Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 12 - Evidence - June 17, 2003

OTTAWA, Tuesday, June 17, 2003

The Standing Senate Committee on Transport and Communications met this day at 9:32 a.m. to examine the current state of Canadian media industries; emerging trends and developments in these industries; the media's role, rights and responsibilities in Canadian society; and current and appropriate future policies relating thereto.

Senator Joan Fraser (Chairman) in the chair.


The Chairman: I would like to welcome the honourable senators, members of the public, our witness and our viewers.


This is a meeting of the Standing Senate Committee on Transport and Communications that is examining the state of the Canadian news media. We are examining the appropriate role of public policy in helping to ensure that the Canadian news media remain healthy, independent and diverse, particularly in light of the tremendous changes that have occurred in recent years such as globalization, technological change, convergence and increased concentration of ownership.

Today, we welcome Ms. Anne Kothawala who has been serving as president and chief executive officer of the Canadian Newspaper Association since 1999. The CNA represents English- and French-language daily newspapers with circulations ranging from 3,500 to more than 500,000 copies per day.

Welcome to the committee, Ms. Kothawala. I believe you understand our drill. Normally, we ask for an opening statement of 10 to 15 minutes. Then we go to questions and comments.

Please proceed.

Ms. Anne Kothawala, President and Chief Executive Officer, Canadian Newspaper Association: Thank you for the opportunity to appear before you to talk about some of these important issues. You will note that I am not joined by any of my members today. We thought it was appropriate that members may choose to appear before you as individual companies. I understand that you may well be inviting them to appear before you as the process moves forward.

As the chairman mentioned, CNA is a not-for-profit association. We represent 82 English and French newspapers, both large and small, across this country. Our objective is to combine the experience, expertise and dedication of our members to ensure the continuance of a free press able to serve its readers effectively.

The mandate of this committee is to identify public policies that will help to ensure that Canadian news media remain healthy, independent and diverse.

The CNA supports this objective. The CNA also agrees that the objective should be to ensure that it remains that way. The Canadian newspaper industry is generally healthy, independent and diverse as it is.

We have included some charts for your review, which I believe have been distributed. They clearly demonstrate that the newspaper industry in Canada is more diverse and less concentrated than it was 10 years ago. In 1994, there were 10 major owners. In 2003, there are 15 major owners. In any event, concentration of ownership issues with respect to the written press do not represent a true concern in a market where consumers now have access to multiple and varied sources of information.

One part of your committee's mandate is to examine the media's responsibilities in Canadian society. Newspapers take their duty in keeping Canadians informed and connected very seriously and with the utmost responsibility and care. Canada's newspapers do not need to have the federal cultural objectives posted on their bulletin boards to be guided on delivering content that is both richly Canadian in general and community-oriented in particular.

Canada's publishers, editors and journalists take great care in ensuring that rigour, factual exactness, avoidance of conflicts of interest, independence of journalist and the public's right to information remain priorities. This country's 102 dailies provide richly Canadian content as a matter of course in large and small communities from coast to coast — from Whitehorse in the Yukon, to St. John's in Newfoundland — in English and in French and to more than 5 million readers every day.

Canada's publishers, editors and journalists, as well as the advertising, marketing and circulation editors and anyone else who works for a daily newspaper, have a duty to understand their community's heritage and unique needs. Otherwise, they cease to be relevant to their readers and their advertisers.

Thousands of readers every day engage their newspapers and their fellow readers in vigorous, interactive debate through letters to the editors, feedback on their Web sites and through community forums and simple conversation.

Daily newspapers are this country's primary and credible sounding board and collective memory more than any other medium in the past, present and the foreseeable future. Indeed, it can be argued that daily newspapers set the agenda for daily public discourse and can be effective instruments of social change.

If there is a concern for our industry, it is that circulation and readership are declining, particularly as a proportion of the population. The audience is also fragmenting, just as it is for television. A significant portion of newspaper readers today are occasional readers who may not have read the paper yesterday and will not read it tomorrow. Newspaper readers are also well aware of the alternatives available to them, including television and the Internet.

Younger readers, in particular, are in short supply. The first task of any newspaper is to survive and to survive, it must adapt.

Over the past 30 years, the playing field has changed dramatically. Changes in technology, coupled with the explosion of information sources, are phenomena that place the debate in a whole new light. If newspapers are to maintain long-term viability, public policy must allow newspapers room to adapt their business models to changing circumstances, including in potentially dramatic ways. Public policy must not lock them into any one business model from a romanticized past.

No one knows what model will work best for newspapers 10 years from now, let alone 20 years from now. Some owners are effectively placing large bets that the future for successful newspapers will necessarily involve a significant degree of integration and convergence with other media. Other owners have a different view. It is essential that different business models be allowed to emerge, grow, and flourish or fade away, as they will.

Newspapers are businesses. Most of our members are owned by public corporations with significant obligations to shareholders and investors to operate on a sound commercial basis.

The Senate should be cautious not to be perceived as requiring newspapers to organize themselves on the basis of any particular structure that they, and some media critics and observers, might prefer. The ability of a newspaper to survive and provide quality editorial content is based on advertising revenues. This is a business reality. However, in times of war, as we have just witnessed, newspapers invest extra resources by putting journalists on the ground to provide Canadians with news from the frontlines.

Newspapers take their mission to keep Canadians informed very seriously. This commitment did not waver, even in the face of declining advertising revenues.

Public policy, as expressed through the Charter of Rights and Freedoms, protects the right of the owner or publisher of any newspaper, large or small, to be the ultimate arbiter of the content of the newspaper. This is as it should be.

Various Canadian newspapers were founded to project a specific point of view or adhere to a set of principles. Le Devoir was created to protect the interests of a strong Quebec society. The Toronto Star continues to be guided by the social values laid down by Joseph Atkinson. The right of any owner or publisher to influence content should be celebrated as a strength of Canadian law and policy, not a weakness. Any attempt to deny that right to an owner or publisher would be resisted firmly and, in our view, rightly under the Charter of Rights.

The director of investigation and research under the Competition Act takes the position that having newspapers in different communities across Canada under common ownership does not, by itself, raise concerns under the Competition Act. We believe the director is right in this. In any event, I note that the current trend in Canada is towards less concentration of ownership in the newspaper industry, and not more.

By way of example, in the province of Quebec, there are 7 conventional TV channels, 21 specialty channels, 177 radio stations, 13 daily newspapers, 274 weeklies, 121 student newspapers and 530 periodicals and other publications. There are also many other sources available through the Internet. That represents a significant amount of choice.

Current levels of concentration of ownership simply do not represent a problem for public policy. The previous findings of the Senate in this regard, dating back to 1971, said that there is no correlation between chain ownership and editorial performance. This remains valid today.

There is no correlation between ownership structure and editorial quality. For example, the most recent national newspaper awards saw winners from converged and non-converged newspapers, from large and small English and French, from Vancouver to St. John's. Eleven out of the 20 awards went to newspapers that are part of multimedia companies. Award-winning, high-calibre journalism is happening throughout this country.

It is really all about common sense rather than ownership structure. Choice enables the reader to turn their back on a media organization that fails to respect their needs.

As to cross-ownership of broadcasters and newspaper publishers, on June 2, the FCC implemented a rule change that significantly weakens cross-ownership restrictions in the United States. A large part of the rationale for this change in public policy is based on solid research that demonstrates that cross-owned properties better serve the public interest.

As there are about 40 markets in the U.S. that are grandfathered, research by the Project for Excellence in Journalism, affiliated with the Columbia University Graduate School of Journalism, demonstrated that newspaper- owned television stations had better public affairs and local news coverage.

The U.S. is not alone in lifting restrictions on cross-ownership. Both the U.K. and Australia are moving in similar directions.

There are many examples of non-converged television stations dropping local news coverage as a cost-cutting measure. The economies of scale that are achieved with the newspaper's expertise in covering local news, benefits the public interest. One of our members has 10 new hours of public affairs programming using the talent of the journalists on the print side.

In Canada, the CRTC has the ability to respond to situations of cross-ownership through the licence-renewal process and by other means. The CRTC has, in certain instances, imposed requirements, ensuring that television newsrooms and print news rooms under common ownership be separately managed.

We make reference to this not to support or oppose the commission's decision in this area, but simply to note that there is an effective public-policy instrument already in place, which can be, and has been, invoked when broadcast and print publications come under common ownership.

For the Canadian government to now reconsider allowing cross-ownership would be to go in the opposite direction of most countries in the industrialized world. That is not to say that all free and democratic societies allow for cross- ownership, but if they do not, they usually permit foreign ownership.

CNA will not argue that one is better than the other, but it is true that a complete ban on cross- or foreign ownership will necessarily lead to an increased degree of newspaper concentration.

