Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 13 - Evidence for April 13, 2005
OTTAWA, Wednesday, April 13, 2005
The Standing Senate Committee on Transport and Communications is meeting today at 6:20 p.m. to examine the current status of the Canadian media industries; the emerging trends and developments within these industries; the role, rights and obligations of the media in Canadian society; and the current and future appropriate policies in regards to these industries.
Senator Joan Fraser (Chairman) takes the Chair.
[Translation]
The Chair: Honourable senators, welcome to this meeting of the Standing Senate Committee on Transport and Communications. We are continuing our examination of the Canadian information media and the role the State should play in help it remain vigorous, independent and diversified within the context of the major changes that have occurred in this field over the last few years — notably globalization, technological changes, convergence and the concentration of ownership.
I want to extend a warm welcome to our witnesses.
[English]
This evening we are pleased to welcome representatives of CanWest Global, one of the country's largest, if not the largest, media operators. We have with us this evening Mr. Rick Camilleri, President of CanWest MediaWorks; Mr. Steve Wyatt, Vice-President and Editor-in-Chief of Global Television News; Mr. Gerry Nott, Editor-in-Chief of the Canadian News Desk at CanWest News Service and CanWest MediaWorks Publications; and Mr. Scott Anderson, Editor-in-Chief of the Ottawa Citizen and Vice-President and Editor-in-Chief of CanWest MediaWorks Publications; Mr. Geoff Elliot, Vice-President of Corporate Affairs at CanWest Global; and Ms. Charlotte Bell, Vice-President of Regulatory Affairs for CanWest Television and Radio.
Thank you all very much for being here. You know the normal pattern we follow. We ask you to make a brief opening statement, and then we ask you questions. Please proceed.
Mr. Richard C. Camilleri, President, CanWest MediaWorks, CanWest Global Communications Corporation: Good evening, senators. Just to situate myself in the company, I am the president of CanWest MediaWorks, and in that position I am responsible for all of CanWest's Canadian media operations, including newspapers, television, radio, our web-based interactive operations and our other ancillary businesses. I very much appreciate that you have devoted an entire evening session for our appearance, and I know you will want to ask us many questions. Before you do, we have prepared some introductory comments which will include brief contributions from three of the senior practitioners of journalism on my team, who I will also introduce to you. Our written brief contains more detail on what they each do in the company.
Steve Wyatt is our Senior Vice-President of news and information, Global Television. Gerry Nott is our Editor-in- Chief of CanWest's content-sharing facility based in Winnipeg called the Canadian News Desk.
I might also mention in the interest of precision that Mr. Nott is doing double duty at the moment filling in as head of our Ottawa News Bureau. Scott Anderson is well known to you as the Editor-in-Chief of the Ottawa Citizen, and also serves as Vice-President and Editor-in-Chief of CanWest Publications.
Also here to help deal with questions is Charlotte Bell, Vice-President of Regulatory Affairs for CanWest Television and Radio, and Geoffrey Elliot, Vice-President of Corporate Affairs.
We are aware that CanWest has been portrayed by many of your earlier witnesses as the poster boy for what is perceived by some to be what is wrong with Canadian media. I want to say at the outset that much of what you have heard about CanWest is either patently untrue or greatly exaggerated.
We make no apologies for who we are, what we are, or the way we do business. Our purpose today, however, is to tell you the CanWest story, which is indeed a very good one and one of which we are eminently proud.
Our impression is that much of the previous discussion in the committee reflected nostalgia for things past, a romantic desire to restore Canada's media industry to what it once was. A persistent theme was that the ownership of Canadian media has become too concentrated, that the diversity of news, information and opinion available to Canadians has somehow diminished, and that public policy remedies are required to restore the Canadian media industry to the utopian situation that existed in earlier times.
Testimony from earlier witnesses who share that perspective has consistently lacked quantitative or empirical analysis. Their arguments rarely rose above anecdotal observations specifically constructed to support their own proposed remedies. Absence of supporting analysis did not, however, prevent discussion of several bizarre proposals. One such proposal was that the government should get into the newspaper business and launch a not-for-profit public newspaper alongside the Canadian Broadcasting Corporation.
Other witnesses called on the government, the broadcast regulator or the Competition Bureau to intervene in the media industry to require a separation of ownership as between broadcasting and newspapers. Still others suggested a need for government incentives to reward so-called independent newsrooms that presumably would publish news and information that government regards as appropriate.
Fortunately, several witnesses, including many respected academics and others involved directly in journalism, eloquently rebutted such assertions, pointing out the utter folly of such intrusions into the media by government.
In initiating the study in 2002, the committee itself offered no analysis of its own to support its apparent concern that media ownership had become too concentrated, that the diversity of opinion had somehow diminished, or that convergence or globalization and technological change had somehow damaged the quality, quantity or diversity of news, information and opinion available to Canadians.
It is fascinating that in calling for an end to cross-media ownership, particularly as it relates to newspapers and television broadcasting, not a single witness has even asserted that there has been a decline in the quality of news reporting on Canadian television. Certainly, no evidence was presented to the committee of a decline in the quality or diversity of news reporting on television. Similarly, no evidence was presented to the committee that the quality or quantity of reporting, analysis and opinion published in Canadian newspapers has diminished in any way from earlier years.
Conversely, more than one witness compared the quality of Canadian large-city and national newspapers very favourably with those published in cities of comparable size in the United States, ranking Canadian newspapers today as among the best in the world when compared with any newspapers of similar circulation size.
Of course, it will always be the case that individuals or groups, particularly those representing special interests, will disagree with, or be offended by, opinions in editorials and columns, or the depiction in newspapers and television news stories of events that run counter to their particular point of view.
CanWest newspapers have received their share of such criticism, as have other Canadian media. Indeed, if no one was offended by what they saw or read in the media, that, in itself, would be a telling comment on whether the media was doing its job. The starting point of every call for change is an assertion that ownership of newspapers in Canada has become too concentrated.
Even a rudimentary examination of the statistical facts will demonstrate the opposite. Claims of growing concentration of media ownership, which appear to have formed the raison d'être for the initiation of this committee's review, are simply not based on empirical facts. On the contrary, the biggest challenge facing all media in Canada, big or small, including both television and newspapers, is indeed media fragmentation.
The availability of more media, including more television channels in Canadian homes, increased availability of local and distant newspapers via home delivery, at the newsstand or via the Internet, and the introduction of free newspapers in major Canadian cities including Metro Ottawa just two weeks ago in this city, taken together, have greatly increased competition for newspapers and television from other media.
Less visible to those not involved in the business side of media is that fragmentation not only dilutes TV viewers and newspaper readers by spreading them around many more media platforms, but it also, more importantly, dilutes the revenues necessary to sustain media businesses.
Just as consumers spread their loyalties around more choices, advertisers allocate their spending across a wider selection of media. The increased availability of media provides advertisers with greater flexibility to calibrate and target their ad buys to reach audiences with desired demographic characteristics. For example, the golf channel is probably a pretty cost-effective way to advertise government clubs and government balls.
Revenue fragmentation represents a very real challenge to the sustained quality and economic viability of Canadian media, as owners are forced to seek more efficient and cost-effective ways of delivering a better quality product to a dwindling customer base.
Consolidations that have occurred and will continue to occur among Canadian media companies, including cross- media consolidations, are a natural and strategic business response as individual companies seek to maintain and protect a diminishing share of total industry advertising revenues.
Thus, increased concentration of media ownership is indeed a myth. Reduced diversity of voices in news and information is simply not true. Calls for a government mandated breakup of Canadian media companies to make them smaller and less able to compete are ill-founded and profoundly unrealistic.
We have included charts in our written brief that demonstrate graphically what has really happened in the Canadian newspaper and television industries. The important message to take from these charts is that, regardless of how the numbers are counted, media ownership in Canada is becoming more diverse and not more concentrated. Canadians have access to more news and more opinion from a variety of sources than ever before, and that diversity is growing every day.
The ultimate in concentration of television ownership existed at the launch of Canadian television with the CBC in 1952, when Canadians had access to only one domestic channel. By the 1960s, cable had arrived and Canadian homes in the larger cities soon had good quality access to all major American, as well as Canadian, television networks, in addition to local independent channels.
By the 1980s, specialty channels had arrived in Canada. Specialty channels do not have transmission towers and are distributed to Canadian homes only via cable, satellite and telephone company distribution services. They have the characteristics of national network television through their coast-to-coast distribution, however. Since 1980, the Canadian Radio-television and Telecommunications Commission has issued many new television broadcasting licences for both conventional and specialty television services. Digital specialty channels arrived in 2001, creating the 200-channel universe for cable television and a 300-channel universe for satellite subscribers.
It is important to be aware that specialty channels have certain unique advantages. They receive a share of the subscription fees paid by consumers to cable and satellite companies, in addition to competing directly with conventional television for advertising revenues. Conventional TV stations, which are included on the basic tier of cable and satellite services, do not receive a share of the substantial fees that consumers pay monthly for their basic services.
Added to that, the CRTC permits many of the most popular U.S. cable channels, such as Arts and Entertainment, A&E, Spike, CNN, CNN Headline News, and soon, Fox News, to be carried on Canadian cable and satellite distribution systems. Collectively, these U.S. channels receive some $250 million annually in subscription revenues from Canadian consumers while making no contributions to the public policy objectives of the Broadcasting Act. Those foreign channels are also exempted from paying licence fees to the CRTC.
It is really quite extraordinary that American cable channels receive substantial compensation for the use of their signals in Canada, but Canadian conventional television stations, including the CBC, are not compensated. The net result of all this must be obvious. Conventional Canadian television, which remains the only component of the industry that provides local news and local information, as well as original national and international news programming, has faced a significant overall decline in its share of viewers and a substantial dilution of its revenue base. Specialty television has captured all the growth in revenue share for the past several years.
What should be of interest in this review is that Canadian specialty television provides no major original news programming with the exception of CBC Newsworld and CTV Newsnet, both of which derive their national and international news coverage from their parent conventional network news programs and journalists. Other Canadian specialty television channels provide no Canadian news programming whatsoever.
In terms of viewer concentration, no Canadian broadcaster dominates Canadian television viewing. Figure 1 in our written brief shows that CTV, together with the CTV-owned specialty channels such as The Sports Network, TSN, have the largest share of viewers at 19 per cent. CanWest has approximately a 14-per-cent audience share. CHUM accounts for a 9-per-cent share of viewers, while the CBC follows with 8 per cent. Other Canadian pay and specialty services capture 13 per cent of the viewers and other Canadian conventional channels account for about 5 per cent. The balance, roughly a 33-per-cent share of Canadian viewers, fully one third of the audience, tune in to U.S. conventional and cable channels.
Thus, a major challenge for Canadian television is to maintain the ability of the private sector conventional networks to invest in quality news programming at local and national levels as audiences and revenues migrate persistently to specialty television. In spite of all these very real economic challenges, at CanWest we have chosen to invest in news. We have brought an additional choice to Canadians in their daily rendezvous with national TV news with the introduction of Global National with Kevin Newman. Steve Wyatt will have more to say on that program in a few moments.
Ownership of Canadian newspapers has also evolved over the past decade. If you look at the ownership of the Canadian daily newspapers tracked by the Canadian Newspaper Association, as shown in Figure 2 in our brief, concentration of newspaper ownership actually peaked six years ago, in 1999, with Hollinger then owning 59 out of 106 Canadian daily newspapers. Fast forward to today, in 2005, and Hollinger is no longer a major player in Canada with its holdings reduced from 59 to 10 daily newspapers, none of which is a large city daily. New owners have emerged in Canada including not only CanWest but also Osprey and GTC, while Quebecor has substantially increased its newspaper holdings compared to 10 years ago.
The other new development is free-sheet newspapers available now in Montreal, Ottawa, Toronto and Vancouver, with more to come. Distribution of the Metro Toronto, published by a joint venture of TorStar and Metro International SA, and 24 Hours Toronto, published by Quebecor, together exceed 400,000 copies daily. That is about the same as the Toronto Star and significantly more than either The Globe and Mail or the National Post.
CanWest has its own free sheet magazine called Dose that launched on April 4 in five Canadian cities. Dose is different from free-sheet newspapers, however. It is targeted at the young adult market and youth demographic which, unfortunately, is less likely to read conventional newspapers. To appeal to that audience, which is enormously important to the future of our industry, we have combined other youth-oriented web-based and wireless services with the magazine to develop Dose as a comprehensive youth-oriented national brand and multi-platform media brand.
