Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 7 - Evidence
OTTAWA, Tuesday, April 27, 2004
The Standing Senate Committee on Transport and Communications met this day at 9:40 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.
[English]
The Chairman: Welcome to honourable senators and to our witness as we resume our public hearings into 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 in light of the tremendous changes that have occurred in the recent years, notably globalization, technological change, convergence and increased concentration of ownership.
[Translation]
Today, we have the great pleasure to welcome Mr. Bernard Descôteaux, Director of the newspaper Le Devoir in Montreal.
Mr. Descôteaux, welcome to the Senate and thank you for coming to meet with us. As you know, our usual format is to give witnesses about 15 minutes to make a short statement and then we have a question period. I would invite you to go ahead.
Mr. Bernard Descôteaux, Director, Le Devoir: Thank you for inviting me to this meeting. Your work is important and I strongly hope that you will come up with recommendations that will inspire our governments both in Ottawa and in the provinces.
Independent newspapers are a rare species in Canada. There are only five such papers. The two largest are published in French: L'Acadie nouvelle in New Brunswick and Le Devoir in Montreal. In a context of major newspaper chains and conglomerates, the life of an independent newspaper, as you can imagine, is not always easy. In the newspaper world, Le Devoir is what I might call a distinct society, a special case. It is often considered an institution in Quebec and even though not everyone reads it, everyone knows it and, if they do not all love it, they all respect it.
When the newspaper has run into difficulty, everyone comes together to help it weather the storm. A recent event illustrates this point very well. In the fall of 1990, an evening benefit for Le Devoir was attended by Prime Minister Brian Mulroney, Opposition Leader Jean Chrétien, Bloc Québécois Leader Lucien Bouchard, NDP Leader Audrey MacLaughlin, Quebec Premier Robert Bourassa, Party Québécois Leader Jacques Parizeau, the Mayor of Montreal and the Mayor of Quebec City. You have to admit that it is quite extraordinary to get all those people around the same table on behalf of a newspaper.
Our newspaper is special in that it does not belong to anyone in particular, unless it is to Quebec society, which it purports to serve. Of course, the shareholders of Le Devoir share the conviction that they are acting for the common good when they invest in the paper. In fact, shareholders, readers and those who work at the newspaper feel that it belongs to them. The result is that the paper has a huge amount of support.
Le Devoir was founded in 1910 by an independent-minded man named Henri Bourassa, who sat for a number of years in the House of Commons, first as a Liberal MP and then as an independent, in order to maintain his freedom of speech. It was to promote and defend his ideas that he decided to establish a newspaper.
Henri Bourassa was not independently wealthy, and so it was his friends and admirers who provided the necessary capital to launch the newspaper. Throughout its history, the friends of Le Devoir have always been there to financially support it.
What made Le Devoir different from the outset was the total independence given to its director. To ensure this independence, Le Devoir's founders provided Mr. Bourassa with a block of shares that made him the majority shareholder of Imprimerie populaire limitée, the newspaper's publishing company. The idea was to prevent any pressure being exercised by shareholders to make him take a given editorial position.
In the early 20th century, most newspapers were affiliated with political parties, and Henri Bourassa wanted to stay far away from parties and big capital. The only influence that he accepted was that of the church, which is another story.
Mr. Bourassa prepared for the future by taking steps in 1928 to ensure that Le Devoir and its work would continue after him. He came up with a legal device to preserve Le Devoir's independence.
He did not want Le Devoir to be able to fall into the hands of anyone who might deviate from the purpose for which the paper was founded. He wanted to make it impossible to sell the newspaper or to be inherited by members of his family who did not share his interest.
Henri Bourassa also prepared a trust deed to ensure the continuation of Le Devoir once he left as director of the paper in 1932. Two trusts were created at that time. The first was given the majority block of shares from Imprimerie populaire that had been held by Bourassa. The second was given another block of shares, so that the two trusts together held more than two-thirds of the company's shares and have absolute control over any action that might be taken.