The economic barriers to entry are already great enough without adding government-imposed ones. The reality is that questions of fairness and diversity have more to do with the corporate culture of the ownership than with the corporate structure of the ownership. The debate around the newspaper publishing sector in Canada has always been couched as a structural one, but the real issue was the personalities of the owners. In the mid-1990s, the issue was about the concentration of Lord Black's properties. There was a great deal of angst, but at the end of the day, I believe even the critics would agree that Canadians do have better newspapers such as the Ottawa Citizen.

The newspaper industry is often thought of as an unregulated industry, but this is more of a philosophical notion as opposed to the regulatory environment in which we operate. There is a broad range of public policy instruments already in place at the federal and provincial level that affects the business of publishing newspapers. Our members are fully responsible for everything they publish under libel and contempt laws. There are labour laws, there are recycling laws — a multitude of other laws restrict what can be published and restrain the news gathering process, including access to the courts, privacy and identification of accused in criminal actions.

The content of advertisements is controlled; even the placement of vending boxes is controlled. We see no need to add to the existing range of restraints and controls over the business of newspaper publishing.

One constructive step that public policy could take would be to eliminate the GST on reading materials. We believe that news media such as newspapers play a vital public role in the dissemination of information within our communities.

The introduction of the GST on newspapers in Canada had a dramatic effect on national circulation. Between 1991 and 1993, circulation in Canada dropped over 5 per cent. Although there was an economic downturn in the early 1990s, the decline in circulation was attributed primarily to the introduction of the GST since earlier recessions had little impact on circulation.

It is also time for government to move quickly and reform outdated legislation that prevents direct-to-consumer advertising of prescription medicines to Canadians by Canadians. U.S.-style advertising that spills over every day is misleading. That is why we are calling for a made-in-Canada solution that would allow for better access to accurate, reliable medical information.

Canadians want and deserve balanced, regulated, clear information on prescription medicines so they can participate in decisions that affect their health. Legislation drafted half a century ago has lost all relevance in the modern information age, and the time for change is now.

Another constructive step would be to strengthen Canada's freedom of information, FOI, laws, and to insist on a culture of compliance by government departments rather than avoidance of FOI responsibilities. The federal government should set the standard in this regard and encourage the provincial governments to follow suit.

In his testimony before you, Patrick Watson suggested the need for a public newspaper. One of his reasons was that he found the level of investigative journalism in this country to be poor. Not only is his assessment wrong, the solution is wrong-headed as well.

Daily newspapers compete against the CBC every year for the prestigious Michener Awards, and have won more times than the CBC. It is the newspaper industry that gets these otherwise secret stories out to Canadians and newspapers that continue to push for modernization of FOI laws, which is the real solution to better investigative journalism in this country. Without them, newspapers can only tell Canadians the stories that governments want them to hear.

CNA studies of the effectiveness of FOI laws in this country have revealed major problems and concerns about how governments routinely try to stonewall and circumvent a law that was designed to give information to the public and, of course, to the media. Look at what some newspapers have unveiled when FOI has truly meant freedom of information. The Toronto Star this year won the three most significant national journalism awards for its series on race and crime. This is a series that would not have happened without a patient and long wait to use FOI to pry out the data The Star needed to do its analysis and investigation. The Globe and Mail was nominated twice for a national newspaper award in two different categories for coverage of the federal government's advertising contract scandal. These are just two of the stories that needed to be told, and which have done a great service to guard against government misuse and abuse in our democracy.

There is a strong history and tradition in this country of newspapers moving the needle on public policy, whether it be the environment, taxation or health care. This fundamental role in a free and democratic society has not, and should not, change because of structures in ownership.

The Chairman: I should like to clarify something about your slides. You give, over time, two sets of data. The first is newspaper ownership by circulation size. Is that total daily circulation or circulation among your members?

Ms. Kothawala: Total circulation.

The Chairman: Regarding the second — newspaper ownership, 2003 — is that ownership by number of titles?

Ms. Kothawala: That is right.

Senator Carney: On your page 5, you mention that there was a correlation between the decline in circulation of newspapers and the imposition of the GST. Are you suggesting that there was no decline in circulation of newspapers before the GST was proposed? I sat on a newspaper board of directors and there definitely was a decline in newspapers before the GST. Could you clarify that?

Ms. Kothawala: We are not arguing that there was no decline in circulation. We are arguing that there was quite a substantial decline of over 5 per cent between 1991 and 1993. If you look back in time over previous recessions or economically difficult times, the drop in circulation was much smaller than that.

Senator Carney: Also, could you provide the committee with a list of your membership? You have said you represent newspapers, but I do not believe we have an actual list of the membership.

The Chairman: I was struck when you said you had 82 members but there are 102 dailies.

Ms. Kothawala: Basically, all the major daily newspaper companies are part of CNA, with the exception of Quebecor, which recently left due to financial constraints.

Senator Carney: There are many interesting aspects of your presentation, but I wish to concentrate on the issue of diversity of news. Paddy Sherman of Southam News pointed out something that I thought the committee would be interested in: The diversity of views of many newspapers in Canada led to many of our national programs. The fact that we have a national pension program in place is because Quebec wanted it. There was a great deal of discussion in the media on pensions and it became a national program. It was similar in the case of Medicare, which was an issue in Saskatchewan where it was pursued, discussed and debated and became a national program. I would add to that list, Aboriginal rights, which because of Nisga'a and B.C. Aboriginal issues, has become a national issue to the point that the territory in which we sit, you may be surprised to know, is under a land claim of status by the Algonquin. Parliament Hill is the subject of a land claim.

That relates to the diversity of voices and views of columnists and editorialists in the many regions of Canada. How can we maintain that diversity when increasingly we have a newspaper system that holds a concentration of views such that moves are made to concentrate editorials and limit the number of voices by having one person or one group of newspaper reporters present those views on television under a centralization of news bureaus. In British Columbia, CanWest Global Communications Corporation owns both newspapers and radio stations. A Victoria bureau was cut so there are only two voices re-circulating the same information such that the ruling criterion of information production is this concept of repurposing. I used to call it rewrite when I was a journalist — you got the story and you wrote it for the newspapers. Now, under this concentration, the story is repurposed for television or it is rewritten or repurposed for radio. Basically, one voice, or a limited number of voices, is disseminating the information.

If you are to have a centralized system of information production and dissemination, how do you maintain that national fabric of diversity? It goes directly to your statement on page 5 that the reality is such that the questions of fairness and diversity have more to do with the corporate culture of the ownership than with the corporate structure. I would agree. Under the Southam newspaper chain, the criterion was local management, with publishers of editorial content and local priorities ruling the editorial content. Under CanWest, there is a centralized head office with general managers but there are no local publishers. I am interested in that statement and it goes to the central issue of diversity. If you have concentration, the elimination of local voices and the elimination of a diversity of voices, how do you achieve the information tapestry that Canadians need for a national agenda?

Ms. Kothawala: First, the most important thing to recognize is that newspapers remain, and will always have to be, fundamentally local. We have done much research into what Canadians are looking for in their daily newspapers and local content is always at the top of the list. There are still, irrespective of whether a chain of newspapers across the country has one owner, strong local brands. The moment that they cease to be local, they will lose their readers because their readers are looking for that. I would submit that the diversity of voices is still alive and well because that is what newspapers are all about. If they want to remain relevant and if they want to continue to attract readers and advertisers, they have to ensure that that local news is reaching their readers.

Senator Carney: I would submit, and time will tell, that the concentration and elimination of voices is one of the reasons for the decline in circulation but we will have to wait and see.

I am struck by the fact that you are quite satisfied with the status quo, except for a couple of areas such as the push for direct-to-consumer advertising of prescription medicines. Of course, that has constraints because if advertisers have the right to pitch directly to consumers, then there will be great pressure on our drug services. Sales of prescription medications will be dictated by advertisers pushing brands rather than by doctors and pharmacists dealing with people's needs. Some of your issues are directly self-serving and not necessarily in the public interest.

Why are you so happy with the status quo? Why do you think it is fine for localization and centralization? Also, in that context, the big chains are not producing local news. Rather, community newspapers are producing local news. You have only to read them to know that.

Ms. Kothawala: Again, I would disagree with that assessment. There are numerous questions as part of that. First, let us deal with the advertising of prescription medicines. As I said in my presentation, the reality is that Canadians are receiving this information today from American networks. They get it every day, often for drugs that have not been approved in Canada and frequently under a different name. There is mass confusion and, at the end of the day, the doctor will have the final say. It is not as though Canadians will suddenly rush out to their pharmacies to fill many different prescriptions. The doctor will have the final say.

Senator Carney: I will leave that point to someone else to debate. It is an example of the fact that you are quite happy with the status quo and yet many Canadians are not happy about with it. Why do you support the centralization of newsgathering, news dissemination and news production as part of a corporate culture?