In recent weeks, we have seen the launch of Metro Vancouver and the Metro Ottawa newspapers in which CanWest has a one third interest, and the announcement of 24 Hours Vancouver, a joint venture of Quebecor and the Pattison group.
Another way to look at newspaper ownership in Canada is by circulation. In Figure 3 in our brief it can be seen that CanWest newspapers taken together account for the largest circulation of any newspaper owner. Even so, CanWest accounts for less than 30 per cent of total circulation of major conventional daily newspapers. When daily newspapers are ranked in weekday circulation, as shown in Figure 4 in our brief, CanWest's largest circulation newspaper, the National Post, ranks fourth among Canadian dailies. In fact, as Figure 4 shows, two of the new free-sheet newspapers would rank in the top ten. Metro Toronto and 24 Hours Toronto would rank fifth and sixth respectively. Quebecor's anticipated launch of 24 Hours Vancouver is expected to have a distribution volume at launch about the same as Metro Vancouver, placing those two newspapers in a tie for eleventh place based on the daily number of copies distributed.
Thus, it can be seen that the premise of excessive and growing ownership concentration or the alleged impact of concentration and cross-media ownership on diversity of voices are simply fiction. Perhaps the most significant positive development in Canadian newspaper journalism in recent years was the launch six years ago of the National Post. Competition between The Globe and Mail and the National Post has, by most accounts, raised the quality of both newspapers, to the benefit of journalists and consumers alike. It is unlikely that the National Post would have survived as a stand-alone newspaper given the costly and sustained start-up losses incurred by the newspaper in the brutally competitive Toronto newspaper war and market. The ability of CanWest to provide certain centralized services to the National Post as part of a larger media group has contributed significantly to that paper's viability and to the company's willingness to continue to sustain significant financial losses at the Post.
In summary, fragmentation, not concentration, is the challenge facing Canadian media. Indeed, the business challenge for the media is to maintain the quality of reporting on news and information in the face of fickle audiences and revenues that are scattering in all directions to take advantage of news available on television, the Internet, new free-sheet newspapers, web browsing, hand-held wireless devices such as BlackBerries, and soon television delivered to mobile telephones.
In that challenging business environment, consolidations among media companies should be seen as a natural business response to those circumstances. Even so, consolidations will not be sufficient to reduce the trend toward greater media fragmentation and increased diversity as new sources contribute to disintegration much faster than consolidations can glue audiences back together.
Against that background the committee should be extremely cautious in its consideration of possible changes to public policy affecting the media. There is no doubt that some unions, journalism organizations and academics perceive issues as a result of the necessary adjustments made by media companies as they adapt to a new, more demanding and profoundly different set of marketplace circumstance. That media companies must constantly strive to innovate with new products and services to become more efficient and cost-effective is unassailable. That this will require media companies to constantly reinvent themselves and to find new and better ways to deliver the news to Canadians is indeed a fact of our life. Nostalgia for the past and a desire to protect the status quo is not a viable solution in an industry undergoing such transformational changes and challenges as exist in today's media.
With those cautionary words, I want to turn now to my colleagues to discuss some of the fascinating things that we do on the front lines of Canadian journalism at CanWest.
Mr. Steve Wyatt, Vice-President and Editor-in-Chief, Global Television News: It seems appropriate that I should be talking to you at the magic hour of television news. The hour between six o'clock and seven o'clock has for decades been a destination for Canadian families to tune in to their favourite local television station to hear the digest of news from their own backyards, from the nation and from around the world. How the world has changed.
The TV news-consuming audience is not what it used to be and no longer is the six o'clock news the only destination. The delivery of news and information on television is continuous and never before has there been such a vast array of choice on conventional broadcast stations, specialty channels and satellite. Our greatest challenge in 2005 is to earn audience loyalty in an ever-fragmenting universe.
To that end, CanWest has invested heavily in our news operations since it acquired the stations previously owned by Western International Communications, WIC, in 2000. Those stations included three in British Columbia, four in Alberta and one in Ontario. With that purchase, Global was in a position to compete on a national scale against CTV and CBC, and offer a compelling third voice in news broadcasting at both the local and national levels.
CanWest has identified television news as a central pillar in its strategy to generate content we produce and own, thereby reducing our reliance on acquired foreign programming. Most significantly, Global National News with Kevin Newman was launched in September 2001. In its very short time on the air, utilizing not only its own dedicated resources but also those of our affiliate stations and our partners in print, the program has emerged as a new voice originating in Western Canada.
Global has succeeded against the more traditional network newscasts at a non-traditional time for national news, the supper hour. There is now a three-way race among national newscasts in this country. For the calendar year 2004, it stacked up this way, according to the data provided by the Bureau of Broadcast Measurements: CTV National News, with an average audience of 956,300 viewers in the two-plus demographic; CBC National, with an average audience of 776,000 on the main network; and Global National with 712,000 viewers.
We have succeeded in becoming a serious player in just three short years. This is even more significant when you consider that Global National is aired on just nine television stations. Compare that to 22 for CTV and 25 for the CBC. All the more significant at a time when the total viewing audience is much lower than at the 10 p.m. and 11 p.m. time slots used by our rivals. As part of our commitment to attract more audience at Global National, we recently expanded to seven days a week with Tara Nelson anchoring on the weekends.
Global National's success in a short time is the result of a fiercely independent team of writers, producers and journalists headquartered in Vancouver and supported by teams stationed in every region of the country: bureaus in Ottawa and Washington D.C. plus freelancers based in London and Tel Aviv round out the news-gathering resources for Global National. I am pleased to tell you that our new and unique voice has been recognized by the Radio- Television News Directors Association, RTNDA, with their prestigious Edward R. Murrow award for our coverage of the last federal election. We packed the entire program into a bus and travelled across the country broadcasting Global National live from different communities for the duration of the campaign.
The national team is in turn supported by local news operations at our various stations across the country. Again, Global has made a significant investment at the local level to expand our news presence. In Alberta last year, for example, we expanded our local news broadcasts in Calgary and Edmonton, offering an additional 30 minutes of news at 5 p.m. These markets now follow the model of our very successful news operation in British Columbia where we provide 45 hours of local news every week, not including the national news broadcast, which I believe is more than any other English language local news operation in Canada.
In Ontario, we added a three-hour morning news program Monday through Friday and a national current affairs program, Global Sunday, produced in Calgary, which has succeeded in a very short time in becoming one of the most watched current affairs programs in the country. It is interesting to note the remarks issued recently by the Canadian Heritage department and its detailed response of the Lincoln report, which made over 90 recommendations on how to improve the Canadian broadcasting system. In its April 4 response, the government said it ``intends to use its powers as set out in section 7 of the Broadcasting Act to direct the CRTC to ensure that Canadians from communities of various sizes have access to an appropriate level of local and regional news and public affairs programming from a variety of sources.''
I would like to point out to this committee that there are already locally produced programs in many Canadian markets that are not being seen by Canadian consumers. That is because it is not a requirement under CRTC regulations that satellite distributors carry all local Canadian signals. The use of direct-to-home, DTH, satellite services is anywhere from 25 to 40 per cent of Canadian households, depending on the region of the country. In some cases, communities are being denied access to their local television station. This is the case in Kelowna, B.C, where news programs produced by the Okanagan's very own CHBC are not carried by the satellite distributors. This small community television station dedicated more than 12 hours of uninterrupted coverage a couple of years ago during the devastating forest fires that ripped through B.C.'s southern interior. The station's coverage was later turned into a full- hour documentary that won top national honours from the RTNDA as best documentary against some pretty stiff competition. Ironically, satellite penetration in that region tops 20 per cent, and those viewers were not able to watch their home-grown coverage of the crisis.
Another key part of our strategy in expanding our news and current affairs operations has been a partnership with the metropolitan dailies. We made a significant investment in installing remote-controlled cameras in every Metro daily in the country, which news directors at any one of our television stations can tap in to. This has been extremely valuable for our viewers to get access through another medium to the journalists they read every day. The print broadcast partnership has been especially effective in our coverage of big national and international events, from the war in Afghanistan where video journalists teamed up with CNS reporters to the war in Iraq where Matthew Fisher, embedded with U.S. troops, reported directly into live coverage provided by Global National with Kevin Newman. Most recently, our award-winning federal election campaign coverage drew on the resources of our website, every local television-station news operation, right through to the top columnists for the National Post. Our broadcast and print journalists work together to provide unique, comprehensive coverage on both a local and national level.
While we utilize our various resources to serve our own audiences in the spirit of independent editorial decisions, those decisions reign supreme. We encourage original enterprise reporting at every level based on a solid understanding of each individual market. With apologies to my friends in print sitting with me here, the morning newspaper headlines do not guide the decision-making in television. We measure ourselves on how prominently our original content the night before has landed on the front pages of the next morning's papers.
The partnership is an important part of our promotional strategy. As private broadcasters we depend on advertising to generate revenues so we can continue to invest in our television news expansion. We can promote newspapers during very valuable air time, and in exchange, we are given valuable print advertising space to promote our news programs. This is particularly valuable to our smaller television stations which may not otherwise be able to afford second-party advertising to promote their original Canadian programs. Together, all these pieces will help secure a future for Global News as a vibrant and distinct voice in Canadian journalism in the multi-channel universe. As we move deeper into the digital realm, our combined resources will allow us to compete more effectively on an international and unregulated playing field as we develop new ways to deliver Canadian content through broadband and wireless technologies.
From the television perspective, big is a good thing for us. It has helped us support and grow our news operations at a local level and introduce a third successful voice on the national news stage. We will continue to champion local independent decision-making and exploit our properties to secure our future on an international global scale.
Mr. Gerry Nott, Editor-in-Chief, Canadian News Desk, CanWest News Service, CanWest MediaWorks Publications: I appreciate the opportunity to appear before you to explain what the Canadian News Desk, CND, is, where it fits in with the CanWest group of newspapers, and the role it has played in enhancing the quality of our newspapers and television news programs since our launch two years ago. As then Deputy Editor of the Calgary Herald, I was invited in July 2002 by Murdock Davis, then Vice-President Editorial of CanWest, to attend a meeting with Patricia Graham, then Managing Editor of the Vancouver Sun, and Don Butler, then Executive Editor of the Ottawa Citizen. Mr. Davis challenged us to produce a plan that would see the creation of a national editing desk serving all of our editorial operations, newspapers, television and online. It was to have several tasks. By leveraging the vast expertise of the 1,000-plus journalists at our newspapers and TV stations, we were asked to find a way to share the best work they create daily across the country for our papers in a timely fashion by building and creating a CanWest-wide web-based assigning system.
We were asked to find ways to avoid duplication of assignment, thereby freeing local resources to focus on the local mission. By harnessing the reach of our newspapers, we were asked to determine how to coordinate and assign special projects that provide high-calibre quality that is unique, and great content for our papers. By playing a coordinating role, we were asked to find a method of enhancing coverage of major breaking news events so our writers working together could provide a varied and rich file of stories for our papers and television stations. By hiring carefully and with a very high standard, we were asked to create a national senior writing team whose work, by virtue of its uniqueness and quality, would fight daily for space on the front pages of our papers. We were asked to find a way to take advantage of the depth of talent of our papers and share it, to find a way to do once for all papers those functions and assignments that were being duplicated, and to foster and build a platform for excellence in journalism at CanWest.
How did we do it and does the CND work? We have a 19-person editing desk in Winnipeg set up along the lines of a traditional newsroom with news, sports, business and arts editors. Every day, each of these editors speaks with their colleagues at our 11 newspapers individually. They also host weekly conference calls with all those editors in their content areas. We learn what our papers are assigning, how their staffs are being deployed, and most importantly, what stories they are working on that might have national appeal. Those assignments are entered into our assignment website called News Sked, and from there, the CND identifies stories of national interest and produces a news budget detailing the best work CanWest writers are creating in each of those content silos every day. We update our news budget throughout the day so that by day's end we will budget approximately 80 stories available for sharing and exchange among our newspapers. Our editors work through the day to extract those stories from our papers in a timely fashion, edit them for national perspective and move them to our papers and commercial clients. That content has gone a long way towards making our papers unique in each of the markets they serve.
In addition to our daily role, we also bundle stories from our papers in specific content areas such as fashion, food, homes, personal finance, auto and health, and re-edit it for a national audience, and circulate it to our papers for use in their specialty sections. We also do the same for major features that appear in our weekend papers, thereby providing a steady stream of high-quality, Canadian-produced content.