The trustees, however, would not themselves exercise the voting rights associated with their shares. It was agreed that the director of the newspaper, upon being appointed and throughout his or her term, would be the one to exercise those voting rights. So the director became, to all intents and purposes, the majority shareholder of the paper. Appointed for an indeterminate period, the director would exercise tremendous authority. Unless serious mistakes are made, no one can challenge the director's authority, and he or she cannot be fired. So a coup d'État is out of the question. The only thing that the director cannot do is to transfer the Imprimerie populaire shares.
Once the director has been appointed, the trusts are dissolved. They do not play an active role again until the director resigns. The members of the first trust appoint a new director in conjunction with the members of the Imprimerie populaire board of directors. Except for this power, the two trusts play a very limited role. They are there to ensure that the objectives of Henri Bourassa are carried out, at least the spirit of those objectives.
The successive directors of the paper have taken considerable latitude in interpreting those objectives so as to adapt them to the context in which they were operating. Nonetheless, the values that inspired Bourassa are still at the core of the newspaper's mission: public morality, integrity, defence of French culture in America and advancement of French Canadian society, Quebec society, as we say today.
Basically, Le Devoir still operates as Mr. Bourassa intended, even though we undertook a corporate modernization exercise in 1993. A new publishing company was launched in order to recapitalize the business. Imprimerie populaire is the majority shareholder of this new company with 50.67 per cent of the voting shares.
The director is still chosen by Imprimerie populaire, whose voting rights the director exercises in Le Devoir Inc. So the investors are minority shareholders, although they do have certain rights. For example, some of them can exercise a veto over the annual budget and the appointment of senior executives.
These investor shareholders include the Desjardins movement, the Fonds de solidarité des travailleurs du Québec, private investors and readers and employees acting through securities firms. So there is a diversified group of shareholders that guarantee the newspaper's independence. In the future, other changes may be made to Le Devoir's structure, but the trusts will be there to ensure that the spirit of the 1928 trust deed is respected.
Independence is a concept that can mean many things. The director of Le Devoir is subject to pressure from many sides. Ministers phone to complain, advertisers threaten to withdraw their adds, readers cancel their subscriptions. That reality exists for all newspapers.
The important thing for us, at Le Devoir, is to retain our freedom of choice with respect to the information and commentary that we provide. So we follow only our own criteria in deciding how to treat the news and the priority we give to the various stories we present our readers.
Our choice of commentary at Le Devoir, is guided by freedom, equality, solidarity and integrity. That spirit of independence is felt throughout the newspaper, and editors have a great deal of professional autonomy.
As an independent newspaper, we promote freedom and autonomy. However, being an independent also has its downside. We lack the resources to play the role that we really should be playing.
Le Devoir and L'Acadie nouvelle are very small businesses when compared with giants like Quebecor, Gesca, CanWest and Bell Globemedia. It is hard for us to access capital for our development. We have to make do with limited resources, which is something that we have been doing for a long time.
What makes the situation more difficult is the current transformation taking place in the daily newspaper market owing to the phenomenon of concentration. In Quebec, concentration has occurred to an unparallel extent. Two groups dominate the francophone press market: Quebecor and Gesca. The anglophone daily The Gazette belongs to the CanWest conglomerate.
The means that these large groups have at their disposal is far greater than what we have. Their strategy is to take over as much of the market as possible. They wage war against each other mercilessly, causing collateral damage to the smaller players. For example, in order to protect their market, they have developed a habit of signing exclusive agreements with their advertising clients, especially in the cultural sector. This practice is aimed at the other major player, of course, but the smaller players are also affected. As a result, the right to information is violated when the exclusive agreement includes news aspects such as exclusive interviews.
Concentration is often deplored because it reduces the diversity of information sources. A famous illustration of this was the attempt by the Asper family to impose a national editorial on the various newspapers in the CanWest group.