Ms. Kothawala: I am simply supporting the continued role of newspapers to keep Canadians informed. You spoke a little about how, with television news and newspapers under common ownership, you are simply repurposing content. Again, experience has shown differently. Cross-ownership has allowed improved television programming in terms of news and public affairs. It has allowed newspapers to develop stronger brands, to cross-promote and to tell Canadians about what content they will cover. Those are quality stories. If you look at the history of this, many television watchers are not newspaper readers and vice versa. To the degree that you can attract some new readers because they developed an interest in your newspaper by seeing something on a television station that is owned by the same company, there is, in fact, an increase of choice.

Senator Spivak: On the issue of advertising drugs, there seems to be a fundamental contradiction in what you are saying. You are saying that Canadians are receiving American advertisements that are misleading and that if we could have direct-to-consumers in Canada, it would be better. However, these advertisers are multinational corporations and if the experience in the United States is such that advertising is misleading and you only have to look at the numbers of Canadians taking drugs, why should we assume that direct-to-consumer advertising in Canada would then not be misleading?

There is always a tension between the public interest and corporate interest. We are here to protect the public interest. You seem to be expressing the corporate interest. Could you comment on that?

Ms. Kothawala: First, on direct-to-consumer advertising, DTCA, I quite clearly say in my presentation that is why we are pushing for a made-in-Canada solution. We do not think the American-style advertising is appropriate, so we are suggesting, and have been working with government, a system that is regulated and balanced that makes sure that it clearly states who the product is for and not for. It has third party support.

If it were for diabetes medication, the Canadian Diabetes Association's Web site would be there so people could see what the alternative treatments might be. The ad would always advise to see your doctor.

We are proposing something that is regulated, balanced and provides Canadians with accurate information about their health.

Senator Spivak: This has nothing to do with the tremendous amount of money that drug companies have to spend on advertising to promote their product?

Ms. Kothawala: No, this has everything to do with the fact that Canadian newspapers and Canadian broadcasters compete against American broadcasters. We want to ensure that, to the extent that those messages are getting out to Canadians, it is the right information. We also want to ensure that there is a benefit.

There is no question that there will be additional advertising dollars. We do not think that we need to apologize for that.

Senator Graham: Welcome witness. I will pursue the same subject for a moment. I am intrigued by what you are saying about pharmaceutical prescription medicine advertising. You talk about getting better access and more reliable information to the public. How would you do that in terms of newspapers?

I will add a supplementary to that. What responsibility does the media have in educating people, especially young people, not just bringing the news or giving an opinion?

There is a two-part question here. First, a further supplementary to the question Senator Carney raised and one to the supplementary question of Senator Spivak with respect to how would you approach better education with respect to pharmaceuticals in your newspapers?

Ms. Kothawala: That is an important question. Again, many studies have been conducted to look at why Canadians are reading newspapers. What type of content are they seeking? Canadians are really looking to their newspapers for more information on health including information on new prescription drugs and new developments in types of surgery.

Those are very important issues. Canadians are looking to their newspapers. You will see that a number of newspapers have established health and well-being sections to respond to that need of Canadians. Newspapers recognize that Canadians are looking for more content in terms of prescription drugs and health issues generally.

We think that advertising will add to that to the extent that there will be more information out there because we are not suggesting an advertising system that is not regulated and that is not balanced. Consumers will have both the editorial coverage in terms of issues that are important to their health, but also be able to see what new drugs are available on the market.

It is not the role of an editorial story to talk about side effects and who might use a drug. That is much netter communicated through an advertisement.

Senator Graham: What about the responsibility of educating the public and not just uncovering sensational stories, giving opinions or taking a side of an issue. What responsibility do newspapers have in educating our young people?

Ms. Kothawala: They have a big responsibility in educating our young people. Many newspapers are active in Newspaper in Education programs, or NIE. They work closely with the schools to ensure that there are high rates of literacy among the school children. They try to inculcate that newspaper-reading habit at a young age. We all know that this is something our industry is dealing with, as many industries are.

There are many sources through the Internet and other ways by which young people can get their information. We would like to ensure that they are reading newspapers. We think it is an important thing that they need to be doing.

A number of newspapers are also looking at how to attract readers. It is a big issue that is under a great deal of discussion. The Toronto Star for example, has created "Brand New Planet," which is a new section that is dedicated to the tweens to inculcate the habit of reading newspapers at a young age.

Senator Graham: There was a financial analyst who gave us a report that for the last four generations each generation reads fewer newspapers than the one before. Would you comment on that?

Ms. Kothawala: As I said, we are seeing declines in readership. This is not unique to Canada. Countries around the world are dealing with this issue.

Again, I think it has much to do with the explosion of information sources. There are a number of mechanisms by which Canadians can keep themselves informed and some of them are not choosing to read the daily newspaper as part of that.

We all know that people are time pressed. If you want to give a daily newspaper the time that we feel it deserves, you are looking at a good chunk of time. Many people do not have that time. That is something that again newspapers are balancing.

There has been much growth in terms of newspaper Web sites because they are trying to catch people at different parts of their day. Some people look at the newspaper Web sites while at the office. They are trying to extend that brand to make sure that people still view the daily newspaper as relevant in their everyday lives.

Senator Graham: When you say that you have 5 million readers in total everyday, be they daily newspapers or weekly newspapers, how do you measure that? How are you assured that this is an accurate measure? Is it the number of papers that are printed? Is it the number of papers that are sold? Give us how you reach that calculation?

Ms. Kothawala: CNA has a research arm referred to as NAD Bank — the Newspaper Audience Data Bank. They are out in the field twice a year with readership surveys to determine who is reading newspapers. They do breakdowns in terms of read yesterday versus read last week, because one of the trends we are finding is that while the read- yesterday number is declining, the read-in-the-last-week is not declining. Canadians are still reading newspapers. They are just not reading them as often as they did.

Senator Graham: When you formed the new Canadian Newspaper Association in 1996, was there any change in membership? Did everyone who was a member before of the Canadian Daily Newspaper Association and the Newspaper Marketing Bureau, all sign on? Did you lose someone or get additional members?

Ms. Kothawala: We actually got an additional member who is no longer a member, and that is Quebecor. At the time in 1996, all newspapers in this country came together under a common umbrella to work on public policy issues as well as marketing issues. We merged those functions into one umbrella organization.

Senator Gustafson: I want to thank you for appearing.

I come from a rural area. I am becoming chronic in the problems that exist, but they are very serious. I will use an example.

For 14 years, while I was in the House of Commons, we had Question Period meetings whether in opposition or in government. Generally, the questions in the House of Commons arise from a headline in the papers.

I say all this to show the responsibility that the newspapers have. You made the statement that government directs the newspaper industry.

It is the other way around. The newspapers set the tone for what happens in government. There is no question. Where is the vacuum? The vacuum is in rural Canada.

I want to use an example, which was in your presentation as well. I guess that is fair ball because a big population of the country lives in major centres. It is hard to move out of Toronto or Montreal or even Ottawa with the media and really affect what happens in the country.

I will use the mad cow example and how the media has covered it. They have done very well on the scare part of it. They have really covered the importance of the scare and what could happen, but they have done very little on the hurt. I have not seen much example of even the larger papers going out and interviewing a farmer or someone who is really hurting or maybe losing his farm over these problems.

That happens in many areas in agriculture. Canada is in big trouble in agriculture. The question is whether a lot of agriculture will recover from this.

As an example, yesterday, the packing plants, some are going ahead. If you have deep pockets, as a packing plant, you can buy up these cattle for half price now, freeze them and down the road in 10 months probably make big returns. It seems the media does not get to these kinds of hurts. The local paper does not really impact government. It is the big central papers that impact government.

I would like to hear your response in regard to that and I wish I knew the answer. It is a serious problem we are facing in rural Canada.

Ms. Kothawala: I think you are quite right. Newspapers have to continue to ensure that they offer balanced and quality coverage to their readers. They have to ensure that they are covering the issues that matter to Canadians, that are important issues, and that they provide context.

I was out of the country last week, so I cannot speak directly to how the fallout from the whole mad cow situation has been dealt with. However, I think on balance, newspapers tinker with the quality and the news that they bring to Canadians at their peril. A lost reader is hard to win back, so they have to continue to be relevant and Canadian readers will vote with their eyeballs and pocketbooks. If they feel a particular newspaper is not serving them well, then maybe they read the community newspaper, look at a local television station, or get their news through the Internet. They will find the source that meets their needs. Thankfully, in a democracy, we can have divergence of opinions and we have the opportunity to agree or disagree with a particular point of view.


Senator Corbin: I greatly appreciated your presentation. I hear you are perfectly bilingual.

Ms. Kothawala: Not perfectly, but I will try.

Senator Corbin: In any case, to make everyone's life easier, I will address my question to you in English. Who are the members of the board of governors or the association's board of directors?