It is also worth mentioning the impact our writers' group has had on our newspapers. We have seven specialty writers whose work regularly illuminates the front pages of our papers. Among those writers are Randy Boswell, the only journalist in the country who has Canadian history and Canadians abroad as his beat area; Misty Harris, whose cutting-edge reporting on pop culture leads that field; and health writer Sharon Kirkey, whose excellent work has recently been honoured with a national newspaper award nomination. Their by-lines alone have appeared over 3,000 times in the last 12 months in papers that use our news service.
Has the CND made our papers better? By any measure we can apply, the answer is a resounding, yes. Until we launched the Canadian News Desk, there was very little chance that the best work — of the grand-daddy of NHL hockey writers, Red Fisher, for example, would appear in our papers outside the Montreal market. Our predecessor, the Southam Network, was under-resourced, under-sold and under-utilized. There was virtually no way for the amazing work of The Vancouver Sun's Kim Bolan, far and away the country's leading journalist covering the Air India tragedy, to make its way into our papers in eastern Canada, as it did during the recent acquittal in that dramatic case. It would have been impossible to coordinate the coverage of the Mayerthorpe shooting, that saw reporters and photographers from the Calgary Herald, the Edmonton Journal and Global Television working together to produce the nation's most authoritative and in-depth coverage of that incident. Finally, leveraging a partnership we have with the Winnipeg Free Press, their reporters filed to our desk a uniquely Canadian perspective on the recent shooting rampage in Red Lake, Minnesota. Without that arrangement, our papers, like the vast majority of others in Canada, would have relied on the Associated Press file.
We have succeeded in building a culture of cooperation between newsrooms where they have come to understand that their newspapers are better for working together and leveraging the strengths that exist in our papers. We have done this by creating a culture of service, not command and control, where editors can see a measurable, qualitative impact on the operation of their newspapers. At the end of the day, it is our readers who win. They win by having access to the best writing and photojournalism being done at CanWest newspapers. They win by reading authoritative work written by specialists who are among the best in their fields in the country. They win by having access to opinion leaders at each of the papers whose perspectives are as varied as the weather.
I want to speak for a moment about how CND integrates with our broadcast colleagues. Global Television has access to our content in real time. While not every story we pursue is easily translated into a television clip, we have had many examples where the expertise of our staff has enhanced their newscast by sharing information and making guest appearances. More importantly, with the mutual cooperation of Global, we have been able to extend their reach in international reporting, often matching a camera crew of theirs with a print journalist of ours to deliver Canadian perspectives on major breaking stories. Most recent examples would include the coverage of the devastation caused by the tsunami in Asia, where CanWest writers and Global cameras combined to provide compelling stories to television, which on its own lacked the resources to cover that event with the reach that we were able to provide. Last month, CanWest sent senior writers to Geneva and Vietnam to report in depth on the frightening prospects surrounding the outbreak of the avian flu. A Global camera operator was with them. As a result, Global National aired two special reports. Global Sunday, the weekly national talk show, aired a debate on the issue, accessing the expertise of our writers in the field. In addition, the exceptional photography of the Global camera operator resulted in several still photos appearing in our newspapers.
Convergence, as we have managed it carefully, has enhanced news coverage by Global television, broadened the reach of our newspapers through access to their bureaus in places we are not, and helped us do things together better than we could have ever done them separately.
In closing, the Canadian News Desk has carved itself — in fact, has earned itself — a permanent place in the landscape of journalism in Canada. We are proud of our accomplishments. We are proud we have made a difference, and our hope is to continue to provide a valuable service that is unique not just in the country but around the world.
The Chairman: Senator Carney has an imperative responsibility elsewhere, and I know she has questions that she wanted to put to you. Before turning to Mr. Anderson, I will give Senator Carney a chance to ask her questions.
Senator Carney: If the witnesses agree.
The Chairman: I will get back to you. I promise.
Senator Carney: Was Mr. Anderson speaking on public policy issues?
Mr. Scott Anderson, Editor-in-Chief, Ottawa Citizen, and Vice-President and Editor-in-Chief, CanWest MediaWorks Publications: A little bit, yes.
Senator Carney: What were you going to talk about?
Mr. Anderson: I will talk about some government policy that I think is interfering with freedom of the press.
Senator Carney: Your brief is extremely valuable. It is loaded with a lot of valuable information. It is a lot for us to absorb from your fast-paced delivery, except possibly for Senator Munson.
I want to ask specifically about competition policy and some of the government policies. If concentration of ownership, convergence and the operation of CanWest as you outlined it in gratifying detail, if concentration is a myth or a fiction, or the negative impacts of concentration are just a myth or fiction, why is there so much concern out there, which has been expressed to us, about the concentration and the dominance of CanWest in Canada's media market? The concern is real.
Mr. Camilleri: I do not deny it. We have heard the concern. In our statement here today, we tried to point out that on the facts, it is a myth that any one company is as dominant as any of our critics assert. It is hard to speak just in generalities, but I think a lot of them are driven by special agendas and interests. It is easy to assert that somebody is too big, but look at the facts. The fact is that Canadian consumers, viewers and readers have more choices at their disposal than at any point in history. You can sit in your living room and read any newspaper from any point in the world, anywhere around the globe. You can watch 200 to 300 television channels. You can consume and listen to any single radio station you wish from any point in the world. It is just a myth to say that any one entity can dominate media. It is not borne out, the way technology has changed our industry.
I would respectfully submit to any of those people that, as I said in my opening statement, their assertions, and we have read them in the transcripts, are not backed by quantitative analysis but rather anecdotal stories. I defy them to deny that. Today, because of the Internet and changing technology, you can consume media from any point in the world, any time you want, anywhere you want on any device you want, virtually.
Senator Carney: I think we certainly have heard a lot of evidence and agree to that, but there are some markets where CanWest, despite or because of the operation, I suppose, of the Canadian News Desk, where the same material is repeated in all media. I am thinking of the Vancouver market where CanWest is dominant.
In simplistic terms, competition policy concerns itself with monopolistic market power. I think that is a fair summary. In the Vancouver market, which has the National Post, Vancouver's The Province, The Vancouver Sun, most of the weeklies in the area, the North Shore News, Global, The Vancouver Courier, et cetera, in the past, there has been concern about the dominant position of CanWest in that market. Has any government agency ever raised that with you? Let me point out that it is a longstanding concentration in the Vancouver market.
Mr. Camilleri: I would like to speak to it, and then I will ask Ms. Bell to speak to some of the history.
Senator Carney: There is concern that there is no legislative reporter in Victoria at the capital, reporting solely on legislative material stories for CanWest. Also, I can pick up four of the newspapers in the area, the Province, the Sun, the National Post and the Victoria Times-Colonist, which covers much of the same area, and the same story is repeated word for word in all four papers, which is hardly diversity. Do you address these market situations where you are very dominant.
Mr. Camilleri: Specifically dealing with Vancouver, I would like to deal with it in certain pieces. Let me speak to the issue of dominance. Ms. Bell will speak to the history in terms of the government review, because our assets were a result of acquisition. I will have Mr. Wyatt, Mr. Nott and Mr. Anderson speak to some of the specific examples you cite.
In terms of dominance in Vancouver, or the alleged dominance in British Columbia or Vancouver, you have to bear this in mind. In radio, we have a zero-per-cent share of marketplace. In television, CHUM has emerged as a new player in the market. CTV has continued to expand. All of the specialty channels reach into British Columbia. In terms of newspapers, with the presence of the all the competitors, with the emergence of Metro, from the Pattison Group and now with 24 Hours with Quebecor, those two papers alone rank 10 and 11 in the list of national circulation.
Senator Carney: They are targeted to a specific market.
Mr. Camilleri: Dose, our paper, is targeted to a youth market. Metro very much is in competition for traditional metro daily newspapers. That has been borne out with the history of the launch in Toronto and the impact it has had on the Sun group and the Toronto Sun, and even The Toronto Star. It is very much a type of metro newspaper.
In terms of the alleged dominance again, with respect, it is not borne out by the facts when you look at audience reach and the plethora of choices in the marketplace.
Senator Carney: Let us talk specifically about the Vancouver market, the two daily newspapers and these others. Metro is a new player. Other newspapers have come and gone in that market. I do not want to blur the story or the questions in terms of Metro. I am asking about where the dominant market share is held by CanWest, good or bad, I am not arguing that. I am not in the business of judging quality of newspapers in Senate hearings. That is for the privacy of my own living room. How do you deal with those specific concerns about Vancouver? Mr. Wyatt, who is an old friend of mine, is still based there.
How do you deal specifically with these large market areas where you are the dominant figure? Also, in the communities, and please do not tell me that we have diversity because there are Chinese language newspapers.
Mr. Camilleri: This predates me, but when we purchased the WIC stations, it was reviewed by the CRTC and approved as not creating disequilibrium in the marketplace or a dominant position. When we acquired the newspapers, the Competition Board reviewed the acquisition and determined it would not create a dominant position in the marketplace. Both those situations were reviewed by the appropriate and applicable government agencies and it was determined that an abuse of dominant position was not created.
Senator Carney: No one has done it recently, in terms of the newspapers?
Ms. Charlotte Bell, Vice-President, Regulatory Affairs, CanWest MediaWorks Television and Radio: No, but the CRTC looked at the relationship between newspapers and television and we have a code of conduct to deal with that, in all the markets.
Senator Carney: We are interested in the code of conduct. Could you share that with us?
Ms. Bell: You would like us to file it?
Senator Carney: Yes.
Ms. Bell: We could file it with you. I should point out also when we acquired the WIC television stations in 2000, CHUM was not in the marketplace at all. Their Victoria station was licensed further to that, and then they acquired our station, CKVU out of Vancouver. The commission has also licensed two other services in that marketplace, Trinity Broadcasting and Multivan. There are four additional television stations. That is in a short period of time. Even at that time when those stations did not exist they had determined that there was not undue dominance.
Senator Carney: The answer to us is that the government competition policy as administered — you passed the blood test on that.
Ms. Bell: Either that or additional voices.
Senator Carney: I should point out to my fellow senators that CanWest has done something very helpful to us. They have identified public policy issues in their brief. They have labelled some off limits where they do not think we should touch them. It is a very interesting aside, anything that interferes with CanWest is off limits, which is fine. They have really assisted us by identifying some of the policy issues where recommendations would be helpful and I want to commend them because a lot of our witnesses have not done that. One area I would like to touch on is what are CanWest's views on foreign ownership, or the increasing limits of communications companies to be held by foreigners?
Mr. Camilleri: Historically, we have taken a more liberal view on foreign ownership than our competitors, our colleagues in the industry. That is based on the fact that we believe in the globalization of the media market that is happening and the fact that we have holdings in other parts of the world — Australia, Ireland, and New Zealand — and the need to expand globally to be successful, and to maintain our place.
Senator Carney: I am talking about the ownership of Canadian —
Mr. Camilleri: We are also concerned about the fact and the interlinkages between broadcasters, cable companies and communications companies. If the playing field is altered for one or two of those constituents but not broadcasters, that can create an unfair advantage, we believe, so we have concerns about that.
Senator Carney: You have concerns, but in general, have you a view on whether Canadian communications conglomerates, of which you are definitely one, should have an opportunity to raise capital in foreign markets by the sale of their shares to non-Canadian interests? I have some reservations because I think some companies use it as a way of bailing themselves out of debt; sell the shares in the company in order to alleviate the debt load. In general, are you supportive of the present restrictions on Canadian communications companies?
Mr. Camilleri: We believe the playing field should be equal for communications companies, broadcasters and cable companies.
Senator Carney: One last question on convergence: We have heard about convergence of media, and you have outlined a lot of the efficiencies in this area, but where do you take your profits, in your cross ownership?
Mr. Camilleri: Where do we take them?
Senator Carney: Let me rephrase the question. Has convergence been profitable for you?
Mr. Camilleri: I have been in the company less than three years. Convergence has allowed us to do things such as continue to sustain and grow the National Post, and to launch a new multimedia platform and new voice for young Canadians in Dose. It has allowed us to launch, grow and expand Global National. It has allowed us to launch a books division, which now provides an opportunity for journalists to have their works published that heretofore may not have been.
We are still in the early days of tapping it, I believe, but I am passionate in that it has allowed us, and afforded us, a number of opportunities that otherwise we would not have been able to take advantage of.
Senator Carney: Thank you, that is helpful to us.
Senator Munson: Should existing foreign ownership regulations be changed? Should they be lifted?
