can speak to the difference between controlled versus paid circulation and some of the problems that magazines face in this country, including why, in the general magazine category, it has moved by and large toward controlled circulation — working very hard on a magazine and then giving it away for free, which sounds counterintuitive.
The industry response to our idea of launching a smart magazine in Canada was a nice idea but not in Canada. The reasons were fairly simple. It is a great big country with a population strung out along the border that is not that concentrated and is difficult to reach. As well, the American periodicals have cornered the market. For the first reasons — great big country with a population strung out, many magazines have opted for controlled circulation, which means throwing the magazine into a weekend newspaper and delivering it to hundreds of thousands of addresses for free. In so doing, they are satisfying the interests of certain advertisers who would like an immediate circulation of 200,000 or so; and they can earn advertising dollars by doing so.
My own belief about controlled circulation magazines is that they are many things but magazines they are not. They are more akin to flyers and usually end up in the recycling bin with the rest of the newspapers the next day. If it is a monthly magazine, it should have a shelf life of one month, at least. As well, if the interest is in the immediate attraction of advertising dollars, then content is not the primary concern but falls to probably the secondary or tertiary concern.
More importantly, it is impossible, in my view, through a controlled circulation magazine to develop a genuine contract with a reader. Someone who receives a magazine for free, in other words someone who does not take the trouble to go out and buy it, will not develop the same kind of relationship with that magazine as someone who actually buys it. That is really what I am interested in, the contract with the reader and the relationship with the reader.
Senator Munson: I am curious, before we get on other questions about your magazine, if you can tell us a bit about the struggles to start it and your circulation now. Are you optimistic about the future? There are those of us who are reading it, but there are a lot of friends who are not.
Mr. Alexander: I am pretty bullish about it and I am thrilled by the early response to it. The circulation now is 50,000 paid subscription and newsstand, which is quite extraordinary after a year. There is a lot of goodwill around the magazine. It suggests a genuine appetite for a Canadian product that does not have a parochial mandate.
There is nothing wrong with reflecting Canada back to Canadians; that is absolutely fine. However, I would argue that in this world, that can be a bit limiting for our contributors and a bit limited in terms of what we do. Canada needs to place itself in the world. I think our writers — fortunately, we are blessed with fantastic writers — can compete favourably with the very best in the world.
I have been very lucky over the last four or five months, editing everyone from Richard Ford to Marci McDonald to Tariq Ali to Allan Gregg. It is very important for our writers to be in that kind of international Olympiad; they can compete there. Those are the exciting parts of the magazine.
The difficult parts are things like newsstand distribution, for instance. Paid circulation magazines, Canadian like ours, represent somewhere between 10 and 12 per cent of the display that you see on newsstands. As such, they are a bit of a nuisance to the newsstand distributors, and they might be inclined to just leave them on the pallet rather than deliver them.
That is another reason why certain titles have gone to controlled circulation. The newsstand distribution apparatus in this country is nowhere near as evolved as it is in Europe or even in the United States, and it is problematic for Canadian titles as a result.
Senator Munson: What happened along the way to Saturday Night? For a long time, some people looked forward to buying it. Then it became one of the ones you describe as a controlled magazine, thrown in the middle and there it is; and you are right, it did not seem to have the same appeal.
Mr. Alexander: I think it made a strategic mistake. I do not know, nor does anyone know, the exact history. There are so many legends around it. To boost circulation and increase ad revenue, they decided to go to controlled circulation. As soon as you give the magazine away for free, you diminish its value. Somehow it is a different beast.
They do not do controlled circulation in the United States with one exception, The New York Times Magazine, published by the same people. Most people buy The Sunday Times for the magazine rather than the newspaper. They do not do controlled circulation; and controlled circulation has certainly hurt the Canadian magazine industry.
I think that is because it cannot put quality first, to come back to my original point. The quality magazines, the New Yorker, the Atlantic Monthly, the Guardian, people buy. As such, they do not rely so totally on advertising revenue.
Senator Munson: We heard from previous witnesses about foreign media concentration. Do you have views on foreign ownership of Canadian magazines?