Ms. Kothawala: We have representatives from each company. We want to make sure that every region is represented. Therefore, we have members from each company and every province.


Senator Corbin: That is what I want to hear. You are talking about companies. Therefore, this is an association of, basically, owners, not editors?

Ms. Kothawala: That is correct. We represent newspaper publishers. However, having said that, we work very closely with the Canadian Association of Newspaper Editors. The CNA provided the ability for CANE to be formed. Basically, the main mission of the Canadian Association of Newspaper Editors is to provide professional development and training to mid-career journalists across this country.

We have just completed a fairly successful seminar, with close to 100 people, in Lethbridge. There is one scheduled for Hamilton later this month, and we will be going to Halifax in November.

That training is important and we consider it part of our mandate to ensure that publishers are maintaining that commitment to quality by ensuring that their journalists and editors are getting that ongoing training that they need.

Senator Corbin: Before leaving that particular line, who would be directing the seminars? Are they basically intra- journalistic persons? Would they be academics, or a mix, or what?

Ms. Kothawala: It is a blend. For example, someone like Don Gibb, who is a writing coach who has been around for a number of years — I am sure Senator Fraser is familiar with his work — would be potentially one of the people who would provide a seminar. Often we have one on the legal side, so that journalists are well aware of changes in regulation, whether it is Young Offenders Act or access to the courts. We sometimes have legal seminars with media lawyers who can ensure that journalists and editors are well aware of the legislative changes in that regard.

Senator Corbin: With tongue in check, have you ever had one on the Senate?

Ms. Kothawala: We have not.

Senator Corbin: Coming back to the ownership representation on your board, or at the director's level of the association, would CanWest have one representative or more than one?

Ms. Kothawala: They have three representatives on our board.

Senator Corbin: How is that decided?

Ms. Kothawala: It is based on national circulation.

Senator Corbin: Strictly?

Ms. Kothawala: It is based on the amount of circulation, so it is sort of representation by population, and then, within that, we try to ensure that we have a good balance in terms of the geography of the country.

Senator Corbin: Would that particular group have the most representatives?

Ms. Kothawala: Yes, by one. They have one more than the next group, which is Torstar.

Senator Corbin: So an organization like New Brunswick news, I think, the Irving conglomerate in New Brunswick, they would only have one?

Ms. Kothawala: They have one.

Senator Corbin: Even though they control a number of media, both dailies and weeklies and other stuff?

Ms. Kothawala: We deal only with dailies, so we are just looking at the circulation of daily newspapers in this country.

Senator Corbin: I understand. They have quite an impact in terms of — what is the total number of the directors?

Ms. Kothawala: It is 16.

Senator Corbin: CanWest has three, Torstar has two. That is five already. And who is next on the line?

Ms. Kothawala: Gesca, which is Power Corporation in Montreal.

Senator Corbin: That is La Presse?

Ms. Kothawala: Yes and their properties, La Soleil, La Tribune and a couple of other newspapers. We have The Globe and Mail. In fact our chairman, Phillip Crawley, is the publisher of The Globe and Mail. We have representation from Osprey as well as with Michael Sifton, our treasurer, and Fred Laflamme, publisher of the Kingston Whig Standard.

We have just changed our by-laws because we recently lost Quebecor. They used to have three members on our board. Currently, we have changed our bylaws to allow for a minimum of 12 to a maximum of 16. We are hoping that Quebecor in some form or another, or those Sun newspapers will eventually come back into the fold of the association. We do not want to have to change our bylaws again to allow for representation on the board. It is a flexible number to ensure that all of our members are represented on the board.

Senator Corbin: Do you have such a thing as a mission statement?

Ms. Kothawala: We do.

Senator Corbin: Is that available publicly?

Ms. Kothawala: It is. I have a couple of documents that I will happily table with the clerk. I wanted to see if other issues came up in our discussion, and if there were any other stats and figures that the senators required, I could provide those. I also brought along a booklet, which is our profile, that gives a good summary of the newspaper industry in Canada, which I thought might be of value.

We do have a statement of principles that was drafted in 1996 when the association was formed. These are important principles by which our members guide their activities and talk about accuracy, fairness and community responsibility. I will also leave a copy of that document.

The Chairman: I have a long list of data that I was wondering if you could provide. First of all, how far back do NAD Bank numbers go?

Ms. Kothawala: That is a good question. I would say probably the early 1980s.

The Chairman: Could you provide that to the committee?

Ms. Kothawala: Readership numbers?

The Chairman: Full NAD Bank stuff for the past five years, and then perhaps preceding every five years back to how far it goes.

Ms. Kothawala: In five-year chunks?

The Chairman: In five-year chunks up until five years ago and after that, yearly. This will be a voluminous box, I expect, but it will be very useful for us.

Ms. Kothawala: That is not a problem.

The Chairman: Could you talk a little about where circulation and readership stand now? You talked about the shift from regular to occasional readers, for example. On average, what proportion of newspaper readership now is occasional?

Ms. Kothawala: What we are seeing — the latest NAD Bank figures for 2002 — are 54 per cent of Canadians read a newspaper yesterday, whereas 81 per cent of Canadians read a newspaper in the last week.

Again, as I noted, our bigger problem is with the fact that Canadians are not reading newspapers as often as they once did. Many newspapers have undertaken many surveys to try and find out what the issue is. I know some honourable senators have their own opinions as to what those issues might be. Time and again, we are finding out from readers that the real issue for them is lack of time.

The Chairman: It has been lack of time since I was a pup. There was never time, but still when I was a pup, more people were reading newspapers than they are now. One wonders if there is not something more profound long-haul at work here.

What about readership as distinct from circulation? Also, upon which of those two does a newspaper's financial health depend?

Ms. Kothawala: I think readership is probably the more important currency, because it gives you a better sense of who's reading your newspaper — not only how many people, but more importantly, who is reading your newspaper. From the perspective of the advertiser, that is very important. Generally, the profile of a newspaper reader is someone who is fairly well educated and higher income. These are people that advertisers are interested in getting their message out to. That has become really the main currency by which to base your readership. Like magazines — in offices, for example — you have the one copy of the newspaper that is circulated and shared amongst many staff. Again, circulation does not necessarily get at that pass-along readership.

The Chairman: Will you be able to give us data for both?

Ms. Kothawala: For both, absolutely.

The Chairman: Terrific.

Senator Graham: I have a supplementary on the financial aspect.

The Chairman: Could I just run down my list? Do you have any data on the number of journalists employed by your members?

Ms. Kothawala: I could certainly get that. That is not something that we collect as a matter of course, but it would be a matter of phoning my individual members.

The Chairman: That would be really helpful, so would any indication of trends over time — let us say over the past 10 or even 15 years, if that were available. That would be extremely helpful.

I know that some of your members will say that some of these numbers are misleading because job definitions change. Nonetheless, any information that we can get of this nature will be helpful to us. I would ask you to do your best effort at finding what you can. It may take a little while, but we will probably not be sitting through the summer. When we come back in September, you will have the data for us — right?

Ms. Kothawala: Absolutely.

The Chairman: What is the CNA's budget?

Ms. Kothawala: Our budget is $1.6 million.

The Chairman: How much did you lose when Quebecor left? How much did Quebecor save by leaving?

Ms. Kothawala: We lost $400,000, which is why it is $1.6 million. It used to be $2 million.

The Chairman: Of the $1.6 million, formerly $2 million, how much is devoted to journalistic matters — notably the training, but any other journalistic matters that you do? What do you do, in general, as far as journalism is concerned, as distinct from advertising and readership and so on?

Ms. Kothawala: We administer, as you are aware, the National Newspaper Awards. We also are the body that administers any of the programs that are offered through the Canadian Association of Newspaper Editors, CANE. We provide a number of editorial tips, best practices. We move that information around the country. That is something that our members really find value in, particularly some of the smaller members who are able to see what some of the larger members who have more resources available to them have been able to do and what has worked and what has not. We also do seminars and training. I would say maybe 25 per cent of our budget would be devoted to those issues.

The Chairman: Also, when you are sending your large box of material to the committee, would you include samples of the tips, the best practices, communications and the list of the seminars that you have conducted recently, and that you plan to conduct?

This is my last question. You referred to the American research on cross-ownership, and its apparent impact or otherwise on news coverage. However, the American markets are not, in many ways, the same as the Canadian markets. What Canadian research is there on this subject?

Ms. Kothawala: It is still so new that there has not really been any Canadian research that I am aware of. It is interesting because I mentioned that I was out of the country last week. This was the first conference that I attended of the World Association of Newspapers, which brings together over 120 countries from around the world, talking about important issues that newspapers are dealing with. Not surprisingly, one of the big themes was cross-ownership and convergence, and a number of countries are moving in that direction. One of the other documents that I will table — there was a presentation from a woman who is a senior vice-president with the Gannett Company. She provided a table that looks at the cultural and business differences of newspapers versus television. She divides it into marketplace differences, the decision-making process, how they analyze performance, the measurements of success and determining what is news. There is a stark contrast between the ways in which newspapers and television operate. Trying to merge these two obviously has its challenges. Canadian companies are working through those issues, as are companies around the world.