Mr. Geoff Elliot, Vice-President, Corporate Affairs, CanWest Global: CanWest has taken the position that we are not necessarily seeking a change in the status quo. We filed written briefs to the National Heritage Committee of the House of Commons and also to the Trade and Industry Select Committee on this issue. Originally, we suggested that we would be comfortable with a relaxation in some measure, of the rules on a reciprocal basis. In other words, the Government of Canada should seek relaxation of the same rules in other countries, and that we should be prepared to relax our rules on a reciprocal basis. Then, we determined that it was not likely to happen in the broadcasting sector, so our concern then became a competitive concern with respect to other components of the industry with which we compete.
In that context, as Mr. Camilleri said a few moments ago, our position is, if you relax the rules for telecom companies, some of which own broadcasting entities, and if you relax the rules for cable companies, some of which own broadcast channels, then you have to look at what is happening for pure broadcasting companies as well.
The Chairman: This is an unusual way to conduct a hearing, but I think I explained to you why I wanted to give Senator Carney her chance. We revert.
Senator Carney: I am missing the good stuff on public policy.
The Chairman: We will fill you in.
Mr. Anderson: Thank you very much. I will try to get my momentum back here. I will be brief. I will explain to you what I do at CanWest, both as an editor and national vice-president, because that is perhaps an unusual role.
I want to add to what Mr. Nott has said and explain how CanWest newspapers cooperate to make the chain and the industry better within an environment of fierce independence. I would like to finish with a brief outline of some of the things I believe this committee could do to address the real issues around press freedom.
I want to say for the record that I feel I have the best job in the business as the editor of the Ottawa Citizen. It is a front-row seat for the biggest show in the country. I love my job. I say that because I think there has been some misinformation, some of which may have made its way before this committee, about the life of a CanWest editor, and I feel obliged to clear that up.
As with all CanWest editors, I am responsible to my publisher for the editorial content in my newspaper. There is no éminence grise in some corporate office telling me what to do. No one tells me which stories to publish, which headlines to write or what projects Citizen journalists can undertake. No one from CanWest has instructed me to spike a story or drop an idea. I make the decisions now as I did when I became editor under Hollinger.
It is only necessary to look at the editorial content of a group of CanWest papers on any given day for it to become obvious that this is the case across the country. Each paper is an established brand in its market, and each has its own personality and relationship with its readers. Each newsroom has its own well established culture.
News editors in Montreal know almost instinctively what a Gazette story is, just as editors in the Citizen know what makes a good story for this market. No one has tried to change that. CanWest editors exercise their own news judgment and certainly do not always see eye to eye. Just the other week, an editorial in the Province in Vancouver referred to the Citizen as ``snivelling.'' We are plotting our revenge.
My colleague Gerry Nott has explained the way the Canadian News Desk works and how it facilitates sharing the best copy among the newspapers. With CND, CanWest has finally achieved what had been a long-standing goal of this chain under both Southam and Hollinger. However, you should not be under the impression that CanWest papers are just about shared copy. Most of the stories in the Ottawa Citizen, for example, are generated right here in Ottawa. The percentages are very similar across the country. That means that our newspapers remain very local.
When you add the contribution of CND of CanWest News Services into the mix, fully 75 to 78 per cent of our stories are generated within CanWest. That, I am proud to say, provides our readers with a file they cannot find anywhere else.
As editor, I am also free to establish the daily editorial stance of the newspaper within the general direction and positioning of our editorial policy established in consultation with the publisher, as in most newspapers. Again, I have the considerable freedom that newspaper editors expect in this regard. Again, it can lead to disagreement.
Two weeks ago, David Asper let me know that he profoundly disagreed with an editorial position the Citizen took. We had argued strongly against the publication ban at the Gomery inquiry. Mr. Asper's view was that natural justice demands that the witness testimony be suppressed because each was facing upcoming jury trials for alleged criminal acts. As an editorial board, we reject publication bans out of hand and always will. I invited Mr. Asper to share his point of view in an op-ed article that appeared the next day. I have copies of both the op-ed article and the editorial for your records.
What is significant about this particular case is that things worked as they should have. The editorial board came to a reasoned, well-argued conclusion, and David Asper countered with a reasoned, well-argued and, I think, wrong response. There are certain disgruntled outsiders who would have you believe that things work differently. They are wrong.
I also wear a corporate hat. As Vice-President and Editor-in-Chief of CanWest MediaWorks Publications, which I think is the longest title in journalism, I am responsible for editorial standards, national legal issues, succession planning and coordination of national editorial projects. In this capacity, I do not tell editors what to do. Rather, I try to facilitate discussion to establish journalistic standards and best practices around key issues. We have most famously recently established a common standard for the use of the word ``terrorist.'' We are currently working on a common definition of plagiarism and a policy on the use of anonymous sources. The goal is to raise the bar for everyone.
We also have been working together as editors to understand how our newsrooms affect the community at large in terms of ethnicity, age and gender. We are discussing ways to coordinate our highly successful intern programs to give the best young journalists jobs.
I have given you a sense of what I do, and I would like to turn now to what I would like to see this committee do.
I see the greatest challenges facing Canadian newsrooms not in newsrooms but in government offices. The real threats to press freedom are to be found in bad legislation and the misguided instructions given to bureaucrats. I will deal only with two issues here for the sake of brevity, but I refer you to the back pages of our full submission for further issues. Bear with me as I climb on my soap box.
First on my list of concerns is a lack of uniform access to information. While paying lip service to openness, successive governments and governments all over the country have failed to deliver on promises for more transparency and open access to crucial information that the public has a right to know. Journalists, and one would assume, ordinary Canadians, are continually stymied and delayed in attempts to access information. The prevailing attitude is one of reluctant compliance at best and outright subversion of legislation at worst. Often the information is made expensive by excessive processing and photocopying fees. Access officers have come to believe their job is to wear journalists down rather than to ensure they get the information they need to report the truth to Canadians.
I am sure that everyone in this room believes in a free and open press entitled to survey and scrutinize government operations. This is a keystone to our democracy, and I believe your report is a good opportunity to send a clear and succinct message to government. It is time to give access laws teeth. I am sure you know the Canadian Newspaper Association has done a terrific job leading the charge on this front, and I would urge you to carefully consider their recommendations.
I would like to raise the spectre of government intimidation of Canadian journalists, a topic that, frankly, should never have to be raised before Canadian parliamentarians, but here we are. You will all recall the dark day a year ago January when Canada awoke to learn that dozens of RCMP officers had raided the offices of the Ottawa Citizen and the home of journalist Juliet O'Neill. It is clear now that the raid was not motivated by a desire to retrieve secret documents but by a wish to prevent the government and the RCMP from being further embarrassed over their handling of the Maher Arar case.
This action was nothing less than a Third World assault on Canadian freedom, a tactic conceived and executed to intimidate journalists who were digging into the bizarre and tragic case of a Canadian citizen kidnapped and sent away for torture with, perhaps, the full complicity of the Canadian government. The case of Mr. Arar is before an inquiry now, and that is a good thing.
The case that CanWest is fighting on behalf of Juliet O'Neill and the Citizen, however, is crawling through the courts. We have, to date, spent more than half a million dollars defending this case and fighting for our rights, and we will spend at least that much again before this is over. This is not something an ordinary citizen or even a small media organization could afford.
The raid against Juliet O'Neill and the Citizen was made possible by provisions in the Security of Information Act, a piece of legislation hastily cobbled together in the days after 9/11. It is my belief that this law and others like it give politicians too much licence to stymie press freedom in the name of national security. I believe the example I have given is proof of this point, and I urge this committee to send a very clear message to Parliament that this is not the way things should be done here. We do not need jackboots in Canada.
The Chairman: Might I observe that there is a distinction to be drawn between government and Parliament, on the one hand, and the police on the other? We draw that distinction.
Mr. Anderson: With respect, I think in this case the lines became blurred, and with respect to the security of information law, it is the Attorney General.
The Chairman: I take the point about the law. That is certainly a proper field for us to be contemplating, but we do not tell the police what to do. That does not mean that we did not take very seriously the case you have raised. It has come up in our private discussions, and I think in some of our hearings. I am not disputing the importance of the case you raise. I am defending us in saying we do not tell the Mounties what to do.
Mr. Anderson: We will see.
The Chairman: We can give them advice, but we do not tell them what to do.
Thank you very much. There are two quick points I would like to make before I go back to questioners. One is that the copy of your brief that I received is all black and white, and your lovely pie charts come out as a solid block of black. I do not know whether you have colour versions of the brief, or if you have them in shades of grey. It was faxed. It came through the fax.
Mr. Elliot: The originals I provided to the clerk were in colour.
The Chairman: This is a point of clarification for your information. In the brief, you observe in tones of some asperity that this committee, when it began its work, did not bring studies or analyses to demonstrate the need for holding such an inquiry. In fact, the way the Senate rules work, you have to get the terms of reference from the Senate before you can do the studies and the analyses. A committee is not allowed to undertake studies of that nature until it has the terms of reference. That is just for your information. Nobody outside the Senate can be expected to know that.
Senator Johnson: It was wonderful that you mentioned nostalgia because I remember the beginning of this empire with the Aspers when I was a kid. I think it is one of the greatest Canadian success stories there is, so congratulations on what you are doing.
I also think it is great that it is centralized in Winnipeg. I have to commend that, of course, because I am from Winnipeg. When you grow up in the west it is good to have some balance from the centre of Canada to the Prairies.
Like my colleague, Senator Carney, I think this is an excellent document. I have not had time to absorb it all. Sometimes I feel like a complete Luddite in this study because we have so much to learn and review in our report. This is a fast-moving industry that has pushed us to the limits. You are saying that fragmentation, really, and not concentration, is the major issue. Our study says concentration. Where will this take us? I am wondering where is the twilight zone now?
Mr. Camilleri: It is quite simple. What has happened is media companies have been dis-intermediated in their relationship with the end audience. The balance of power has shifted.
In the golden years that we grew up in, media companies could decide what you watched, what you read, when you read it, and when you watched it. A television show came on Thursday at eight o'clock and if you missed it you missed it unless the network decided to rerun it.
Now, because of technological innovation, readers, consumers and viewers are king. They are the power brokers. Where it ends up is that the consumers will have literally an infinite amount of choice, and they will be able to consume what they want, where they want, when they want, and how they want it.
I will give you two quick anecdotes that impact newspapers and television.
Now in the age of personal video recorders, PVRs, which are nothing more than video cassette recorders, VCRs, on steroids, you can record television shows, eliminate the commercials and watch them whenever you want. You can actually record those shows from distant signals in far away places. I can record a show from a British Columbia television signal from my home in Toronto. I do not have to watch what the local signal has programmed.
The second thing is, think of newspapers. I remember as a not-so-little boy running to the front door to get the sports scores in the morning. I do not need the newspaper any more to tell me that. I get the sports scores in real-time at ESPN.com or TSN or whatever. That has fundamentally changed what we do. Where does it end up? We are really there today. The consumer is king, and the consumer is driving the media agenda. The consumer, the reader and the viewer are telling us what they want, where they want it, and how they want it.
Senator Johnson: Is this something that is happening in your operations outside of Canada? Could you tell us about the state of competition in Australia, Ireland and New Zealand, or the effectiveness of media regulation? What have you learned from your foreign operations in terms of what we are dealing with in Canada?
Mr. Elliot: The most striking thing about our operations in Australia, New Zealand and Ireland is that none of those markets is as mature as the Canadian market in relation to the choices that consumers have. One of the reasons for that is that none of those places have the United States next door, and in none of those places do consumers have the ability to tune in to U.S. media as easily as they can tune in to Canadian media, or their own media.
This has a bearing in terms of not only the absence of fragmentation of the audiences but also the absence of fragmentation of advertisers. The bottom line is that our media operations outside Canada tend to be more profitable than our media operations in Canada.
Senator Johnson: I am very much interested in your weeklies. How are you doing in terms of your journalists that work on them and the content, particularly in terms of the cultural side of life in these communities? Is that reported in the weeklies, particularly in British Columbia? I do not know anything about the weeklies in British Columbia. I have never read one. I have only read The Interlake Spectator.
Mr. Camilleri: We are passionate about local news coverage and local reporting in all our media properties. Whether it is television or newspapers, we believe the biggest opportunity and mandate for our local operations is to report what is going on in their local communities to their local constituents. We are passionate about that, and it is a cornerstone of our strategy. It is reflected in the way we make decisions on the allocation of what are not endless resources.
Mr. Nott: Is the question, how are the weekly papers covering culture in the cities they are in?