Mr. Alexander: Not really. Conrad Black did a fantastic thing with the National Post in its early days, and it was terrific. I believe him when he said, ``Look, I wanted to buy a newspaper because I believe in newspapers.'' He demanded editorial quality; there was real integrity there.
I would not mind a foreign owner of a Canadian product coming in and doing a bang-up job. It would not bother me in the least, and I think that Canadians are quite capable of doing the same elsewhere. You have to understand that I got into it because I believe that magazines occupy a special realm in the public discourse between broadsheets and books. For instance, think of yourself as a non-fiction book publisher that is not interested in just doing biographies. Where do you go for primer stories if you do not have magazines that are committed to serious long-form journalism? That is where they go. In the absence of those vehicles here in Canada, you have a downgrade of the non-fiction book publishing industry, I would argue. There are all sorts of things but — I forget my initial point now.
Senator Munson: Foreign ownership.
Mr. Alexander: Yes, back to my point. The difficulty is that — this is sort of germane — the absence of real vehicles will send our talent elsewhere. If you look at the folks down in New York and the number of Canadians working regularly at the New Yorker, it is extraordinary. They are there, sure, because it is the States and the money and the glamour and all that, but also because of the absence of vehicles here.
I can tell you I was speaking with David Rakoff just the other week who confirmed for me that it is hard to find a dinner party in New York these days without disgruntled Democrats suggesting they are going to move to Canada. My point to him was that we really need people to populate the place above the 60th parallel, so if they come up with SUVs, we need some folks up there.
If a foreign owner was committed to quality, then I would not have much difficulty with it.
Senator Eyton: As it turned out, to my regret, I published a newsletter for a number of years and I was not successful. You touched briefly on a couple of factors that should be of interest to this committee. You started a new publication, and I would be interested in hearing how you set about selling subscriptions and getting 50,000; that is a tremendous number for a magazine here in Canada. Can you touch on the distribution of that magazine, and some of the costs that are inherent in there that you think might or could be relieved?
Mr. Alexander: There is a tremendous amount of front-end loading; initially, as you are finding your audience, your subscriptions actually cost you money. It is when they renew —
Senator Eyton: How do you sell them in the first place? How do they get to know about your magazine? How do you get the order?
Mr. Alexander: PR, direct mail, all sorts of methods, me out there talking about the magazine. When it first came out, there was a tremendous amount of buzz about it and there was a tremendous amount of interest. I think that spoke to a pent-up appetite for something real, and for something that had big ideas and big aspirations. As one person put it to me, ``something unCanadian,'' not that I agree with that person. Then you can come out with some sizzle, but ultimately you have to provide the steak.
You have to keep putting out a magazine that is better and better with each issue, otherwise you die. That is what drives us.
Do you do it because you are sane? No, you do it because you think it is important to have out there in the media landscape.
Senator Eyton: Can you touch on distribution?
Mr. Alexander: Sure. I will start with the news stand.
Senator Eyton: How do you get on the news stand?
Mr. Alexander: Everything in the middle between the reader and the publisher takes their cut. There are national news stand distributors, who engage with wholesalers, who get the magazines at centralized locations from the printer and distribute them right across the country. It costs money and it takes time. We are printed at Transcontinental Inc. in Winnipeg and there were major problems with deliveries on three of the first seven issues. They were not on the stands when they should have been. There are those kinds of hurdles to overcome.
Senator Eyton: Is there enough competition in that area?
Mr. Alexander: I would argue, no. It is really difficult for paid circulation magazines to get terrific service from the in-the-middle providers, be they fulfillment houses, be they newsstand distributors, or be they wholesale distributors. All of those businesses could improve their services dramatically. I do not like to make general statements, so I will try a specific example. The corner store around from the office sells out the magazine every time they get it. They have never returned a single copy and they have always received around eight copies. The last issue they sold their eight copies within 10 days. You would think if the service providers were working for you, they might get 10 or 12 copies of the next issue, but instead they got four. There was a store on the Danforth that received 131. They said it is a great magazine but it is not that great and they returned 50 the next day and they ended up selling 77 or 78 of the 81 copies they had left. For the next issue, you would think they would get 90 copies, but instead they got 150. There is a store in Calgary that got two issues of the magazine at the same time. They said, ``I love October. What will I do with September?''