To answer your question, I do not have specific research in Canada. I have anecdotal information in terms of talking about the growth of public affairs programming and strengthened local news. Certainly, a number of our members have done their own proprietary research but whether they are willing to share that, I do not know. Obviously, they must be out in the marketplace constantly to determine whether their product offering is meeting the needs of consumers. Are more people reading their newspaper product? Are more people watching their television news or public affairs programming? I can see whether some of that information is available to be shared.

The Chairman: I think I saw you holding that table from the vice-president of Gannett. Could you provide us with a copy of that?

Ms. Kothawala: Certainly, and that truly underscores the point.

Senator Graham: Could you tell us why Quebecor left? Could you give the committee any information with respect to the profitability of newspapers?

Ms. Kothawala: Certainly. First, in terms of Quebecor, the Canadian Newspaper Association is not unique. Quebecor has left a number of associations of which they were members. They have said that it had nothing to do with their representation from, or their happiness with, CNA. They were simply looking at cutting any costs they could and so we became a casualty, unfortunately.

Senator Graham: Could you provide the committee with any information in respect of the profitability of newspapers?

Ms. Kothawala: The general rule is that 80 per cent of revenues are from advertising and approximately 20 per cent are from circulation. Clearly, in harder economic times, a newspaper will be less profitable because the advertising economy is not as strong and so advertising revenues are in decline.

I am happy to provide some supplementary information. We measure this each year in terms of lineage and of revenues. We have a number of trends on such things as the ratio of national advertising, retail advertising and classified advertising. Clearly, classified ads have taken a hit. Thankfully, some of that has migrated to the Web sites of newspapers. Those papers that were not on the ball in establishing good Web sites right from the get-go, will now pay the price. The Internet lends itself well to that kind of advertising and so a number of newspapers are benefiting.

The year 2002 saw a small dip in advertising revenues. The early signs for 2003 are that we are beginning to notice a little recovery. Newspapers will be fairly strong in 2003.

Senator Graham: Are you at liberty to give us some hard figures?

Ms. Kothawala: Do you want hard figures for actual revenues?

Senator Graham: Yes — and for profitability.

Ms. Kothawala: I do not have those at hand but I can definitely send them along with the rest of the information.

The Chairman: Add that to your homework, if you would: revenues, lineage and information on profits. We had an interesting presentation last week from some financial analysts who gave us some estimates on EBITDA, earnings before interest, taxes, depreciation and amortization. It was 20 per cent at Torstar, 30 per cent for broadsheet and 40 per cent for community weeklies, but that is not your concern. This presumably excludes the National Post.

Ms. Kothawala: To the extent that those are public companies, that information would be available and I would be happy to provide it to the committee.

Senator Corbin: I have three brief questions: Do you provide legal assistance or advise your membership?

Ms. Kothawala: Yes, we do, in the sense that we send out a legal affairs bulletin, The Press and the Courts, to the lawyers in our industry who represent the various companies. In that way, they are apprised of activities across Canada, whether it be labour laws or developments in Charter cases. We exchange information with our members to ensure that they are current on all legal developments. As I said, a number of laws have an effect on the newspaper publishing business and so we must ensure that we know what is happening throughout the country.

Senator Corbin: I know that weeklies are not your bailiwick but weeklies have been particularly hard hit by the GST and Canada Post rates; and you mentioned the GST earlier. Could you give me a figure of the savings that would accrue to the dailies if the GST or the PST were to disappear?

Ms. Kothawala: Again, that is a good question and I can certainly follow up. I would not have the figure at hand but I will add that to my list.

The Chairman: There would be two elements involved: One would be the savings to the consumer — the readers — and there might be some actual saving to the newspapers as well in terms of administration.

Senator Corbin: Were you suggesting that you would have a bigger readership if you did not have the GST?

Ms. Kothawala: That is correct.

Senator Corbin: Have you done studies to that effect?

Ms. Kothawala: We have done studies that particularly looked at the impact that the GST had on readership and circulation. Keep in mind that we are not just talking about the GST because Atlantic Canada has a blended tax. We are actually talking about both levels of tax — GST and PST, with the exception of Alberta and Ontario, where there is no PST on newspapers.

Senator Corbin: A final brief question: What percentage does Canada Post represent in terms of circulation? How much circulation is handled by the post office?

Ms. Kothawala: Again, I do not have the figure off the top of my head but I will endeavour to obtain it for you.

Senator Corbin: Canada Post policies over the years have had quite an impact on the circulation of printed material, especially weeklies. I am not so sure about dailies but I would like to have a good picture of that.

The Chairman: We will also want to hear from community papers, which probably have that information right at their fingertips.

Ms. Kothawala: That is fundamental to their business.

Senator Carney: I have a supplementary to your question on data and then one question. I am still not clear on whom your directors are, how many directors you have now and where do your association revenues come from? Is your $2 million budget prorated on the basis of circulation?

Ms. Kothawala: That is correct.

Senator Carney: The big national dailies such as Torstar and CanWest Global pay the bulk of your costs.

Ms. Kothawala: That would be correct.

Senator Carney: My question deals with the impact of the Internet on newspaper circulation and revenues. You pointed out that 20 per cent of your newspaper revenues come from circulation. How are your members dealing with their charging consumers for print versions but it can be read for free on the Internet?

How do they cover those costs and how long can it continue? Youth are reading their news on the Internet, not in print. At what point will newspapers charge for Internet distribution of their news and how will they collect it?

Ms. Kothawala: That is a very topical issue that, again, is being debated around the world in terms of subscription- based Internet newspapers. There are a number of companies that have done that successfully, including a few Canadian companies.

The Kitchener-Waterloo Record recently went to a subscription base for their version of the newspaper. From what I understand, it was quite a seamless progression. They did not get a great deal of push-back from consumers. They were happy to pay a fair price for the ability to access the newspaper on-line.

It is still in the early days. First, newspapers had to show that they could get it right and that they could ensure that they were extending the strength of their brand. Now that readers want it and they turn to it is the time to start looking at charges.

Senator Carney: Every newspaper has a Web site and disseminates the same information for free as they charge for print. What are they doing today? Are they financing that out of their general revenues and just writing it off.

Ms. Kothawala: That is right.

Senator Carney: Surely, there must be some clearer plans among your members about when they will charge for it. There must be some forecasting.

Ms. Kothawala: I am not privy to the business plans of my members. I can share with you newspapers that have already moved in that direction. I know that there are others than the Kitchener-Waterloo Record. It is fresh in my mind because they have been quite successful. A number of newspapers have introduced that model quite successfully, including the New York Times.

You are quite right. Over the long term, you need to ensure that there is a sustainable economic model there in order that newspapers continue to be relevant and to ensure that they are being paid.

Senator Carney: You said that the youth do not get their information from the newspapers but rather from the Internet. Also, I get my subscription to the New York Times for free.

Surely your members have done much work on convergence. They might be able to give the committee information on the cost of Internet distribution of news. At what point do they anticipate charging for it?

Ms. Kothawala: One of the models that has worked quite well is on the classified side. You are finding much up- selling in terms of combining. If you want to have a classified listing in the newspaper, for an additional $2.50 or $3, we would throw that on-line as well.

That has been one of the measures that has been successful in terms of recouping some of that. I will provide you with further information.

The Chairman: Do you know how much the Kitchener-Waterloo Record is charging?

Ms. Kothawala: I do not.

The Chairman: That is not really your job.

Second, from time to time people talk about the huge readership of the New York Times Internet version in Canada. It swamps the industry. Is this an urban myth. Is there any data to support that?

Ms. Kothawala: I believe there is data. I have seen figures bandied about that seem extraordinarily high. I am sure they are not manufactured. They must be based on research. Again, I would endeavour to get that number for you.

The Chairman: If you can, that would be helpful. I am not suggesting anyone makes them up. The figures sound as if they are based on misinterpretation.

It is a wonderful newspaper, but numbers that high? Anything you could give us would be great.

You said clearly that your membership is not in agreement on the matter of foreign ownership, so I will not ask you to take a position on it. However, we did have one witness last week who said that there is no evidence that there is a great tidal wave of foreign capital just waiting to sweep into Canada. Do you know anything about that? Do you have any evidence that foreign investors would be interested in coming in here, and if so, who?

Ms. Kothawala: It goes back a number of years. I remember that one of the big newspaper owners in the U.S. had written an Op-ed piece in the Globe and Mail basically talking about how if Canadian newspaper were to come up for sale and if he had the opportunity to purchase them, he would like it.