Senator Johnson: Yes, that was part of the question. The other part of the question is the number of people that you have in the communities covering events, both large and small. I am very interested in the stories from the community, and reflecting people's lives.
Mr. Nott: We reflect the demographic that we target by hiring very carefully. We did Canada-wide searches for people who we felt were very much in the target audience of the demographic. I am not sure there is anyone older than 27 working for Dose. You only need to see their newsroom to realize this is not the Ottawa Citizen, with all due respect.
We have reporters in each of the cities we cover. In Vancouver, we have two reporters who are devoted to covering the local arts and culture scene. If you have not seen the paper, the format for those stories is very short. This is a group that wants its news in a hurry and news it can use.
Senator Johnson: It is youth-oriented, 18 to 34?
Mr. Nott: It is youth-oriented and directed to help them make decisions about how they spend their time. In each city we are in, we have reporters who cover that aspect of their life.
Senator Johnson: I know the Ottawa Citizen. Mr. Anderson, do you have any comments?
Mr. Anderson: I am not really familiar with the weeklies enough to comment on them.
Senator Johnson: One more question on the weeklies. Are your numbers going up in terms of circulation?
Mr. Camilleri: In the newspaper industry around the world, which is more consistent with the trends, there is a long- term systemic decline in circulation in newspapers. The challenge in the industry is to arrest that decline.
Senator Johnson: Is that likely to happen?
Mr. Camilleri: I gave you an anecdote about sport scores. Our readers are turning to the newspaper for something different than what we turned to the newspaper for 15 or 20 years ago.
The challenge for the industry is to find the new content mix that will arrest that decline and is going to resonate with, hopefully, a growing readership base in newspapers. Nobody has found it yet really anywhere in the world.
Senator Johnson: Mr. Anderson, is your readership not increasing at the Ottawa Citizen?
Mr. Anderson: Readership has increased in this latest ad bank. It is up and down, depending on the year and the measurement. Readership overall is steady at best.
Mr. Camilleri: If you plot it over a 20-year period, there may be iterations in any specific period, but it is downward.
The Chairman: In the United States, there have been fascinating revelations about how some newspapers that obviously felt themselves under severe pressure were artificially inflating circulation numbers. Have those pressures been at work in Canada?
Mr. Camilleri: Absolutely not. We have said that to analysts, shareholders, and whatever. We are absolutely confident in the integrity of our numbers and the way they are reported.
The Chairman: I interrupted. Sorry.
Senator Johnson: That is fine. I want to say too, I totally agree with the freedom of the press so that is really critical to keep the readers. I know the young people are not reading papers, so I hope this works with those people and Metro. The numbers do increase, but the consumer is king too in the newspaper world.
Mr. Camilleri: Absolutely.
Senator Johnson: However, the tradition of reading your newspaper in the morning is not there with society today.
Mr. Camilleri: If you look at all the industry studies, there is a variety of reasons for it. There is an infinite amount of choice in getting information from other places and one of the common ones is that I do not have time, and this is for a long time.
The Chairman: That has been true.
Mr. Anderson: The striking thing is this is the golden age of print. There have never been more words on paper than there are right now. There never have been more journalists practicing. Even for the parliamentary press gallery, the problem is not a lack of members; it is bursting at the seams. The growth is in niche market publications, magazines, newspapers, Internet sites and blogs that service these very specific needs of readers. We at the Ottawa Citizen did a survey a few years ago looking at high-technology workers who we felt were not reading our paper enough. After a series of focus groups and market research, it was somewhat discouraging because we found they would read us if we could provide a paper that was geared specifically to their needs, The Daily Me; The Daily Senator Fraser; everything that you have picked. Technology will help us do that over time, but it is also a stumbling block for the traditional broadsheet daily newspaper.
Senator Johnson: That would be terrible. Thank you so much.
Senator Munson: You talked about the scores. I did not wait for TSN or ESPN, especially with the Masters Golf Tournament, I was on the net for hole by hole score. That is where a lot of people are going, particularly a new generation.
You talked about pride in local coverage. Global has been around for 25 years. What about foreign coverage? I know that you send people, and you said in your brief, to various spots and you cover them well. However, certainly a day has to come in a growth period of a company that you should have — at least from my perspective — foreign correspondents at least on each continent covering stories or being in touch to give that Canadian perspective of news coverage. Has there been thought in investing, or in having Canadian reporters sitting, on foreign soil and covering those stories as opposed to what we have seen recently even at CBS and other stations. They are talking about news gatherers who have access to all of this technology and we can package or bundle — whatever you want to call it — in New York or Atlanta. I do not think that does a service to the Canadian public.
Mr. Camilleri: Obviously in dealing with fragmentation, the first issue we grapple with is our economic reality. We believe passionately that one of the ways we can stand out and provide a unique service to our viewers and our readers is by being incredibly adept at covering Canadian news and local stories. That is not to say we are not cognizant of our responsibilities and the opportunities in the international arena. What we have determined to do is that when there is a story of international significance, like the Iraq War, we will assemble the equivalent of a special weapons and tactics, SWAT, team or a tiger team and deploy it. We will deploy significant resources.
Senator Munson: Do not say disaster assistance response team, DART.
Mr. Camilleri: We will deploy significant resources to those international hot spots to get the local perspective. The reality is that right now stories are happening every day around the world. People are hearing about them in real time. If you have a single reporter in a local jurisdiction in the advent of the Internet and 24 hour news channels, people can consume in real time. We have found that we have been successful that when a significant story happens we deploy significant resources to bring a unique perspective on those stories.
Mr. Wyatt: It is a good question. It is one of prioritizing the resources you have at hand to develop a news organization. Global News in terms of individual stations has been a around a long time, but in terms of a national network and developing a nationalist program, it is really in its infancy. We have made a clear decision that our mandate right now is to deliver a clear Canadian voice and grow resources step by step in the Canadian market, while at the same time sustaining a bureau in Washington, DC, and utilizing freelancers around the world. If you look at events in the last three years, since Global National, for example, has been doing a national newscast, we have been utilizing the resources of our print partner and using our own television resource to send SWAT teams around the world. For the last major event, for example, in Indonesia with the tsunami, we were able to get to that region fairly quickly regardless of anybody else perhaps having a bureau closer, and deliver just as high a quality and as perceptive news stories and reports in that region as anyone else. We decide where we are going to pool our resources and deliver the most effective coverage. I think we can do it that way. Would I like to be the BBC and have reporters in every town around the globe? Sure, but I think you can still develop and grow a national news organization, at least from a television perspective, by dedicating resources and funds, targeting your coverage and developing the SWAT teams that Mr. Camilleri was talking about.
Mr. Nott: We have tried to be more surgical about where we go. I made reference to our trip to Vietnam. There were no other Canadians doing that story when we did that. We have also tried to establish on the print side a network of Canadian stringers in those places. At least we can filter some of those stories through Canadian audiences.
Mr. Anderson: I think we have become more sophisticated. I think we all fall in love with the romantic idea of a bureau in every major foreign city. We also know that paying a reporter to sit in a foreign city and do the story of the day is not necessarily the best value. It is better to develop expertise among reporters and then let them travel. That is what we do. The truth is the ease and flexibility of travel now makes it very easy for a reporter such as the Ottawa Citizen's Dan Gardner to develop expertise on policy and news around the world, fly in and cover that and then come home and deliver it to our readers from a Canadian perspective.
Senator Munson: I must be getting old. I enjoyed being a foreign correspondent for ten years and I am sure people in your organization would like to have that dangling in front of them. It seems to me about 10 years ago your company triggered the death of Canadian Press, CP. There was not much of a public debate with the loss of the only bilingual, national, multi-media Canadian news agency. Is there a debate going on at CanWest these days about Canadian Press?
Mr. Camilleri: I am not sure who is saying what. Throughout our organization, if the costs of a service exceed the benefit, then we have to evaluate that service. Right now, we are members of the Canadian Press, except for the National Post. There is no short-term commitment to withdraw, but we continue to evaluate it on an ongoing basis, and we continue to have dialogue with them on an ongoing basis. Our perspective is that if the cost exceeds the benefit, then we have to take a hard look at it.
Senator Munson: Are you prepared to continue to support CP, with the National Post going?
Mr. Camilleri: The National Post was a question of us turning that paper around and trying to make it profitable. The National Post is a unique case where we have to make decisions in terms of sustaining that voice in Canada. I know a lot of people criticize us for the National Post, but I think we deserve credit for keeping it alive. The easy decision five years ago would have been to get rid of it. At the National Post, because of its unique situation, we are making some difficult choices, but all with a view and a commitment to making that paper profitable and making it work. It is not going away.
Senator Munson: Would CanWest try to fill that void if CP was driven out of business? If you did, I am curious how francophone news organizations would get their news from Quebec and how Anglophone news organizations would get their news from Quebec?
Mr. Nott: We are not that far along to have even considered the question, frankly. On the point about the value of Canadian Press, Mr. Anderson runs a newspaper, and the one point I would make is that CP has done a wonderful job of keeping its assessments flat for the newspapers for about ten years in a challenging environment for them. At the same time, since the CND has been launched, our papers have used significantly less CP content. That measures into the value equation that the editors are undertaking as they go through the budgeting process.
Mr. Anderson: With more and more easily accessible news, on the Internet, for example, and across Canada and around the world, CP becomes less and less relevant over time. We have to take that into account when we consider how much we pay for it and what the service does for us.
Senator Munson: If you look at small-town newspapers across the country outside of the CanWest papers, and even the CanWest papers, if you talk about Charlottetown's The Guardian or any of these others, CP is their bread and butter. Who would be the national voice, for example, of reporters, many of whom I have to say are friends, who are sitting in Ottawa and telling the story of Ottawa to the rest of the country? Who would be able to tell that story if Canadian Press was not there? Canadian Press can write on the Internet too.
Mr. Anderson: I guess that is a question primarily for the people who run the Charlottetown Guardian.
Senator Munson: They cannot afford a reporter here because, as you see here in Ottawa, at least over the 25 years I have been here, there are fewer reporters.
Mr. Anderson: I beg to differ. When I was at the Telegraph-Journal in New Brunswick, which is a paper of comparable size to the Charlottetown Guardian, I was managing editor there when we dropped CP. We dropped Canadian Press and hired eight reporters, including a stringer in Ottawa, with the money that we saved from the Canadian Press, and we did very well, thank you. The Associated Press is an enormous part of the CP package, and very valuable. It is difficult to get American news without CP, which is ironic. I am not here to argue for the benefits of small newspapers in the Canadian Press, but I do have to argue from the point of view of someone who experienced it that it is not an obstacle that cannot be overcome. In fact, I would argue that when the Telegraph-Journal did not have Canadian Press, those were its glory years, and it won several national newspaper awards too.
Senator Munson: I am feeling that there is not strong support for a national news service, unless you run it.
Mr. Nott: I am not sure that it is, unless we run it. We have put the Canadian News Desk in place to leverage the expertise of our journalists. The net benefit to the reader and to the people selling the newspapers in those cities is a unique product versus the competition. Senator Carney made reference to the similarities in content between the Vancouver papers, given the CanWest content. It struck me that prior to CND, if we did not exist, those papers would have been full of the same Canadian Press content, and apparently that is not a problem, but when it is CanWest content, it is.
Mr. Camilleri: I do not want to be confrontational on this, but I bristle at suggestions that we would not support a news service unless we owned it. We have never said that, and that is not what we believe. I know there are people out there who assert that. I bristle at it and take great lengths of disagreement to that statement, because that is not what we are saying. That is not what we have ever said. We have supported CP.
Again, in an era of fragmentation where we have declining circulation and declining viewership in our conventional broadcast area, advertising base is fragmented. We are a public company. You see the revenue trends in our conventional television group. We are dealing with profound fundamental issues, and our world is changing. We havr to make difficult decisions. It has nothing to do with whether we own or do not own Canadian Press. It boils down to whether, if it costs more to be in it than the benefit we are getting from it, as a business person, I am not sure how I can justify staying in. Today, we have not made a decision to pull out, other than the National Post, which is a unique situation.
Mr. Anderson: For the record, we do own Canadian Press. It is a cooperative. It is owned by all the newspapers, including CanWest.
Senator Munson: As you understand, I am an old reporter. I have done it for about 32 years, and I am glad you bristled. I was actually looking for a good quote, and you have given me one in the sense of you explained yourself well and in a quite specific way, and I appreciate that.
Senator Tkachuk: Welcome. It is nice to see a western Canadian media company. We do not see any of those here. They are all in Toronto. I always believed it was a result of the public policy that we have in this country that they have all ended up in one place, and that is in the city of Toronto.