The standardization of content is a reality. All you have to do in Quebec is to read the newspapers in the Gesca chain and you will realize that there is a genuine trend toward standardization in order to streamline costs. The same columns, news reports and interviews are found in a number of newspapers in that group.
Cost cutting is also at the root of the concern that the role of the Canadian Press as a cooperative agency may be jeopardized in the medium term. For political reasons, no one will dare attack the existence of the agency, at least with respect to its basic services. However, CP may gradually have to abandon some of its specialized services that are felt to be superfluous by the major press groups. I am thinking here of regional news services, television schedules and special covering sports events. Some members of the Canadian Press could withdraw from those services because they feel that they are redundant.
At some point, people will start asking why they are paying for services that are not used. There may well be a repeat of the kind of crisis created by Southam in the 1990s when it sought to have its contribution to Canadian Press substantially reduced.
The ones who would suffer the most, of course, would be the independent newspapers and their readers. Concentration of the press is something that we have to live with, since it stems from the basic logic of our economic system. Nonetheless, people are continually asking whether certain limits should not be imposed on ownership, as is done in some other countries? The answer should be yes, since we have gone beyond the limits of what is acceptable in many places, especially in Quebec and New Brunswick.
The issue, however, is much too complex to be resolved by a simple cap on the ownership of daily papers, as some have suggested. That solution was proposed a number of times, but it has not been adopted because it does not take into account the ownership transfer problem. An entrepreneur cannot be forced to keep a newspaper or to sell it off cheaply because there are no serious buyers. That would interfere with the owner's rights. It could also create unfortunate situations where newspaper owners lost interest and let a paper go downhill because they were not allowed to sell it.
Rather than imposing limits, we need to come up with a review mechanism for transactions involving the media. That role could be given to the Competition Bureau, which would take into account aspects such as the diversity and plurality of information sources in a regional market, which is something that the Bureau cannot do right now.
I would emphasize the fact that this problem needs to be looked at on a provincial rather than a national scale. In the case of the Irvings in New Brunswick, the perspective is different in Ottawa than it is in Fredericton. The other role for the State would be to support diversity through financial assistance. Some people are opposed to that approach because they feel that the independence from government of the newspapers receiving such funding would be compromised. I am not of that opinion, in so far as the programs would be open to everyone and the criteria transparent.
As far as I know, the Publications Assistance Program has not compromised the independence of the magazines that have benefited from it. And when the Canadian government used to give substantial discounts on postal rates of newspapers, no one ever felt that those subsidies tied their hands.
Government assistance in the communication sector at both the provincial and federal levels is currently targeted mainly for the production of television programs in order to ensure a balance between Canadian and foreign productions aired to the Canadian public.
This political choice has been made and there is a consensus around it. If we want to guarantee diversity and plurality of information sources in the written press, we need to take the necessary means to do that and ensure that this diversity and plurality exists and endures.
I would suggest that a fund be created for the independent press in Canada, with funding coming in part from the media conglomerates themselves. In the spirit of what I was proposing earlier, the CRTC and the Competition Bureau could, for example, when they approve transactions, impose a contribution to this fund on the buyer. This could apply to transactions involving newspapers, magazines and television and radio stations.
We could adopt the approach already used by the CRTC, which imposes, as a condition to transactions being approved, tangible benefits to alleviate the potential negative impact of those transactions. This tangible benefit condition was imposed on BCE when it acquired CTV, as well as on Quebecor when it bought the TVA network.
Such a fund could help independents compete with the major newspapers. It could also lead to the creation of new dailies, which is something that many people would like to see and have raised with your committee. The fund could also support those who would like to buy back a newspaper belonging to one of the big players.
I can already hear objections of a financial nature. But we are not talking about tens of millions of dollars, let alone hundreds of millions. Le Devoir, for example, has a budget of barely $15 million, and L'Acadie nouvelle a bit less. A few years ago, a group of journalists launched a new daily in the Rimouski region of Quebec, which was called Le Fleuve. The newspaper Le Soleil covered that region as well and competed fiercely with the new paper, with the result that Le Fleuve when bankrupt barely 12 months later. Yet only $1 million or so would have enable the newspaper to survive.