It was Tony Ritter. He had done a piece in the Globe. He had basically said that he would love to have the opportunity to be able to purchase a Canadian newspaper, but he could not. He viewed that as a real problem.

I am sure the analyst is better informed in these matters than I am in terms of understanding the market. That is one example of the interest in some of the U.S. properties that might be interested in purchasing Canadian titles.

The Chairman: Thank you very much, Ms. Kothawala. This has been an extremely useful session. The information that you will provide will be very useful.

Ms. Kothawala: I will be happy to provide that.

The Chairman: We are grateful for your time.

Our next witness, honourable senators, is Mr. Peter Kohl. Mr. Kohl has, in his career, worked as a general manager and a publisher for both Southam and Thompson and as President of the Quotidiens du Quebec. He has also been a director and member of the executive committee of the Canadian Press, and the Ontario Press Council. In addition, he holds a newspaper award citation for editorial writing, which is something that is much to be applauded.

If you have had time to get yourself installed, Mr. Kohl, I welcome you to the committee. I am sorry but we have only 32 minutes with you. If you want to split it, you can give us 10 minutes of statement and 20 minutes of questions.

Mr. Peter Kohl, As an individual: Honourable senators, you have in your folders some thoughts I put together because I needed to get my mind organized. I am some time away from a personal experience in the newspaper business, but in this multimedia universe one, having been in the business, follows it closely.

The work of this committee is extremely important for our country. An informed citizenry is the absolute bedrock for the preservation of our democratic way of life. I wish more people could share that fundamental belief. It is extremely important the work you are setting out to do and I wish you success.

It would be useful if this committee were to take as one of its tasks the definition of what is meant by freedom of the press. You will hear many definitions. The one that bothers me the most right now is coming out of the media itself, particularly CanWest.

One CanWest executive has asked: "What makes journalists think that their freedom of speech is superior to mine?" That is an owner. Another said that freedom of the press means freedom from state interference. This is becoming very popular; this is what the media is deciding. Another belief is that the freedom of the press as a propriety right of the people is a subversive conclusion. You should address yourself to this because it could be the bedrock of your approach to asking questions of people. Do we have freedom of information and what are you doing to preserve it?

You have before you what Hugo Black said on the subject. I commend it to you. The problem is that in the current ownership, with cross-ownership now accepted, with convergence now accepted, with media owned by conglomerates, there are enormous grounds for conflict of interest. You can see it happening every day with owners entering the newsroom — particularly one owner — and instructing changes in copy. This is extremely dangerous for democracy. It upsets me enormously, as you can see.

The problem is, in this day of conglomerates and cross-ownership and convergence and multimedia, how do you have owners who understand the public responsibility to provide information that is free of interference? Editorial independence used to be the bedrock of the good media corporations. We have lost it or are losing it.

The threat to newspapers, I will not go on at length, you all know what is happening. What bothers me is the last two moves. CanWest, I do not know whether you like it or not, but CanWest has almost succeeded in destroying the finest news organization in Canada in the last century, Southam.

The most recent move is to take the national news reporting into Winnipeg. Presumably, all of the newspapers will have the national news. It is right down the corridors from the corridor of power. The last devastating move is they have decided that the publishers are in the way of them controlling their newsrooms, so they simply abolish the position of publisher.

One of the publisher's principal roles is to shield his news staff from the pressures that surround them all the time. People want news suppressed, people want news printed, they want it changed, and now the owners are in the game.

How do you change the mindset? Can regulations change the mindset of owners? I do not know. It is a huge question. I will deal with it, if you will give me a few minutes.

I have the advertisement for the new general manager of the Calgary paper, who got bounced. I do not know what he did. His newspaper is the only one that published my letter. He is gone. I do not think it is cause and effect, but it shows that newsroom was receptive. There is no publisher. The general manager reports to Winnipeg. His national news comes from Winnipeg. His role is development of editorial content, through working with the editor-in-chief and team.

This man, in the past, has run the business part of the business. The newsroom and editorial staff respond to the publisher and they try keeping the business and news behind some kind of a firewall. It is really gone.

Then quickly, the Canadian media and the American empire — I think the CRIC-Globe survey shows clearly there is a difference in Canadians' viewpoints on the world. We are a distinct society. We are capable of behaving like one. Take the pressures for us to join the coalition of evil, or whatever they want to call it.

I think now we are getting more of our foreign news from Associated Press than we used to. The Canadian Press used to have five bureaus around the world. Now we have two, Washington and London. I think we are getting washed in our television, in our movies, in our books, with Americans. I think the newspapers are potentially one of the last barricades to allow Canadians to state their own beliefs, to find out what they believe and to get behind what they believe.

The preservation of content rules is extremely important. You are talking about whether Canadian media would be susceptible to purchase by the Americans. My guess is, you have BCE considering chucking CTV and The Globe. Do you not think that if that was put on the market and there was not some protection against Canadian-American ownership, that it would not be snapped up? It would, and one of our better news organizations goes down the tube.

I think the protection of Canadian media from foreign ownership is extremely important. I hope you will stand behind that.

I think the Canadian content rules are excellent. They have been a miracle for Canadian music. I cannot say much for Canadian television programming, but for Canadian music, it shows what you can do if you decide you want to do something.

The Competition Act right now is a disaster. It has done nothing and can do nothing. The commissioner was so distressed by his inability to stop the waves of conglomeration and mergers in 2000 and 2001 that he went to the Commons committee and said, "Please would you address yourself to the Competition Act. We need to get some safeguards in here." He was ignored. The result is, you have all the cases, which are laid out on page 5 of my brief.

What has happened is that the old test of detriment to the public interest went out the door in 1985. Since then the floodgates are open and we have had no protection. We have had no guidelines, no public policy. The only test the Competition Bureau has been able to apply under these rules is whether a merger or an acquisition has an effect on the advertising market in the newspaper business — not all business, newspaper business. Of course they failed every time. Just look at page 5. It is a disgrace and I suggest you address yourself to it.

CRTC, I am on thin ground here because I am not really knowledgeable, but I cannot help but observe that the CRTC, up until recently, was talking about broadcast. It is the Broadcast Act they administer. This is another lapse. Why are we looking at the broadcast as different than other sources of information? They are not pooled. The CRTC now has pooled itself into newspaper advertising, not media advertising.

CRTC has confined itself, maybe by its legislation, with broadcasting. In this day and age, you cannot put them in pockets. We are in a very multimedia age, as you know.

In the August 2001, CRTC, faced with the CanWest Global acquisitions of Hollinger and Southam, and the BCE, CTV, and The Globe and Mail thing, introduced a statement of principles, which you will find in your package. They are trying to build a barrier between the newsrooms, in the conglomerate case, and between newspapers and television.

They are saying we have to have separate newsrooms responsible so we get diversity that way. I think, nice try, but when you have those newsrooms reporting to some bird in the same place, they can be separate but are they independent? How do you guarantee independence?

I think it was a nice try, but I think the convergence issue is long out of the barn. However, the CRTC is now beginning to think they should be paying attention to these issues of freedom of information. I would suggest strongly that you direct yourself to what may be done there.

I have developed some ideas, a number of ideas. What I am trying to address is —without having the state overtly enter the newsrooms which I think is very bad, but it is just as bad to have a small group of owners in the newsrooms — how do you deal with this? Can you deal with it with legislation? Can you change mindsets? I have come to the conclusion that you must get at this through public scrutiny. It has been said before by the Davey commission, the Kent commission, and some of other people have said the same thing. What kind of scrutiny? I have a very specific kind in mind.

I go back to my earlier comments on the definition of freedom of the press. What follows is predicated on my definition of what you might look at as a definition of freedom of the press, because it would stand the public and the media in good stead if there was a common definition.

My preference is to equate freedom of the press with freedom of information, meaning the right of the public to receive complete, fair, unbiased and accurate information from the media; and the media's obligation to provide this information from disclosed and known sources, and the media's right to be free from undue government interference.

The proviso, of course, is that the media are doing those things. How do you ensure that they are providing unbiased and complete information? For public education, you can say the education of media owners is the first place to start, but that is a little different matter. First of all, the one paper, the state paper that Patrick Watson suggested to you, is a bum idea. The one paper of opinion, and let the rest go free — I, along with a couple of other people, do not think it would work for two minutes.

On the undoing of cross-ownership, I would love to see it undone. Can you turn the clock back? Can you legislate retroactively? I guess it could be done, but do you think our politicians will do this? I have tried the minor way, like the commissioner of the Competition Bureau, to get Parliament to pay attention to these issues. The conclusion I have reluctantly come to is that concentration of the media is not just chilling ownership; it is not just chilling newsrooms, it is chilling our elected representatives. This is one reason I am very glad to see you people doing this, because you have a certain amount of freedom that elected representatives do not have.