We are here to talk about the news, and we are here as a committee discussing public policy. We are not interested in whether you have good news or bad news, but in how we can generate competition and provide a diversity of view and healthy business climate for news organizations to prosper in Canada.
I would like to congratulate you on running your national news on television out of Vancouver. I think that is a plus. We did hear witnesses in Vancouver tell us that you did not have reporters at the provincial legislature in Victoria. Is that true?
Mr. Wyatt: No, that is not true. Keith Baldry is our bureau chief in Victoria.
Senator Tkachuk: Why would people come to our committee and tell us that?
Mr. Camilleri: I have read a lot of things in transcripts and I roll my eyes at them because they are not true.
Senator Tkachuk: Let us not get carried away.
Mr. Nott: The Victoria Times-Colonist does staff the legislative bureau on behalf of the Vancouver newspapers. The Vancouver newspapers differentiate themselves in their market with their columnists, and the papers there have made the decision, based on who they think their readers are, where they should deploy their journalists. Those are local decisions. Both the editor of the Sun and the Province must have, on some basis, decided they did not want to use a local resource for coverage in Victoria.
Senator Tkachuk: Was it a question of misinterpretation that it was the Victoria Times-Colonist newspaper reporter reporting on behalf of CanWest Global newspapers in Vancouver? Is that the way it works?
Mr. Wyatt: I live and work in Vancouver. From a television perspective, for the Global television station, we have a bureau chief in Victoria and a crew there, and from a newspaper reader perspective, Vaughn Palmer, for example, is stationed and writes as the editorial voice in Victoria.
The Chairman: As a columnist.
Mr. Wyatt: Yes.
Senator Tkachuk: We did not have an overwhelming response by journalists from CanWest group companies to come before us to talk about some of the public policy issues.
Is that a result of public policy at CanWest Global or was there just no interest?
Mr. Camilleri: Journalists made their individual decisions whether to appear.
Senator Tkachuk: It just seems strange all the journalists you have and we have heard from so few, if any.
Mr. Elliott: Perhaps I could respond to that. Sitting in the corporate office I was aware that a number of journalists from across the country had been invited to appear. We made it clear to them that it was their decision to appear. However, if they were to appear, they would be appearing in their personal capacity and not on behalf of the company, because the company at some point was going to appear before the committee as a company. My understanding is that at least one or two of our journalists did appear, but it was for them individually to make that decision.
Senator Tkachuk: I have a couple questions about television. Should it be easier for a person to get ownership of a television station or to start a new one than it is under the present regulatory framework? Is it too onerous, should it be less onerous, or is it about right?
Mr. Camilleri: To start a new station?
Senator Tkachuk: Yes. If a person had the money and wanted to start a station in Vancouver, Toronto or Mississauga — as we found out, there was not one in Mississauga, which surprised me, a city of 100,000 people does not have its own TV station — why would someone not start a TV station there? What would hold it up?
Mr. Camilleri: I live in Mississauga.
Senator Tkachuk: Why have you not started a TV station there?
Mr. Camilleri: I can sit in my living room and watch 300 channels on the existing services. If I extrapolate that through with all the distant signals on satellite, it is multiples of that. If you really want to get egregious, on my street there are many black and grey satellite dishes from DirectTV that are tapping into 500 channels in the United States.
Senator Tkachuk: You are saying that it is not the difficulty of getting a licence, or it is the fact that you cannot make any money at it, which is why everybody wants to buy TV and radio stations but they have for a very long time despite the increased competition, satellites, cable and everything else?
Mr. Camilleri: It would be the economics, I imagine. You are right; Mississauga has 800,000 people. If you start a television station in Mississauga, you are competing with the other 200 or 300 channels. That is the reality.
Senator Tkachuk: It seems to be that we need more competition until you get a licence, but once you get a licence, you need less. Let me ask that question again. Should it be easier? Should there be less regulation in starting television stations in Canada? We only have CBC Newsworld as headline news, and we are bringing in Fox, MSNBC and CNN. When Global does not have its own news channel, how ridiculous is all of this? What is holding it up? What is the problem? I do not see the problem, because it is a profitable business and no one can tell me it is not.
Ms. Bell: It is profitable, but to a certain extent large companies have managed through economies of scale to be able to stay profitable. If you are a small, independent player and if you have spoken to some smaller broadcast groups, they would say they have very specific challenges. Fragmentation is killing them.
In fact, we have small- and medium-market stations that are not making any money. If we did not own Toronto, Vancouver, and Alberta, we would not be able to subsidize. I think eight or nine of our conventional stations are unprofitable.
Senator Tkachuk: They lose money?
Ms. Bell: Absolutely, consistently every year.
Mr. Camilleri: For example, with the National Post, we are able to sustain it because of the larger entity. Toronto One is a new station in a large market.
Senator Tkachuk: If the National Post is losing money and eight television stations are losing money, where are you making your money?
Ms. Bell: Toronto, Vancouver, and Alberta.
Senator Tkachuk: Let us go back to that. If we as a committee are looking at public policy, should we decrease the regulatory machinations for getting a television licence? In other words, if you have the money and you want to open up a TV station, should you have the right to do so? If you have the money and you want to have a Newsworld or a Newsnet competition, should you have the right to do so? If you have the money, should you be able to start a radio station? If you could afford to buy the air wave, or maybe you do not have to do that nowadays, in a garage, should you have the right to do so? Would this be a good thing for Canada? Would it be good for the broadcast business?
Ms. Bell: Senator, the licensing process is fairly complex. If you are looking at the conventional television side, for example, when the commission receives an application for a new television service, it would issue a call for applications, and invite anybody who is interested in a licence to apply for it and compete for that frequency. Technically, you cannot buy a frequency. You could put your proposal together, appear at a hearing and make your case. The commission will decide based on a number of criteria, including is there room in the market?
Senator Tkachuk: Should the market not decide that?
Ms. Bell: The market, to some extent, does.
Senator Tkachuk: Why should the commission decide it? The CRTC should be the last people to decide it. We will be grappling with this and having debates on this, so I need your help.
Mr. Camilleri: The point I was making earlier is that the market is determining; the consumer is deciding today because the consumer is king. They have endless media choices right now in which to consume. They are deciding, because if you look at the 20, 30, 40, or 50 years of systemic trends of circulation declines in newspaper, if you look at the ratings and audience-share trends over the last ten years in conventional broadcast network, the audience reach is in half. Consumers are deciding.
Senator Tkachuk: If that is so, why is it that if I want to subscribe to a news channel that does not sound like all the others — namely, Fox — there is not a Canadian one?
Mr. Camilleri: There is not a Canadian Fox News?
Senator Tkachuk: There is not a Canadian equivalent. There is no private news channel in this country except the headline news owned by CTV, and nobody else. Does that not strike you as strange or is it just me thinking that this is rather weird? Why has that not happened?
Ms. Bell: Part of the criteria for licensing new services is to look at what is already in the marketplace and establish whether or not there is room for additional competitive services. Canada is one-tenth the size of the United States. In fact, we do have an incredible amount of choice for a country this size. Clearly, we cannot possibly sustain the amount of competition that you would have in a country the size of the United States.
We have two national news services. You also have CHUM Television that has a regional news service out of Toronto, which is 24-hour news. Then, you have all the conventional television stations providing large amounts of local, national, and international news.
Mr. Camilleri: You cannot deny the impact that CNN, CNN Headline News and eventually Fox News will have in this country in terms of taking eyeballs away from domestic news services. Like it or not, Canadians love to consume cultural content from south of the border.
Ms. Bell: There is a finite amount of dollars to go around the system. Television has to be subsidized by something. Consumers also are willing to pay for specialty services to a certain extent. Again, the more services you add, the more money it costs for them to receive those signals, or the more money you are taking out of the advertising pie.
There is a saturation point. We are at a point where there is extreme fragmentation in the television industry. How many more signals can you add?
Senator Tkachuk: I subscribe to cable, and I pay for television channels that I do not watch and do not need. Surely as part of that package there could be a news specialty channel that could compete with CBC Newsworld that some people would get even though they do not watch it and do not want it. Why has that not happened?
Mr. Camilleri: I cannot speak for other people, but in our case we would look at it in terms of economics and make a business assessment of how much money we would lose if we go into that. We have looked at it historically and determined that we would lose a lot of money if we did that because we would be competing with the incumbents at CBC Newsworld, CTV Newsnet and the American news carriers.
The Chairman: It is my understanding, based on news stories and not on hard documents, that two days ago the CRTC granted Newsnet the right to broaden its range of coverage.
Senator Tkachuk: That was big of them. Should we all thank the government for allowing us another television channel in Canada?
The Chairman: It is simply a point of information. We will provide you with the decision.
Senator Phalen: I am reading from a statement made by Leonard Asper at the annual general meeting of shareholders in January 2005. He stated:
Canada's regulatory environment has not kept pace with the changes. Conventional television is increasingly hobbled by regulatory constraints and discriminatory regulatory practices that favour one component of the industry over another.
For that reason the Company will continue to work with others in the industry to challenge outdated regulations, and seek relief where we feel that our media properties are being disadvantaged.
Could you tell us what the outdated regulations are that your properties are being disadvantaged by?
Mr. Camilleri: I will give you two or three of the hot buttons for us. We believe there is a great disequilibrium right now between conventional broadcasters and specialty channels in the sense that they have two revenue streams — advertising revenue as well as subscription fees — whereas conventional broadcasters receive only one source of revenue — advertising.
From a consumer's perspective, if you watch Global on channel 3, CTV on channel 8 or Home and Garden Television on channel 47, you do not know that one is a conventional broadcast channel, one is a Category 1 this and one is a Category 2 that. They are just channels. We think there is a great disequilibrium there.
We also think there is inequity in the fact that people can exploit our signals without compensating us for it, as well as in time shifting. Time shifting is a wonderful service for consumers. They can be in Ottawa and watching Global British Columbia's television signal. We cannot monetize that audience, and receive no compensate for it, yet the broadcast distribution entities, be they satellite or cable, monetize it. They actually sell time-shifting packages. They advertise the fact that you can watch Survivor eight times a night on various distant signals, and we get no compensation for that. We think it is unfair that people are monetizing our signals and making money from them while we get nothing for that. In fact, it hurts us because we lose advertising because we cannot monetize that audience.
We think the regulations are outdated when it comes to advertising restrictions, particularly in the area of prescription drug advertising. We think those regulations should be revisited.
Those are the three major issues for us; deregulation of advertising, compensation for use of our signal and compensation for carriage of our signal.
Senator Phalen: Philip Lind of Rogers Communications, in testimony before this committee, stated that many of the convergence benefits from combining print and broadcast have not materialized. As a company with interest in both print and broadcast, can you tell us your experience in convergence?
Mr. Camilleri: My experience is, obviously, in the last three years. I think that people have confused consolidation with convergence. Early on, when we purchased the newspaper group, as would happen if two banks merged or two oil companies merged, we were able to provide more cost-effective service in functions such as finance and information technology, so we were able to rationalize in those areas and avoid duplication, which, in turn, allowed us to reinvest in what I would call the true convergence opportunities, which is launching new media platforms and services that ultimately grow the top line and attract new audiences.
Those are things such as the launching and subsequent expansion of Global National, the increased investment of local news, the launch of our new platform Dose, the creation of the news desk and the creation of our books division.
In our company, we are still in the early days but we still believe there are opportunities for us to create new services and new products, and to create new and diverse voices. We think Dose brings a healthy new voice to the Canadian marketplace, particularly for young people, and a variety of media platforms for young people to express themselves and exchange ideas with each other.
It is in the early days. It has not delivered on the hype of five or six years ago, but I think that at times the hype was ill-defined and there was a misunderstanding of consolidation versus convergence. I think people mix the two up.
[Translation]
Senator Chaput: CanWest is the largest newspaper publisher in Canada. According to your documentation, I read that you have more than 1,000 reporters, covering both the newspapers and television. With such a large number of employees and people who continuously work in a world of change, as you said, I would like to know your philosophy on ongoing training for these reporters. Do you have a policy that manages ongoing training? How was it developed? Do they receive any help? Do you offer any bursaries? Are they eligible for sabbaticals? What do you do to make sure that all these people get training?
[English]
Mr. Camilleri: That is a very good question. In the philanthropic report that we provided in our submission you will note that we contribute many millions of dollars to academic institutions that support curricula and training for journalists, et cetera. We continue to expand our own in-house training and development budget to train and develop not only journalists but all of our employee base, because we constantly have to retool our skills because of the way the world is changing.