There are those kinds of problems. They are endemic and costly and there are similar problems on the subscription fulfillment side.
Senator Eyton: How about distribution by mail?
Mr. Alexander: Yes. You do not get the postal subsidy in the first year. It would be great to get the postal subsidy right away. We should be doing everything we can to help start-up magazines.
Senator Eyton: Quantity and the cost?
Mr. Alexander: I forget the numbers but the magazines, once they have gone through a full production cycle, meaning a full year, in the second year they can get a postal subsidy, which means it is cheaper to ship the magazines to all the individual subscribers.
Senator Tkachuk: Is there a reason for a year later?
Mr. Alexander: You have to demonstrate your viability. I think that is the principle. Magazines require a tremendous amount of front-end loading. You have to give them a chance. It cannot be so tight that they make one mistake and they die. For instance, our fifth issue was a disaster. It was a crummy issue, ill conceived and the cover was terrible. It almost killed us. It just should not be that tight. I am all with the program of, ``look you have to make it better and better,'' but it should not be that tight.
The Chairman: Going back to your reference to the National Post, which really was like a jolt of electricity to the whole journalistic landscape in Canada. It is still losing buckets of money, maybe not as many as in the first year, but on the last reports I saw, you have to have really deep pockets to carry an enterprise like that. Am I out of line to ask: Is your magazine is not profitable?
Mr. Alexander: It is nowhere near profitable.
The Chairman: When would you expect it to become at least break even, if all goes according to plan?
Mr. Alexander: The way Harper's is run is a bit irresponsible. I do not know that it comes down to this but Lewis Lapham, editor of Harper's, can go across the hall and say ``It was a good year but not great year,'' and Rick McArthur, the publisher, will give him a cheque. The approach David Remnick is taking with The New Yorker is more responsible; it is to try and make the thing break even. Magazines in our category will not make money. They are just not built to make money. However, they should try to break even, and I think they can. Our business plan calls for us to break even at the end of 2007. If you want to call that a launch period, then it is a long launch period and it does mean a significant investment. It can be extremely difficult, if not impossible, to find private investors because the question is asked: What are they investing in? The Walrus Magazine Incorporated is a no-share-capital, not-for-profit company because it is not a profit-making enterprise. You get into something like this because you deem it important, not because you intend on making any money. Yes, that is five years and probably $3 million to $5 million.
The Chairman: This is a lot of money. I am assuming your goal here is not to go personally bankrupt before you get there. How is your ad lineage going? What kind of reception do you get when you try to sell ads?
Mr. Alexander: It is really picking up. Many will argue that you will not get any in the first year and you can get yourself into the situation where you are desperate and start giving away ad space. That sets a dangerous precedent. We have not had to do that. Due to the nature of our reader, I think companies are starting to take notice. Allan Gregg did a survey for us and found our readers are us. They are university educated, smart, and demanding. They have some disposable income, and high expectations. They like to travel, a good bottle of wine and a good read. They read The New York Review of Books, The Sunday Times, and The New Yorker. They appreciate the fact that someone got off the couch and is doing it here in Canada. Those are our readers. Because they pay for the magazine and in so doing demonstrate that they want it, they are much more attractive to advertisers, once the advertisers learn about the product, than a controlled-circulation magazine where people are not asking for it.
Senator Chaput: You have launched your magazine in 2003?
Mr. Alexander: That is right.
Senator Chaput: Looking back during the first year of the magazine that was a success, is there anything that you would do differently now that you are experienced than you did when you began?
Mr. Alexander: That would be practically everything.
Senator Chaput: Could you tell us in what ways?
Mr. Alexander: I do not know how much you know. Most recently, it looks like ``60 Minutes'' will feature one of our stories. It is interesting that all the requests from foreign media are always about content. For example, they say, ``That is a really interesting piece. Where did you get it? We would like to get in touch with the writer.''