This amount is nothing when compared with the millions of dollars that governments spend to produce television series that air for only 10 or 12 weeks. It is nothing when compared with the $150 million that the Publications Assistance Program had at its disposal when it was launched. I think that even a small amount of funding would make all the difference. I strongly hope that you will take that suggestion into consideration and I will be pleased to answer your questions.
The Chair: Mr. Descôteaux, your presentation was very interesting and we have questions for you.
Senator Corbin: Mr. Descôteaux, I very much appreciated your comments, which have given me a lot of food for thought. In fact, I intend to re-read your presentation very carefully.
I would like to ask you about the internal structure of your newspaper. Since its inception, Le Devoir has had to deal with many financial storms or threats of financial hurricanes and yet, it has always manage to keep its head above water, with great difficulty I believe.
How does this editorial latitude work within your team? I believe that in the past there have been conflicts between the newspaper's editorship, journalists and unions. What are your comments on this?
Mr. Descôteaux: I think that all businesses experience conflicts over issues of labour relations and over different perspectives on the right of the public to information. Tied to that is the issue of how much freedom is given to journalists. The director's degree of independence trickles down to the journalists.
As in all newspapers, the publisher is the one who is ultimately accountable. I think that as long as most of our journalists share the values underlying the newspaper, there will not be any problem, except those daily issues of course such as differences of opinion, reasons for choosing one article over another, reasons for focussing on one issue over another.
In general, our work proceeds smoothly. Over the past few years there have been a few conflicts, such as the Leclerc affair, involving serious differences between an editorial writer and the newspaper's management. That turned into a debate over labour relations. Essentially, the issue was how a journalist's freedom can be expressed.
In the end I think we came back to our newspaper's basic principles which give the newspaper's editor — the director — all necessary authority to decide whether a piece should be published or not. That being said, once the newspaper's editor has decided whether a piece should be published or not, he cannot decide on its content or become involved in its drafting. That is part of the writer's freedom.
When there is a relationship of trust between the writer and the newspaper's editorship, there is total freedom. For example, there are outside columnists who are invited to our newspaper and who contradict our editorial position.
I am very comfortable with this because they are outside people. Our readership can make the distinction between the administration's position and its invited columnists. As long as there is a relationship of trust, they retain that freedom. If, for example, we see that a columnist no longer respects his mandate, then our relationship ceases. At that point, we withdraw from the mandate we had given to the journalist. I do not know if that answers your question.
Senator Corbin: Yes, thank you. Every morning, when I wake up, I make myself a cup of coffee, I turn on the computer and I visit your website. Is it worth having this website? Is it worth it financially? Did you create this website merely to follow the trend?
Mr. Descôteaux: Initially we did it simply to follow the trend because we had an Internet fan in our staff who told us that we should absolutely have a website. He was willing to spend his own time on this website. We created a website which, today, to our great surprise, is making money. I think that we are probably a rare species amongst newspaper websites. I do not know of any other such websites that are profitable.
We decided to create this website for promotional purposes. We thought that people would visit our website to make contact with the newspaper and to read articles. Then maybe they would become interested and would decide one day to buy the newspaper and even to take out a subscription. The formula was an interesting one in that the website did not provide the entire contents of the newspaper. Like others did in the beginning, we posted the entire newspaper free-of-charge for all Internet users to read. That was a mistake. We decided to leave all the newspaper articles on the website, but we put locks on some of those articles so that if Internet users wanted to read them they would have to go and buy the newspaper. I think that this measure has had a positive impact on our circulation.