We are now forging strategic alliances with many academic institutions in every city in the country in which we do business — small, medium and large — which will consist of us creating co-op programs, summer student programs, and hiring graduates, as well as sending our employees back to school for training. As well, our employees are actually going back to school and lecturing and teaching because we think they have something to share.
Yes, we spend many millions of dollars in training our journalists and our workforce across our company, as every company must. It is a big priority for us in terms of constantly upgrading the skill sets and the skill base of our employees.
[Translation]
Senator Chaput: I have another question regarding contracts with freelancers. Some witnesses were critical of the type of contracts the CanWest company offers to freelancers. Some said that this type of contract is exclusive and what we are talking about here is perpetual exclusive rights on texts, for the world.
Could you provide us with more details on the nature of these contracts you have with your freelancers? What does it mean for them? Are there limitations placed on the freelancers?
[English]
Mr. Camilleri: First of all, the freelance contract has existed over many years, which predates some of us, and has been the subject of negotiation. We do not have a standard contract across the country. I will have Mr. Anderson and Mr. Nott talk about it in some detail, but I want to say at the outset that the provisions that some people who have appeared before this committee have expressed concern about, in the entertainment and technology industries are actually quite standard, and the grant of rights for now and hereinafter to be known, technologies, markets, and platforms, et cetera, is very commonplace and very common practice in the entertainment industry. There is nothing unique to those provisions in the newspaper industry. The newspaper industry is not doing anything that is unprecedented or does not exist in many other industries.
Having said that, as a matter of negotiation, we have changed our contracts where we have not been able to reach agreement with the people that we are contracting with, and disagree with the provision. I will let Mr. Nott and Mr. Anderson speak to that.
Mr. Anderson: To be clear, there was one specific contract that caused us some difficulties, and that was confined primarily to freelancers signed up to do automotive reviews for our driving sections. It was a contract drawn up by lawyers, and presented without difficulty to many of the freelancers. We did get some complaints. We reviewed the contract and changed some of the language to reflect those complaints. I think that one of the things we need to emphasize here is the need for contracts in the Internet age. Newspapers have been hounded for years by difficulties with freelancers and lawsuits over archive material and who has the resale rights to that material. Clarity is essential. We have tried to bring real clarity to our contracts and uniformity so that someone who works for multiple CanWest platforms or units does not have 15 contracts to try to deal with. I think Mr. Nott will speak to the way people are being paid, but I think they are more satisfied with the way they collect their money now than they were previously.
That was one specific small contract that caused difficulty. We have thousands, if not tens of thousands, of people with freelance contracts across the country. Trying to bring some clarity to that whole situation is a definite goal. It is an ongoing project.
Mr. Nott: Without trying to take it down to the mini-micro level, I will quickly explain how it worked prior to the contract being in place.
When a freelancer was contracted by the Ottawa Citizen and paid a fee for a piece of work, let us say $200, they signed a contract that gave rights to other CanWest papers to use that material on a percentage-fee basis. For example, the $200 piece appearing in the Edmonton Journal, Calgary Herald, and Vancouver Sun, would offer that journalist 10 per cent of the $200 fee or $20. It was incumbent on the freelancers and editors that used it almost as an honour system to tear that piece of newsprint, submit it with a $20 invoice to the accounts payable department who then mailed off the $20 cheque to the journalist who may or may not know which papers they appeared in. Sometimes they appeared in all of them, and sometimes none.
We brought some order to that by signing and establishing a contract that gave us rights for publication in all of those papers, whether it was used or not, and increased the amount of payment we originally offered at the outset. For example, instead of $200, we paid $250. Sometimes that worked for the freelancer because they were not going to get picked up anywhere else. Sometimes it went the other way, but we simplified it and tried to make it easier for everyone. We recognized that by adding to our rights we also added to the payment required.
Mr. Anderson: As an editor, relying on a harried night-newsdesker to account for freelancers and to make sure they received payment was not efficient, and under the old system, I spent a lot of my time dealing with freelancers who were angry because they had not been paid or they could not get a cheque from a sister paper somewhere, and this has made everyone's life much easier.
The Chairman: You have tens of thousands of freelancers?
Mr. Anderson: Over the years I am sure there have been tens of thousands.
The Chairman: But now?
Mr. Anderson: We would certainly have thousands. We would probably have tens of thousands of contracts in various places across the chain. I have not counted them, obviously, but I am just guessing that over time these things build up. At the Ottawa Citizen we use many freelancers, some on a one-off basis and others on an ongoing basis. I would not be surprised if it was a real number.
Mr. Camilleri: Our archive is 226 years old, so if you go back into the archive and you want to use materials, you have to track all the rights. There would be tens of thousands.
The Chairman: You said you have a thousand-plus journalists. I wonder if you could furnish for us more precise numbers and a comparison with the number of journalists who were employed five years ago in the same operations, comparing apples and apples, if possible, please — if you bought a television station in between times or sold one, whatever — because we are trying to get a sense of what has been happening in terms of numbers of journalists.
Why did you close Southam News?
Mr. Anderson: Southam News became CanWest News Service.
The Chairman: There were a whole lot of journalists who came in one day and were fired. You closed a division, if you will. Why did you do that?
Mr. Anderson: I think the best way to describe that was a rationalization of the National Post bureau with CanWest News Service.
Mr. Camilleri: I believe you are referring to the National Post bureau here in Ottawa?
The Chairman: As I understand it, the National Post bureau and the Ottawa Citizen remain, essentially.
Mr. Anderson: CanWest News Service and the Ottawa Citizen are about half of that bureau, as it always has been. There was a separate National Post bureau, but that did not prove to be very efficient, frankly.
The Chairman: In that bureau, you had some of the best journalists in the country. You just decided they were dispensable?
Mr. Anderson: It was a National Post decision. It was not my decision. The National Post has its own interests here. Certainly, newsrooms over time have gone up and down in numbers, in a variety of areas. The most dramatic decline in newsroom numbers I ever saw was at The Kingston Whig-Standard when it was bought by Southam, and the newsroom is less than half the size it was then. I remember a letter from the then-editor to the publisher saying we cannot function, we have only 69 journalists. Now I think they have less than 30.
Mr. Camilleri: On the concept of the National Post bureau, because that is what you are referring to, I would make two comments. The first is, again the National Post was a unique situation. It was not sustainable with the very significant amount of money that it was losing. The popular and conventional wisdom would have the easy decision at the time to close it. We wanted to preserve it. We believe in the paper, we are committed to the paper, and we believe it provides a unique and different perspective from The Globe and Mail and other papers in the country. We had to stabilize it, so we had to make some tough decisions on the economic model.
In terms of the specifics, as to who stays and who goes, that is a management decision. The publisher and the editor of the Post at the time would have made the personnel decisions. It would have been the people who are most able to evaluate the journalistic resources they had, but it was really about sustaining the National Post.
The Chairman: I understand. It is not the business of this committee to second-guess individual newsroom decisions, whether they constitute staffing, editorial decisions, news judgments or whatever. We are trying to understand the context in which things happen.
Mr. Camilleri: Sure.
The Chairman: Hence the questions.
Mr. Anderson: If you look over time — you have to take a longer view for this — newsrooms, as you know, have gone up and down in numbers over years.
The Chairman: Mostly down.
Mr. Anderson: Last year in the Ottawa Citizen, I hired three new people. This year I have 5.5 full-time equivalent employees, FTEs, in the budget. Those are new resources to do new things.
The Chairman: What does that bring you up to?
Mr. Anderson: I would have to check our numbers; probably around 165 or 170 in total. I do not have those numbers off the top of my head.
The Chairman: You have explained your view on foreign bureaus, but I wonder why it would be that most CanWest papers, which are making money, no longer have their own correspondents in Ottawa. The last time I checked, the only exception was Montreal's The Gazette. There may be another one, I do not know, but for the sake of argument how can you be so sure that a centralized news desk can provide the perspective on what happens in the national capital that is going to affect the individual communities that you serve?
Mr. Nott: First, just to clarify, the centralized news desk is an editing centre. It does not assign the Ottawa bureau. The Ottawa bureau is assigned by the Ottawa bureau chief. The content and production of that news team at the bureau has its work edited by copy editors, and by a political editor or two on the Canadian News Desk. The desk is at the receiving end of the process, not at the assigning end.
The Chairman: My fundamental question remains. Why, in terms of marketing, in terms of reader service, why does one not wish to provide that extra value that says we in Edmonton, or we in Halifax, or wherever, have our own person who, in addition to the national staff which will bring you the best coverage in the universe, will also give you Alberta's, Nova Scotia's or whatever, perspective?
Mr. Nott: The Vancouver Sun has its own reporter on the Ottawa bureau. The Gazette in Montreal has its own reporter in the Ottawa bureau. The Calgary Herald shares a columnist with the National Post in the Ottawa bureau. The National Post has its own reporter in the Ottawa bureau. The only exception is Mr. Anderson's paper which has five or six people in the bureau. The only exception amongst our major metros is the Edmonton Journal.
The Chairman: You have answered the question. In fact, you do see value in doing that?
Mr. Anderson: That is up to the individual papers to decide whether they want to put someone there. It does not work much differently than under the old Southam News Service that you would be familiar with. Some papers have a person there and some do not.
The Chairman: That is not what we have been told. Witnesses have come before this committee and told a different story, so it is important to understand that.
Mr. Nott: It is also worth noting that we are in contact, particularly with the Edmonton Journal, quite regularly. We are cognizant that most of the circulation of our newspaper chain is in the West and it is important that the Edmonton Journal has their needs met. When they want a particular story, whether it is about how the federal government is handling Bovine Spongiform Encephalopathy, BSE, or the Kyoto plan, we become a service bureau to our papers where we involve the political editors in those newsrooms to help us tell us what they want. We do not want to produce stories they do not run.
Mr. Anderson: Speaking about hiring and the number of journalists that we have, I referred earlier to our successful internship programs across the country. We have six at the Ottawa Citizen. I should say the FTEs I have in my budget is my proposed budget so I am looking to include two more interns. One thing we strive to do as editors in the chain is to find a way to keep the very, very best of those young people in the chain, after their year-long internship is up, and to really bring up a new generation of journalists who are not only experienced in a variety of newspapers but maybe cross-trained on other things as well. Senator Munson referred to himself as an old reporter. When I am his age and sitting in this chamber, I hope to refer to myself as an old, fully converged, multiplatform content provider.
The Chairman: You do not have to be old to come here, you know.
Mr. Anderson: Okay, then I am in.
The Chairman: With the Canadian News Desk, a series of questions: Let me ask this as a bundle so you can see what I am driving at. Are papers free to choose whether or not they will use the copy? Are papers free to assign their own people to cover the same story? One of the famous examples that is regularly cited is movie reviews being centralized at the news desk. I am trying to find out how that works in terms of service to the local readers.
Mr. Nott: Let me see if I can get the questions. Are papers free to assign their own reporters?
The Chairman: To cover the same story.
Mr. Nott: It would depend on the story. In the most recent example, the death of the Pope, we had seven reporters in Rome. We felt that the story was big enough and broad enough that there were several angles and ways that the story could be covered. They do not call us and say, by the way, do we have your permission to go to Rome. Usually we find out with a phone call saying, we are in Rome, how can we fit into the file.
The Chairman: They are free?
Mr. Nott: Absolutely, they are free to do it.
Mr. Anderson: Another recent example is the Gomery inquiry. The Gazette in Montreal is covering that, but the Ottawa Citizen, at its own expense and its own volition, has Kathryn May staffing it. We believe that is important to us in our market in the broader, ongoing sense that Ms. May be there, understand everything that is being said and write about it for our audience, which has come to expect that kind of journalism from her.
Where it is a routine story that is not going to be much different no matter who covers it, someone might suggest that we have one reporter cover that news, and other reporters do other things so we can add more value to the readers. We have complete freedom to say no, as I did in the Gomery inquiry.
I do not want to rely on The Gazette. I want my own reporter there, and I need this reporter's point of view.
The Chairman: That applies to news stories. What about movie reviews, book reviews, music reviews, food and other peripheral items?