Regarding copyright and ownership, because it came up before, ownership of the pieces reverts back to our writers as soon as the magazine goes off sale. In other words, we own it for 30 days in most cases.
Many of the queries from Canadian media have been about what goes on in the office. If you ever read the history of The New Yorker, the reason they did not publish a masthead was not because they were modest. They did it because they never knew who was going to be working there from week to week.
We have had a fair amount of turnover. I would argue that some of that has to do with people being schooled in controlled-circulation environments and not understanding that content in this product is king and must always be king. That requires a certain editorial rigour that is the hallmark, I think, of our magazine.
Getting back to the quality issue, one of the problems with many of the dailies these days is not just that they are paying freelancers 30 cents a word, but that they are not fact-checking either. We fact-check our letters, absolutely everything. We make mistakes here and there, but even the letters to the editor get fact checks. There is a commitment to quality in the magazine that we are hell-bent and determined to keep up.
To your point, I would have done much more study and research and would have been much more circumspect about the views of the many consultants in the magazine industry, most of whose opinions have proven wrong. Consultants are like people a long way from home with a soft briefcase and a ponytail who can attend a meeting, get up and leave, and there will not be any consequences to what they said. The thing about our magazine is you have to have stakeholders. That is what I have learned.
Senator Trenholme Counsell: I have not read the magazine, but I am going to buy one. I was sitting here thinking this is a good Christmas gift.
Mr. Alexander: It is a fabulous Christmas gift.
Senator Trenholme Counsell: I said in the Senate the other day that I would make the suggestion to as many people who will listen to me that I wanted to give a book and a skipping rope to children this Christmas, so I will go through my list and see who would enjoy The Walrus.
Mr. Alexander: I love it.
Senator Trenholme Counsell: If you were not the publisher of this magazine, are you more concerned about the quality and content of our magazine industry or our newspaper industry? Which are you more concerned about in this country?
Mr. Alexander: I do not want to equivocate, but I would say both. We do have a situation where foreign bureaus are closing down, for instance. We have a situation where newspapers are buying more and more wire copy. Content is expensive. Right now, I have been dealing with a journalist that we sent chasing three young Afghanis who spent some time at Guantanamo Bay, and she is doing a piece on what it is like for them back home in Afghanistan. We have sent her over there. Those kinds of things are tremendously expensive. Content is expensive. If the print industry gets itself into the position where it starts clawing back dramatically on the amount of money and resources spent on content- providing, then it is in trouble. Then both magazines and newspapers are in trouble.
I am concerned for both. I am more concerned about magazines because, as some people put it, the Canadian magazine industry does not exist. It needs to exist in a big way.
Senator Trenholme Counsell: It is easy to say ``both.''
Mr. Alexander: I am more concerned about magazines.
Senator Trenholme Counsell: I forced you.
Mr. Alexander: I live in Toronto. In Toronto, we are lucky. We have four regular dailies, and we have many other newspapers that are struggling financially but still providing a multiplicity of voices, opinion and points of view, et cetera.
Senator Trenholme Counsell: I would be interested in how you are targeting your advertising. I am so disgusted with most of the magazines I pick up, not only Canadian but certainly American, with the advertising. I keep thinking if I see one more advertisement about anti-wrinkle agents and the like, I will just tear it up. Is it extremely difficult, in a case like yours, where you are being discriminating to get quality, to give some quality or character to the advertisements? I am not in the media, so I do not know.
Mr. Alexander: We have an additional problem. There is a China wall between editorial and advertising. Advertising can have no impact on our editorial. We are completely independent. Many advertisers will ask, ``Could you do a column on such-and-such? Then we will consider putting an advertisement in the magazine.'' Many magazines are there not for the content, but for the advertisers. They are essentially advertising vehicles.
Our magazine is completely content-driven. An advertiser will want to be in our magazine because the advertiser is then associating itself with a quality product that is speaking to a sophisticated audience. That is all we can offer.