We also decided last year to offer an on-line subscription to the paper. We had seen that being done in some other countries. So we decided that it would not cost very much to do it, so we should go ahead and see what the reaction was. It has been very positive. In less than a year, we have sold nearly 1 300 subscriptions. People pay $16 a month to subscribe to the paper, which they receive as a PDF file, with pictures, in exactly the same format as the printed version. I have to admit that I am a bit mystified by our success. The Globe and Mail and La Presse in Montreal sell between 500 and 600 subscriptions at a similar price. Our intuition — because it really is intuition when we are talking about the Internet — is that it meets a need for a certain clientele that is more comfortable reading the newspaper this way, on the screen. What is clear is that there is in fact a demand there.
We did an analysis to see where our Internet subscribers were coming from. Half of them are in major centres: Montreal, Quebec, Ottawa and Gatineau. The other half are outside the country or in rural or outlying areas where the paper is available to buy, but not through subscription, and in some cases comes through the mail. Postal delivery takes three or four days. So there is a need.
We can assume that demand will certainly rise. We have not gone as far as we can with our Internet experience. We are really exploring at this point. You have to move forward, but also pull back when you realize that something is not working. It can easily become a financial sink hole.
[English]
Senator Graham: Mr. Descôteaux, I have often heard Le Devoir described as the ``thinking person's newspaper'' and you are noted for your independence and integrity.
I am interested in the term ``director.'' and I believe you are the eighth director since 1910. Where did the term come from? Is it the same as being publisher or editor? Is the term peculiar to Le Devoir? Are there any other newspapers in Quebec that have what is referred to as a director?
[Translation]
Mr. Descôteaux: I think that this tradition goes back to a time where the word ``director'' was used instead of publisher. In France, the president and CEO of the newspaper Le Monde, for example, is called the director. That is his title. In reality, I am the president and CEO of the company, but I always sign with the title of director. That is part of the tradition.
[English]
Senator Graham: Are you the final arbiter in terms of editorial policy?
[Translation]
Mr. Descôteaux: I am the final authority on all editorial issues, editorial policy and commercial policy. Of course, we have a board of directors and an executive committee like all companies do. In the board of directors and the executive committee, we never discuss editorial issues. Members do, of course, make comments to me because they read the newspaper, but they never try to put pressure on me or make suggestions.
On the commercial front, it is different. We debate these things. I submit commercial policies, contracts and budgets, and a collective decision is generally made by consensus. There is a very clear line in the board of directors. That stems from both our rules and the tradition that the board does not interfere in editorial matters.
[English]
Senator Graham: Do you establish the editorial policy in collaboration with your editors?
[Translation]
Mr. Descôteaux: Yes, we have two committees. The editorial page committee, which brings together the editorialists, meets every day. I almost always take part in those meetings. We discuss policies, editorials and commentary that we will make. We influence each other on fundamental issues. I reserve the right to make the final decisions. However, we give our editorial writers a great deal of latitude. Even if I am sometimes not comfortable with positions taken by someone, we will let the person develop those positions as long as the editorial is then signed by him or her. For example, Jean-Robert Sansfaçon, Josée Boileau and Serge Truffaut sign their editorials.
Our editorial policy is personalized. That is part of the newspaper tradition in Quebec; all newspapers sign their editorials, except for the English papers. The Gazette does not sign its editorials. This practice gives the author of the editorial more latitude.
Our second committee deals with information and meets once or twice a day to decide on the content of the next day's paper and to plan the content for upcoming days. I attend those meetings fairly regularly, but I do not always go. My role is basically to set the general policy for news and information. Like any other newspaper, we have a team in place to manage this function on a day-to-day basis. A newspaper is a daily business and sometimes everything changes from one hour to the next. So we need to allow those responsible, the publishers, desk managers and editorialists, a lot of leeway and freedom to react.
[English]
Senator Graham: You mention the trusteeship that was set up in, I believe, 1932?
Mr. Descôteaux: In 1928.
Senator Graham: If I heard you correctly, the trusteeship prevents the paper from being sold or inherited.
Mr. Descôteaux: Yes.