Undo cross-ownership? I wish us good luck, but I do not think it is realistic. I hope you people will come up with things that can be achieved. I know what we would like to achieve; I could write that book, as could everyone here, but what can we achieve to ensure freedom of information? It is a complex world that has gathered around us for lack of any mechanisms to protect us.

Regarding public education, let us get the meaning of freedom of information out. Believe me, the Canadian public has been so lucky with its media until recently that they do not even know they are being, to use a polite phrase, screwed at the moment.

Rate the media and publish the ratings in the realm of publication. The prime vehicle I am thinking of is a freedom- of-information institute or something like that. It has been called a watchdog or an ombudsman. It has been called many things, but this is a little different. Its primary job would to be to educate the public. Secondly, it would assess the condition and good health of the Canadian media, and report it, and compel publication of it, semi-annually. Ensure that the CRTC is obligated by legislation to take this whole freedom of information and the public good into account in any renewal of licences. This is where you will get scrutiny — you get scrutiny at every stage.

You put the Competition Bureau back into the business with the public interest test again and acquisition for everything from now on. If you want to get at the obstruction of the news in the media — particularly in newspapers — that is going on, the only way I think you can get someone where it hurts is through the broadcast licences.

You say to the CRTC, here is the new power. Here is what you will do from now on. We are going to get this body set up to report to you twice a year. What are the obstructions to freedom of information in this country? When you come to grant your licence, you must take the public interest into account when do you it, and you must have this report before you. Public scrutiny — if there is anything some of these media people do not want, it is this kind of discussion. There has not been a discussion on the health of the Canadian media that I can determine.

On the Canadian identity, for goodness sakes, we should maintain our Canadian ownership limits and our content rules. So far, that is the last bastion we have. Amend the Competition Act — I guess you know where I am going with that one — it is on page 9. Recreate the test of detriment to the public interest. Why should we not? That is what we are talking about. Why should the Competition Bureau be testing whether John and Sam will be competing for advertising dollars when the whole information system is being disrupted? It has nothing to do with advertising dollars. I care less about that than I do about being honestly informed.

With the CRTC, again, I would hope that you would recommend enshrining the separation of the newsroom with other kinds of protections in whatever act they have to create. Use a detriment to the public interest in all licensing decisions to have them obliged to take the report of this new instrument into account. In other words, you put the scrutiny in at the point of decision-making. We have not had this. We have not had it either with the Competition Bureau or with the CRTC.

The witness before was a very earnest person. She talked about the 1995 principles of interest and so on — it is in your paper somewhere. That was actually written in 1975 by the late Martin Goodman and Clark Davey in the editorial division of the old Publishers' Association. They introduced it over the dead bodies of the publishers. They threatened to resign as a committee and go public if they did not take it on.

When I went to the Internet, I was astonished to find this marvellous statement of freedom of the press. It talks about freedom of information. It talks about public responsibility. It talks about public trust. It talks about all the things you want to hear. If you can believe what you have been seeing, happening, if anyone read that thing, I would be absolutely astounded. They could not have read it. They could not do what they are doing if they had read it and believed it.

Within the media itself, I would suggest that all editorials be signed. Even though the national editorial policy is fuelled by public outcry, mostly from within the media, we all know what happens. If the owner wants certain things to happen, he just reassigns editorial page people, like at the Montreal Gazette — you know about that one.

The Chairman: No, actually. I must tell you, Mr. Kohl, that I ran their editorial page for 15 years and what you describe is not what happens.

Mr. Kohl: You ran it in the good old days. In the good days, it was not true. I started by saying, the best news organization going was Southam — you and I were lucky to work for it — because Southam overtly and publicly stated that part of their business was business and part of their business was to operate the news. They had independent editorial departments at their newspapers because they believed they had a public trust function to perform. That is what I am saying is gone. You and I were lucky.

I was not so lucky when I hit Thompson, but Thompson just starved the newsroom. Russ Mills, when he testified here, said the same thing about Conrad Black, with a few exceptions. He worked with Southam, with Conrad and with me — I guess he heard something about Thompson. They never walked into the newsroom — well, Conrad did, but at least you knew he did it and he signed his stuff — but they did not dictate to their editorial departments. If they were not happy with them, they could sack them; but on a day-to-day basis, their editorial departments were honestly independent. There is no such thing any more. That is what has got me going.

I would suggest that every editorial be signed, as they are now in the Quebec media, because if they are going to come from somewhere, I would like to know where, please. I need to know who is addressing me — we all need to know who the hell is talking to me now. Are they talking to me from Winnipeg, or from office towers in Montreal or from New Brunswick or where?

I would require the editorials be signed, that news stories and op ed pieces emanating from the group news desks — you know what they are — be by-lined by the lead author, and their desk of origin disclosed. I have been looking at the Montreal Gazette recently, and the last couple of CanWest news opinion pieces have indeed said CanWest News and the writer's name. I would lock that into law so that at least you would know where they are coming from. That is important.

I would suggest that we require all media groups and individuals owning media to publish statements of principle dealing with freedom of information, quarterly and prominently. Take one-half page twice per year, or three or four times per year, for a statement of their principles and their obligation to the public. You may have noticed that the Quebec National Assembly last December passed a resolution unanimously asking Southam News, that is CanWest, to publish a statement of principles and commitment to news policy and diversity.

I do not know if anything can be done about press councils when the membership is partly media and partly public. When I was on the Ontario Press Council, there were two media representatives and the rest were prominent public members. The advantage of having news people on press councils is to tell the rest of the board how the system works. The disadvantage is that the watchdog is in there with the chickens. That is not always a healthy situation so I would suggest the freedom-of-information mandate be placed on the provincial councils, although I do not know how you would do that. Perhaps you could have them report yearly on how freedom of information is working in their provinces, and use the media representatives as non-voting advisors only, although I do not hold out much hope for the press council. I think that they do a reasonably decent job in handling public complaints but it is not exactly a free situation.

The Chairman: You covered an enormous amount of ground for us.

Senator Phalen: Mr. Kohl, I have raised this question to other witnesses and I will raise it now to you because you alluded to it on page 1 of your presentation. Who controls Canada's media conference? Mr. Russell Mills stated that the primary allegiance of good media companies must be the citizens of their communities and not to shareholders, advertisers or employees. Mr. Tom Kent, when before this committee, said that newspapers, because of their role in information that is vital to democracy, are not only businesses. You said, in the last sentence of the last paragraph on the first page of your submission, that the challenge will be for this committee to devise some non-government mechanism to protect the media from itself.

Could you elaborate on that and tell us how you think that might happen.

Mr. Kohl: I scored out to protect the media from itself because that was a shorthand comment. The challenge now seems to be for your committee to devise some non-governmental mechanism to ensure that the public good is served in this era of concentration and corporate narrow control, conglomerates and cross-ownership. That is what I proceeded to deal with — the mechanisms. How do you do that? You try to get this freedom of information institute up and running. You oblige the CRTC to do certain things and you enable the Competition Bureau to do certain things. You just go through the whole thing and set up the mechanisms so that the public interest comes up in each and every decision: Is this good and in the public interest? That is the only honest way that I can think of to regain some control of the situation that we have lost.

Senator Phalen: Who champions this? If it is not government, then who will do it? Who will set up the mechanism?

Mr. Kohl: That is a good question and I hope that honourable senators will give it some considerable thought. The optimum situation would be where there is a great deal of money to maintain arm's length — about $200 million seed money. The system would live off that. Then, you would set up a trust fund to operate from that day forward so that it would not be beholden to the public. I do not see how you could do in any other way. Then the question is: Whom does it report to? If it reports to Parliament, does that make it political? If it reports to the Senate, does it make it less political? Does it report to the public? In other words, you set up the mechanisms to get as far away from government as possible. You build firewalls but I do not think you could ever have a publicly funded body that would be absolutely free to go off into space. It is a delicate balance.

Senator Carney: First, let us establish for the record that there is nothing wrong with Winnipeg. You keep talking about Winnipeg and yet Winnipeg is a fine city.

Senator Spivak: Thank you.

Senator Carney: You are talking about centralized control so let us have that on the record. Am I correct?

Mr. Kohl: Yes, I am talking of Winnipeg as the current source of CanWest, currently the biggest sore in the media world, unfortunately, and I cannot deny that.

Senator Carney: I want to take a different tack for the sake of being the devil's advocate. You have told us that by removing the firewall of the publisher and replacing it with the general manager responsible for input to editorial policy, it would lead to biased news, lack of diversity and fewer voices, which is not in the national interest. In essence, under freedom of the press, there is no role for government beyond effective competition policy. There is no role for government in determining who says what, where, when, who and why, although I admire your suggested list of mechanisms. What is wrong with leaving it to the marketplace? In my case, the mail boat delivers four newspapers: the Victoria Time-Colonist, the Vancouver Sun, the Vancouver Province, the National Post and The Globe and Mail. Five newspapers come to my island by boat and four of them have much the same content, the Victoria Time-Colonist, the Vancouver Sun, the Vancouver Province and the National Post all have much the same kind of content.