Senator Trenholme Counsell: Are you advertising Volvos?
Mr. Alexander: Volvos? Not yet.
The Chairman: That goes to the point he was trying to make earlier about persuading advertising agencies that what they really want is the audience that your magazine is providing.
Mr. Alexander: Yes.
Senator Tkachuk: When your writers are at a cocktail party or you are having a meeting with your writers, do they talk about convergence? Is it a big top-of-mind subject? Their articles are being written for a newspaper but do they worry that they are also being used on the Internet or on television?
Mr. Alexander: Absolutely. We have a contract. We get special permission, for instance. We do not put everything on our website because it is a magazine first and foremost. If you want to read the features in the magazine, you have to buy the magazine. Even with a small piece like Wayne Johnston's, for instance, we ask him, ``Can we put it on our website?'' He has the right to say no. Essentially, he owns it. He has the right to say, ``Okay, but I want another couple hundred dollars.'' They do talk about that.
Senator Tkachuk: They talk about it only because they do not think they get paid enough for it; is that right?
Mr. Alexander: Writers in this country make an average of $11,000 a year. There are very few freelance writers in this country who make a living freelance writing. They must have some other gig in most cases. We pay more than the industry standard — not because we want to indulge writers but so that we can demand more.
I can tell you this: Writers in this country write differently for Canadian periodicals, or got into the habit of writing differently for Canadian periodicals, than they did when they were engaged with American periodicals because they knew that the editing would be much more rigorous south of the border, that there would be many more backs and forth, and that it was a different standard. One of the things I am attempting to do is to bring that standard north of the border.
There are many people who have submitted stuff to us who have never been fact checked and who did not realize that this submission represents a first draft and there may be six drafts.
Senator Tkachuk: Somehow I find that really easy to believe.
Mr. Alexander: This is one of the reasons why having a vital magazine sector is important.
Senator Munson: I started at $32 a week at Radio CJLS in Yarmouth in 1965. It is a tough business.
The Chairman: I was earning $50 that year. I was ahead of you.
Senator Munson: There was a lot of control there, too.
Our mandate is about investigating what government's role is in all of this business. I am curious to know from you if government should be doing more in terms of regulation or deregulation, not only with magazines but also with newspapers, television and that sort of thing. What is the role of government? Should they just be somewhere on the side and let the free market work?
Mr. Alexander: I have thought about this question over and over again. I think owning a radio station, a TV station and a newspaper in the same jurisdiction is problematic. I think that the laws in the States that prevented such kinds of ownership were progressive and smart. To come back to Leonard Asper's use of the word ``pre-purposing,'' they are attempting to create content that can be used on multiple platforms. This is the language. You have to be really careful, I think, when you are talking, that you do not start using words that you cannot put in your wheel barrow and take home with you, for example, vertical integration and these kinds of things. You have to break it down into what they actually mean. Government should step in to prevent the kind of situation that now exists in Vancouver. It is not healthy. It is not good enough to say that people can use the Internet. The Internet does not have the kind of authority that a newspaper in a box on the street has or a television show has or television news has. It does not have that kind of authority.
The government should regulate to that degree. I also think that we need to have a healthy number of completely independent media outlets. They do this in the States with National Public Radio, NPR, and the Public Broadcasting System, PBS, through subscriptions. They get corporate money that is unattached; it is not directed. Independent media needs to be out there in some way or another. If it is not there or not available or not being published through crazy people like me, then the government should create the terrain so that it is and support it. In other words, the government should support the CBC, I think.
There is a role, because capital will trend towards monopoly always. It always has; it always will. There is a role for the government. How activist it wants to be in this arena is an open question.
Senator Munson: That would beg the question about freedom of the press and freedom to operate. Would you not have cries from a magazine like yourself that would say that you cannot do that in a democratic society?
Mr. Alexander: I think that is the strongest argument. Here you are saying that we have corporate media and then what you are suggesting is government media. That is the strongest argument. That is why it must be handled delicately. It also must be handled through progressive grants and helping start-ups — not to sound self-serving — and those kinds of strategies.