Senator Graham: That is an interesting word, ``inherited.'' Have you been approached at any time by some of the big chains with offers to purchase?
[Translation]
Mr. Descôteaux: Yes, by Conrad Black, to mention just one. He tried to buy Le Devoir several times. We have often had offers. Again recently, someone phoned me on behalf of an anonymous person or group that did not want to be identified and asked whether it would be possible to buy Le Devoir. The answer is no, the newspaper does not belong to me. It would be quite complicated from a legal stand to sell Le Devoir. We would have to ask a judge to change the trust deed, which would be possible, but everyone would have to agree: the board of directors, the trustees, the union, the former directors, et cetera. A judge would not agree to change a trust deed simply at the request of the director or someone else. It really is very complicated.
[English]
Senator Graham: You mentioned financial support for diversity — I think that was the term you used — and how you might receive some help, presumably financial help, without affecting your independence. I do not know how you could do that.
You also talked about the creation of an independent press fund financed partly by the industry itself. Would you anticipate the government making any sort of contribution to that fund? I mean the government at various levels. Presumably since we represent the federal government in this particular hearing, we would talk about a federal government contribution or fund.
[Translation]
Mr. Descôteaux: I made the same suggestion to the Government of Quebec. A parliamentary commission looked into the issue of concentration of the press three or four years ago. The idea was that there should always be as many sources of information as possible. Ideally, governments should not play any role in managing such a fund. In order to get it started, they could make an initial contribution. But I believe that the rest should come from the industry itself. Some of us who have given thought to this matter have concluded that the best approach would be the one that I am suggesting, that is, imposing tangible benefits when transactions take place. That is already done in the area of electronic communications. The CRTC imposes it. If I remember the numbers correctly, when Quebecor bought TVA, $30 million for tangible benefits was set aside to create new programming to support the Union des artistes and things like that.
We feel that if the powers of the CRTC and the Competition Bureau were amended, it would be possible — where companies want to buy a newspaper or a television station, if we are working in a cross-ownership context, which is increasingly the case — to make sure that pluralism and diversity of our information sources is a reality.
[English]
Senator Graham: What is your circulation?
[Translation]
Mr. Descôteaux: We sell 42,500 copies on Saturday and 26,000 on weekdays.
[English]
Senator Phalen: There have been concerns brought to this committee about the migration of classified advertising from the newspapers to the Internet and the subsequent decrease in revenues. Would you care to comment on that concern if, in fact, it is a concern for you?
[Translation]
Mr. Descôteaux: That is a fact. It is true that there is a migration of classified advertising toward the Internet and other media. Let us look at the automotive sector. In Quebec, and I imagine that this is true in the other provinces, we have magazine-type publications that people can buy. These are filled with ads for used vehicles, boats, motorcycles, et cetera. These are classified ads that are no longer going to the newspapers. They have gone to these very popular magazines. There is also the Internet, which is one reason that newspapers want to have a presence on the Internet, so that they can also get these classified ads on line. The other problem area is employment ads. We are seeing a substantial drop in employment advertising in newspapers because the ads have migrated to specialized Internet employment sites.
[English]
Senator Phalen: How can you address the problem? Is there a solution?
[Translation]
Mr. Descôteaux: There is no magic solution. We are trying to develop a presence on the Internet precisely to try to deal with this. And we need to develop other advertising sectors that can be more profitable for newspapers, new sources of income. It is not easy. The number show that newspaper share of the overall advertizing pie has been decreasing over the past 15 or 20 years. As the years go by, new advertizing media appear and this means less advertizing revenue for the papers.
We had difficulty last year, especially with our advertizing revenue, and we had to increase the retail price of the paper to compensate for that lost revenue.
[English]
Senator Phalen: Mr. Roger Landry, former publisher of La Presse, testified before this committee as follows:
No law, regulation or policy could guarantee information quality better than the desire and financial ability of a media organization to promote a quality strategy.