Mr. Nott: Of that group you described, the only writers attached are movie reviewers — one in Vancouver and one in Ottawa. CanWest decided it would try to create a Siskel & Ebert of Canada, with respect to Mr. Siskel. We tried to do that with Catherine Monk from the Vancouver Sun and Jay Stone from the Ottawa Citizen. We provide those movie reviews across the chain. That does not mean, by a long stretch, that they are the only voices being written in those newsrooms. The Gazette continues to do movie reviews; the Ottawa Citizen occasionally does its own movie reviews; and the Edmonton Journal, for reasons they can talk about better than I can, tend not to use our movie reviews. We have tried to turn these people into convergent stars through appearances on Global television. That is the only area in which we have suggested that these are national writers in this specialty area that you should not go into. Other paid people are into them all the time. In terms of food, fashion and those items, our only involvement occurs when a fashion paper would suggest that they would like to send someone to Milan. Often we will pay for that and have the writer correspond for the news group, and not for the individual newspaper.
Senator Munson: You experimented on your national editorials. Has that gone away or is it still part of it?
Mr. Camilleri: In the three years that I have been at CanWest, I do not believe we have done one, although we have reserved our rights to do them. If they were to reappear it would have to be an issue of importance to our proprietors on which they would wish to express an opinion. If a national editorial were to appear, a number of things would appear. It would be identified clearly as such. The local editorial boards and writers would be free to dissent and publish their own differing opinions.
Senator Munson: That is similar to what we have heard Mr. Anderson describe.
Mr. Camilleri: Yes. If we were to do one, that is how we would do it.
Senator Munson: This is not a trick question but I would like to have your notion of freedom of the press? Does it belong to the owners, the publishers, the editors or, as some witnesses have said, the public?
Mr. Anderson: I tend to think, all of the above. A newspaper at any given time is a product of the passions of the people who work in the newsrooms. I have never relegated that to writers only. I believe that editors have passions and have a true influence on the voice of the paper because they bring their own interests, views, thoughts and ideas for stories, series and regular features. I have also never thought that the publisher had no right to have input and to determine the voice of the paper with his or her ideas, thoughts, theories and passions. I would certainly not decline to hear the proprietors' thoughts, passions and views about what the voice of a paper should be. Ultimately, our readers are the ones who tell us because they call us every day to tell us whether we are hitting the mark. They are the buyers of the papers or the ones that cancel the papers in droves when we do something silly. On the rare occasion, they congratulate us for doing something brilliant. The voice of a newspaper comes from all of the above, and that is freedom of the press.
Senator Munson: The media companies are the only ones that have special protection under the Charter of Rights and Freedoms.
Mr. Anderson: I do not think we have any more protection than an ordinary citizen when it comes to freedom of speech.
Senator Munson: Do media companies owe the country something in return for what has been described as special treatment?
Mr. Anderson: First, I do not think we have special treatment but rather it is the right that every citizen has to free speech. However, I do think that we give back to this country in spades. I do not know of a single newsroom that is not driven by journalists who are there to get a story. The bottom line does not enter into the ordinary journalist's head; it is the story. What self-gratification can I get under my byline by breaking the best story and giving it to our readership? The role of the editor is to ensure that collectively what the journalists are doing is delivering just that. I do not believe we have any special rights but rather that we are exercising the rights that everybody has, perhaps, in a unique way. I also believe that we give back tremendously.
Senator Munson: I happen to agree with you. In my days at a national network, advertising was far away. You never woke up in the morning worried about that, even though it was your paycheque.
Mr. Anderson: It is now as it was then.
The Chairman: The media companies that I know about are newspapers, so I will only quote them. Specifically, I am thinking of the Toronto Star and the Washington Post that have statements of principles, or creeds, if you will. Is there any thought of that for CanWest? I am not talking about political positioning but rather about journalistic principles.
Mr. Anderson: In fact, we have one.
The Chairman: Could we see it?
Mr. Anderson: Certainly, we will provide it to you.
The Chairman: Where it did it come from?
Mr. Anderson: We have developed a number of principles over time and we are working on more.
The Chairman: I noticed that you mentioned them.
Mr. Anderson: I have been in my corporate job since last June and, among other things, one of my duties is to develop and coordinate that statement of principles over time. It is an evolving thing. It is done in collaboration with editors across the country. I hope it is a work that is never finished. I would be happy to show you the work in progress.
The Chairman: I would be more than interested in seeing that. In the same vein, have you thought about appointing public editors, who used to be ombudsmen until some women were hired to the positions.
Mr. Anderson: It is not on the current agenda, which is quite full right now looking at what we can do to make our journalism better. I would not rule out discussing that. My view is that if editors in newsrooms are doing their job well, the role of the public editor is not as necessary as one might assume. One thing editors need to do in newspapers is respond to readers directly. Sometimes a public editor can get in the way of that and start determining policy, journalistic standards and ethics, which are the role of the editor. I would not deem it necessary but I am open to having my mind changed. I do not know what anybody else thinks.
Mr. Camilleri: There are avenues for people who have issues, whether on the broadcast side in television or on the newspaper side, that they can pursue if they feel aggrieved by anything that we have done.
Mr. Wyatt: From the television perspective, in addition to our principles and guidelines, we have subscribed to codes of ethics that we helped to create.
The Chairman: Can we see your principles and guidelines?
Mr. Wyatt: Absolutely. The code of ethics was developed in conjunction with the Radio-Television News Directors Association and the Canadian Association of Broadcasters. There is a body called the Canadian Broadcast Standards Council. People who take issue with what we do can write their complaint and have it put before an adjudication panel. We are subject to their judgment.
The Chairman: We are pursuing this line of questioning with the witnesses because they have told us they are waiting to see what our report says before they move any further in this vein.
Cross-promotion has come up several times before this committee, not first and foremost from CanWest, although occasionally CanWest.
However, there has been a noticeable stream of concern, and indeed assertions, from some journalists that news judgments can become widely distorted by the corporate mandate to produce cross-promotion as notably a television company's entertainment offerings and the news coverage of the newspaper. Do you have any policies to avoid that? What we hear sometimes about CanWest is that CTV cannot get its shows covered to the same prominence as Global, but we have not heard anything like the degree of concern expressed about CanWest that we have about other situations. Nonetheless, one can understand the reason for concern when two different operations serve the same master. Do you have policies about cross-promotion, how far it can go, and what the limits ought to be?
Mr. Camilleri: We have no policy that prevents or precludes any of our media covering another company's media. For example, if you picked up Dose on Tuesday or Wednesday, you would have seen Dose did a great article on The Amazing Race.
The Chairman: I read Dose this afternoon in preparation for this meeting.
Mr. Camilleri: It pointed out that in households of two-plus, it surpassed Survivor in the ratings. Survivor is a Global show and The Amazing Race is a CTV show. There is a perfect example. We do not have a policy that precludes them from covering what they want to cover in our media. We encourage them, obviously, to cover our media. When they do cover our media, we do not tell them what to write. We have picked up our papers and seen them provide horrible reviews on the TV shows that we provide on Global. We have heard Global comment on the newspaper stories, but we do not have specific policies or edicts.
Mr. Anderson: The Ottawa Citizen has had a columnist write columns on Survivor and The Apprentice. We have also done Canadian Idol, which was a tremendously popular program on CTV. I think some of the people who may have come before this committee have forgotten that newspapers are still run by editors who have deep-set ethics and hard- and-fast rules about what is news and what is not. Even if the editors did not, their newsrooms would still remind them, because they are full of people with those ethics and those very well-defined journalistic standards. I bristle a little bit at the thought that somehow we would have to toady to the corporate master when it came to promoting entertainment.
The Chairman: We are really making you bristle a lot tonight, are we not?
Mr. Anderson: There is a taste test for these things.
Mr. Nott: When we see these announcements come across our desks, we question whether we would do this if it was sent to us by another network. We do not make it a story if it is a global announcement, by any means.
The Chairman: I have only two more questions, everybody will be undoubtedly glad to know. What is the appropriate level of profit for a city daily to earn, in your view, and are you there?
Mr. Camilleri: I would have to think about that. I do not have a number in my head. We look at it from a perspective that these entities, or whatever, in some cases are more than a hundred years old. The expectations from our investors who want return on their capital is that they will grow, that we have to deliver growth to our shareholders or else they will not invest. If they do not invest, we do not have the resources to do things, such as launch new publications, support the National Post or grow Global National. I do not fixate on a number other than to say we have to grow.
The Chairman: I did not ask, What is the appropriate level of profit for a national newspaper?
Mr. Camilleri: For a local newspaper or for any of our operations, I do not have a number in my head that says, if we get that number it is the right number. The expectations that are placed on us by our stakeholders, which include our shareholders. Without their capital and their investment, there is no ``us.'' They expect us to grow. I look at it from an incremental perspective that we have to grow every year.
The Chairman: Where would you be now: 15 per cent or 20 per cent return on revenue? I am asking this because people come before us and make statements, and I am trying to figure out where the truth lies.
Mr. Camilleri: From a margin perspective, the margins differ in every market. There is not a hard and fast margin rule that you can apply that would go across every market. Every market is unique. It has its own set of influencers, if you will, on its economic performance. I do not think government has any place regulating margin in our business. I have heard that asserted. We have to grow our revenue, we have to grow our profits, and we have to grow our margins. That is the expectation placed on us by our shareholders. There is not a hard-and-fast number that you can say, that is the number for this product.
The Chairman: Do not worry.
Mr. Camilleri: I am not being evasive; there just is not a number where you go. That is it.
The Chairman: The last question is a hypothetical question, but I would like an answer. Government policy everywhere in the world addresses the degree of concentration of ownership in many industries, including the media industry. In the media industry, in particular, in those countries it also addresses the degree of cross-ownership. That cross-ownership lies somewhere between a kaleidoscopic universe where nobody owns more than one media outlet, therefore, you have hundreds of owners, and the other extreme, where you would have one owner of everything in the country, old Soviet Union style, I guess, except I am hypothesizing one private-sector owner. Limits have to be set somewhere in there. In your view for Canada, where would the appropriate limits lie?
Mr. Camilleri: I would have to think about it. I am not being evasive. I do not have an answer off the cuff for somewhere between one owner and an infinite number of owners.
The Chairman: The question may sound naive, but clearly this is one of the questions that this committee has to consider. Clearly, the views of CanWest Global are important, because you are, to put it very mildly, a major player, a major influence, and a major element of the Canadian fabric. Could you think about what you would consider to be an appropriate regime and write us a letter? If you have not got an answer tonight, I am not going to ask you to make one up in 30 seconds, because it is an important question.
Senator Munson: How far do you want to expand?
The Chairman: Your brief does talk about bulking up the company. One wonders what seems appropriate, from the company's point of view.
Mr. Camilleri: We definitely will get back to you on that. If I was to give an off-the-cuff answer, I do not think we would want to accept any threshold. The market realities are such today that the balance of power has shifted to the consumer. The consumer is king. There are literally an infinite number of media choices at the consumer's finger tips driven largely by technological innovation. The asserted dominance that our critics say we have, as we have tried to point out in our briefs, we simply believe is a myth.
The Chairman: I think you can answer this with a yes or a no. To get full access to one of your papers on the Internet, I have to pay something approximating the subscription price that I would pay to get the paper delivered to my home. Is that true?
Mr. Camilleri: Yes, if you only want to get the electronic version. If you are already a subscriber to the hard copy, you have access.
The Chairman: You can then have access. Okay. Thank you.
Senator Munson: Just a very short question: Because of the free metropolitan dailies, are you interested in getting into that kind of business? If you carry the examples of others in terms of cross-promotion, such as the Star and others, because people who are picking these things up on subways are reading them even though there may not be much news there. There is a bit and the educational process begins by having somebody read a paper on a bus. Whether it is free and not full of a lot of information, they may say, ``When I get off the bus I think I will go in and pick up the National Post or the Star.''
Mr. Camilleri: Dose is a free daily that we just started, and we are a one-third partner with Metro and Torstar and the launch of the Metro product in markets other than Toronto and Montreal where they already exist.
Senator Munson: I just needed that clear.
The Chairman: Obviously, we could go on asking you questions for at least another eight hours. We are not going to do that. We thank you very much indeed for having you with us. It is been a most interesting evening. You will write us about appropriate limits, standards, codes of ethics, guidelines, and that whole bundle of stuff?
Could you also provide some written information about your programs for training of journalists — existing journalists now employed? You have given us a lovely document about how you feed into journalism schools and whatnot, but what Senator Chaput was talking about would be very helpful. Have I forgotten anything? Also can you provide us with the numbers of journalists now and five years ago? Thank you all very much. It has been very interesting. Senators, this meeting stands adjourned. Our next meeting will be on Monday in St. John's Newfoundland at 9:00 o'clock in the morning.
The committee adjourned.