The Chairman: Along that line, where did you get your start-up money?
Mr. Alexander: Right now, it is my money. It is private. I think this is an interesting case. If Harper's magazine, which is published by the Harper's Magazine Foundation, is allowed to distribute in Canada, — which it does — is Canada giving Harper's magazine an unfair advantage over someone like myself with The Walrus, who does not have the benefit of foundation funding?
The Chairman: Wow, we have heavy-duty philosophical arguments there. Short of engaging immediately in that subject, and coming back to more tangible Canadian policy, you mentioned the possibility of aid for start-up ventures. What kind of public policy would help?
Mr. Alexander: This is a public-policy area. Right now in Canada, there are not magazines that are qualified charitable donees. Foundations in Canada cannot give them money to start up.
The Chairman: If you are talking about excluding a foreign magazine, that is a whole other argument on whatever ground.
Mr. Alexander: If the government, through its tax laws, prevents private foundations from supporting such ventures, should it not support them to the degree —
The Chairman: Does our law prevent private foundations from investing in magazines?
Mr. Alexander: Absolutely, and getting a charitable receipt. If that dynamic is occurring in the States — and has been for 150 years — to come back to my point, are those magazines in a continental environment being given an unfair advantage? If it wants to maintain its policy, should the government not respond by saying, ``All right, we are going to support this sector with maximum dollars.''
The Chairman: With maximum direct government dollars or with shifts in the tax law or charitable laws?
Mr. Alexander: You could bring the tax and charitable laws in line with the American tax and charitable laws in this area.
The Chairman: Are there any other thoughts about what we might contemplate to help start-up ventures?
Mr. Alexander: That would be a big one, although a most interesting area. I would like you to buy my argument about the difference between paid- and controlled-circulation magazines. They are diametrically opposed, in my view. I would ask you to look at the paid-circulation magazines as real magazines that probably need about as much help as you can give them.
The Chairman: Are you suggesting differential tax breaks on advertising in those magazines. Is that what you are talking about?
Mr. Alexander: No, I think that a magazine's start-up phase is not two or three issues or two or three months. Rather, it is three, four or five years. Magazines should be given that amount of time to make a mistake here and there and to breathe, to know whether they can truly thrive. In the absence of charitable dollars and private investors, there is a real role for government support.
Senator Chaput: I do not know much about this program. Do you know anything about cultural industries in respect of the film and video industry? At the end of the year they have access to funds depending on the number of people they have hired. They are able to request a refund of a portion of the income tax dollars that they have paid at the end of the full year. That money can then be used the following year. Do you know anything about that?
Mr. Alexander: Is it related to Telefilm Canada? I am not sure.
Senator Chaput: I am not sure but it pertains to the film and video industries.
Mr. Alexander: I do not know of anything comparable in the magazine sector. Something like that would certainly be most helpful.
Senator Chaput: It helps the small industries with their start-up costs and to get on their feet. Some small industries with access to such funding are able to build as they go along.
Mr. Alexander: I could make an extraordinary case, if we are looking at the provision of employment and keeping talent at home, which is important.
Senator Chaput: That happens in those industries that have such funding — exactly those two points. We will have to get information on that.
Mr. Alexander: Our staff — everyone included — is about 20 people. That is not including the contributors who are the writers and artists.
The Chairman: That is a significant number for a small, start-up venture. You are really trying to do it properly.
Mr. Alexander: That includes editorial interns. If you are committed to fact-checking, et cetera, you need to have the staff.
The Chairman: This has truly been a fascinating session, Mr. Alexander.
Mr. Alexander: Thank you.
The Chairman: For purposes of clarifying the transcript I would like to go over one thing. You mentioned earlier that foreign bureaus were closing. I believe you were referring to foreign bureaus of Canadian news enterprises.
Mr. Alexander: That's right.
The Chairman: You were not referring to bureaus in Canada of foreign enterprises.
Mr. Alexander: That is right.
The Chairman: It was Canadian bureaus abroad.
Mr. Alexander: Yes.
The Chairman: Thank you.
The committee adjourned.