Do you believe there is in any role for government regulations to ensure that Canadians have access to both quality and diversity of the news?
[Translation]
Mr. Descôteaux: Yes, I think that the government can play a role as long as it is not a political one. Its role should be simply to oversee the market when transactions occur, as it does concerning commercial competition, which is also a concern when it comes to ensuring that diverse information sources are available in a given market.
In the early 1980s, the federal government stepped in to prevent a newspaper chain from buying up television networks in the same market. The rules have changed. In Quebec, we have the Quebecor group that owns two large- circulation dailies — together accounting for 44 per cent of sales in Quebec — and that also owns the TVA network, which makes it hugely powerful.
On the other side, we have Gesca with seven dailies — totalling around 51 per cent of French daily newspaper circulation in Quebec. That poses a problem. I think that if Gesca were to decide to sell Le Soleil in Quebec city tomorrow morning, Quebecor should not be allowed to buy that paper. That is what should happen, but no one can prohibit it as things stand now. So we need to make it possible for someone to say no, that cannot be done. I feel that the Competition Bureau should ideally play that role and say that in Quebec city, for example, there are two dailies. They can coexist. There is no doubt that if Quebecor bought Le Soleil, it would probably be with the intention of closing it down in the medium term. So it would be a loss.
So there need to be rules put in place that everyone is aware of and that are enforced. This is done in other countries, in the United States and Europe. I think that we could come up with an approach, in the Canadian way, as we say, to ensure diversity without directly interfering in how newspapers are managed. I believe that there are parameters that can easily be followed.
The Chairman: To follow up on what you just said about the Competition Bureau, the tradition in Canada has been that the Competition Bureau basically makes decisions on the basis of the advertizing market, but does not take into account, directly or indirectly, what some people call the market of ideas.
Is there not a risk in giving a government agency a mandate to think about considerations other than purely economic ones? If it starts to talk about ideas, and therefore about politics, among other things, in addition to things that are easily quantifiable, is there a danger there?
Mr. Descôteaux: There is always a risk, which will depend a great deal, when it comes down to it, on the people who will be called on to set and enforce the rules. In this area, what is important is to ensure that clear rules are established, that jurisprudence is developed and that the parameters are properly followed.
It is less risky than the reactions of politicians that are going to get upset someday and threaten to pass legislation to place limits on newspaper ownership in Canada, as Mr. Chrétien did when he was seeing red because Conrad Black was attacking him through his newspapers. If that had gone further, knowing Mr. Chrétien, he may well have passed a law. In my opinion, it would have been much more dangerous to have that kind of impulsive and unplanned intervention coming out of nowhere, just because a politician got mad or a press magnate became too powerful.
So we need rules that everyone can agree on. In the broadcasting sector, those rules were accepted from the outset. We do not really hear anyone protesting the presence of the CRTC. Some people would like it to be stricter, others less strict, but it is widely accepted that the CRTC should play a role in regulating the broadcast market.
I think that this system could be applied to the written press, on the condition that the rules need to be transparent, simple and easy to enforce. All the problems could be avoided if the initiative included a review provision in the legislation so that the system could be evaluated a few years down the road.
The Chairman: You mentioned earlier that ownership concentration negatively affects independent media and independent newspapers. You gave an example. You said that the big players sign exclusive agreements with some of their advertising clients that can include exclusive access to news and information. Can you explain that to us a little bit?
Mr. Descôteaux: Yes, of course. This happens particularly in the cultural area, in the performing arts. I will give you the example of the Montreal Jazz Festival, sponsored by La Presse; I would say that 95 per cent of the festival's advertizing budget in the written press goes to La Presse.
That newspaper has the exclusive interview rights to the major performers who come to Montreal in the summer. That is part of the agreement, and the other dailies have to be satisfied with covering the performances, getting a short interview with a little-known performer, pianist of jazz musician.