Mr. Kohl: They have the same owner.

Senator Carney: Yes. I only buy one that is different, The Globe and Mail plus one local paper, either the Vancouver Sun or the Victoria Times-Colonist. Out of that basket of five papers, I am only choosing two because the others are redundant. If enough Canadians do that across the country, the market for one voice will diminish. No one wants to pick up two papers that are basically the same thing with the same newspaper artists, articles, editorials, columnists and drama critic. You do not need that. Logic tells us that that product will die on the vine. Why do we not just leave it to the marketplace?

Mr. Kohl: In my view, there are local monopolies that repeat your experience all across the country. If you go to Edmonton or Calgary you will find the same thing. If they are writing the national news from head office, then you will read the same thing in Victoria and in Vancouver in the two papers.

Senator Carney: My point is that I am not buying those papers because I do not need to have three or four versions of the same voice.

Mr. Kohl: You personally are not buying the others but if you go to Winnipeg you will hear a different opinion because the paper is not owned. It would be the same in Montreal, Charlottetown and St. John because all of the provincial capitals except Quebec City and Winnipeg have one-owner newspapers and CTV, which covers 94 per cent of Canadian English language homes. My answer is that I do not think this is healthy for diversity of opinion. I do not think it is healthy when there is such a small ownership group in a position to establish our news agenda. What is important to the nation? In the good old days, the individual publishers operated independent news operations and editorial page operations. That is where diversity occurred. You could say that they were common owners, well they were. However, the owners had a different mindset. Since that mindset seems to have eroded, why not let free enterprise do it. Well, let us talk about Enron, for example.

Senator Carney: You have not answered my question. I have been a columnist and on the boards of newspapers. I am simply saying that as a consumer faced with five newspapers, four of which are saying the same thing, people should not buy them.

Out of five newspapers, I buy two. I do not want to hear the same voice that will be repeated, and read the same columnists. I do not buy it. I do not listen to the same columnists on television. I turn it off.

I am asking you, as a devil's advocate, why do you not just leave it to the marketplace? If you centralize and reduce the diversity of voices and just have one message, the consumer eventually may not buy it. They will buy the products that are diverse in giving news. They will buy the weekly newspaper on turn on the Internet. Why do you not let these centralized newspapers, such as CanWest, whither on the vine?

The Chairman: You have made your point. We are going into overtime.

Mr. Kohl: We come from different places. The public good is ill-served by having common voices out of small groups into every major city in Canada because the agenda of what we believe is important should not be set that way. The more there is diversity in voice, the better. I do not think it is healthy at all.

Usually in an undemocratic society, you get one voice in the news. We are now getting a handful.

We have four different corporate conglomerate owners in the news. They have huge interests that conflict with freedom of information.

I am suggesting that we would be better off as a democratic society to stay as unbiased and detached in the news across the country as possible. It is never possible to do entirely, but it should be done as much as possible.

Senator Graham: Mr. Kohl, no one could ever accuse you of being wishy-washy in your views. I will hitchhike on the last couple of words you used in terms of a democratic society in talking about the freedom of press.

You say in your presentation to contrast all of this with some recent definitions of freedom of the press by some CanWest media representatives. When equating freedom of the press with free speech, one asks what makes the journalists in his employ think their freedom of speech is paramount to his? Then you say in the next sentence that another CanWest person says that freedom of the press means freedom from state interference.

What is wrong with that? There are countries all over the world trying to strengthen or achieve democracy. Among their paramount objectives is to have a free press. Whether it was in 1986 in the Philippines, whether it was in 1989 in Paraguay, whether it is in any communist controlled country, what is wrong with someone saying that freedom of the press means freedom from state interference? I believe that.

Mr. Kohl: I believe that, too, but I believe that is only part of it. Freedom of the press is freedom from state interference. If you read my definition it is the freedom and responsibility that once was recognized by owners in the good old days. Today, it is shot.

You will have people here, with people frothing at the mouth I guarantee, saying that freedom from state interference is what freedom of the press means. Many people take it to mean freedom of individual expression. In the Charter of Rights, freedom of the press expresses a subsidiary of freedom of expression.

Some will say: "No, no, freedom of the press is not freedom of expression with all that entails, it is freedom for you to get the government off my back, so I can do what I want."

Senator Graham: There are all kinds of questions I would like to ask. I would like to pursue that point with you. Generally speaking, how do you compare freedom of the press in Canada with the United States?

Mr. Kohl: I would say that they are about the same. You have less cross ownership in the States. You have less conflict of interest and less power.

We opened that gate. The Americans are just now discussing whether they will open the gate from 35 to 45 per cent of audience participation by a conglomerate. We do not have any rules. Tomorrow CanWest could buy anything.

Would it interfere with advertising? The Competition Bureau has said that it is a change of ownership. Look at the list of cases. They do not say: "Is this in the public interest?" They just say: "Does it affect advertising?"

It is pitiful, truly pitiful. The commissioner is the first one to say so. I hope you will hear from them.

The Chairman: You can be sure that we will.

Senator Gustafson: Senator Carney stole my thunder about Winnipeg. However, it does seem that when the power structure starts to move west, someone starts to throw in a national energy policy. I cannot help but guess that you are from Toronto.

Mr. Kohl: No, I am from the unincorporated hamlet of Georgeville in rural Quebec.

Senator Gustafson: You know where I come from.

Mr. Kohl: I spend a month of the year in Vancouver. I know those papers well. I spend a month of the year in New Brunswick, and I know those papers well. I could go on about those two bunches of newspapers. If you want to know what is happening in Canada or the world, help yourself to some other newspapers.

Senator Gustafson: I just wish to point out the impact of media and what the feeling is in Western Canada. The media has some responsibility in all of this.

This takes much time. Perhaps I should not even open the subject: I am very concerned about the anti-Americanism in this country. My farm is 20 miles from the U.S. border. We get along very well with our neighbours.

Problems have happened by people making foolish comments. We are paying a big price for it.

The bottom line is, the Americans do not really know that we exist, unless we start calling them names. Their media pays no attention to us.

Senator Spivak: Good.

Senator Gustafson: Some say "good", but I am concerned about that. We found out how important that market is to us in the mad cow disease case. We have not got a market without them.

There should be some caution on this in the media.

As far as the National Post is concerned, I think they did a good job of handling that one.

Mr. Kohl: This is a big can of worms that you opened. I agree with what you are saying. I would like to see a Senate with some provincial representation. That would be an excellent idea. I would like to see the media doing a better job of informing.

On the American issue, when approaching the Iraqi war, we got all the misleading stuff that the Americans put out in their media. I am not talking about anti-American. I am talking about media.

If your information base shifts south of the border, if they go to attack Iran next, all our media would be saying, "We have pictures of them doing bad things." If that were to happen, I think that we have lost control of not only our agenda, but also of our nation. It is difficult.

You say that is bordering on being anti-American. I know the danger.

Senator Gustafson: Canadians watch CNN at their choice.

Mr. Kohl: Look at how the American media handled the post 9/11 situation.

They were traumatized. They went through the lead up to Iraq with rollover stuff. The media used pictures and figures from the American government. They failed entirely on their watchdog role. They are now starting to comment on it after the bird has flown.

Senator Spivak: In essence, is freedom of the press merely the idea of letting reporters write whatever they want, or is it also about a balance of power?

Mr. Kohl: It is certainly a balance.

Senator Spivak: If it is about a balance of power, then it is a hopeless task.

Mr. Kohl: I do not think it is a balance of power. The CNA is probably doing a very good job if you look at what they are trying to train their reporters to do. From my experience, good news people do have a distinct sense of ethics. You might be surprised, but I believe that. They really want to do a good job.

Senator Spivak: You are talking about journalism and reporters.

Mr. Kohl: If someone wants to suppress a story, your reporter must have an editor who will say, "Look, are you on good ground? Go and do it. I will protect you." That is good journalism and good journalistic management.

If you remove that from the local scene now to some place far way, then you have lost the independence of your individual journalist. You are talking about chilling in the news rooms across the land. You bet there is chilling.

I have talked to journalists at almost every major newspaper across Canada in the last while. The ones who spoke freely a year ago are saying, "Sorry, I cannot talk. I have to keep my job." They are running scared in the news room. That is worse.

The Chairman: Mr. Kohl, we are well into overtime at this point. Thank you very much for appearing before us. You have covered an enormous amount of ground in a highly controversial fashion. Controversy is not a bad thing.

Mr. Kohl: My main hope in appearing here is that some of these issues will attract your attention sufficiently so that you go into that.

The Chairman: You need have no worries Mr. Kohl. We are looking at these issues.

The committee adjourned.