I believe that this violates freedom of information. It deprives readers of the other newspapers from getting this information; this is true of our paper, but also the other cultural newspapers, including those of Quebecor. But Quebecor does the same thing on its side. They have both become major empires that are so powerful that if you are not part of one or the other, you get crushed.
Quebecor strength lies in its newspapers and TVA. Gesca's power is based on La Presse, and also Radio-Canada. La Presse and Radio-Canada signed a cooperation agreement with Gesca a few years ago. It still exists in part, and it means that La Presse does a lot of things with Radio-Canada. It is understandable that La Presse decided to react and protect itself from the Quebecor group that includes Le Journal de Montréal and TVA. The result is that those that do not belong to either group have much less room to manoeuvre and get squeezed on the commercial front, in particular. It is true for Le Devoir, but it is also true for publications like Voir and similar cultural publications.
The Chairman: You are not required to make a profit; you cannot operate at a loss indefinitely, but you do not have the same obligation as newspapers in the major chains do to make substantial profits.
Mr. Descôteaux: Let us say that we are a public enterprise. We have shareholders and we have to be accountable to our shareholders.
Unlike other newspapers, all of our financial data and results are public and are published every year. Our annual shareholders meeting will be held at the end of May.
We are required to make profits in order to grow, but profit seeking is not our top priority.
Let me give you an idea of our shareholders attitude. One of our shareholders is Charles Sirois, of the Sirois family and Télésystème. He and his family invested $300 000 in Le Devoir in 1995. When I was made director, I met with him. The first thing he asked me, jokingly, was: ``When am I going to get dividends?'' Immediately he told me: ``You know that we invested to help Le Devoir.'' We signed a write-off the next day.
I would like to be in a position to pay dividends to our shareholders one day, if only to demonstrate the profitability of Le Devoir. Newspapers are businesses that can be very profitable, as you mentioned in your interim report.
Our goal is to make profits in order to grow. Unfortunately, over 90 years, years in which Le Devoir has actually managed to make a profit have been relatively rare. In the past six years, Le Devoir made a profit in three years and posted losses in three years.
The Chairman: My last question for this round is the following. A small budget of 15 million is absolutely minimal to publish a daily. However, you make do. It is impossible to do everything all at once. What do you have to forego or sacrifice, except for your salary?
Mr. Descôteaux: Indeed, we have to put up with certain conditions at Le Devoir. Everyone who works at Le Devoir accepts conditions inferior to those at other newspapers on the market. The advantage is professional independence. Employees working at Le Devoir also have a high level of job satisfaction.
Certain choices must of course be made. We have chosen to be a newspaper that focuses on specific sectors. We have developed niches. Unlike La Presse or the daily The Gazette, we do not aim to be all things for everyone. We cannot have a bridge column and still be the great political commentator.
Our niches are politics and culture. Those are the two main strengths of the newspaper. We dabble in economics, education and social affairs.
In the past few years, we have developed a strategy of investing most of our resources in enlarging our Saturday edition. We have added a number of sections to that edition. Among those editions, there is the Agenda section, a television and cultural activity schedule. There is also the Perspective section, which provides political analysis, and a lifestyle section. This strategy has produced results. Since 1998, our circulation has gone up by 16 per cent on the weekend, while circulation for all dailies has gone down.
Our goal for the next few years is to tackle the weekday edition and to have a more substantial newspaper, covering a larger number of sectors. We want to print more pages and provide articles by more journalists.
Senator Corbin: Mr. Descôteaux, in your presentation you referred to New Brunswick. You mentioned the L'Acadie nouvelle and the Irving Company. You also indicated that central to the newspaper's mission were public morality, integrity, defence of French culture in America and advancement of French-Canadian society, or Quebec society, as it is more commonly known today.
That statement leads me to the following question. Are you forgetting the rest of French Canada?
You also indicated that the perspective in Ottawa is not the same as in Fredericton when it comes to the Irving case study in New Brunswick.
You seem to be very concerned by the Irving case. Like a number of others, I share that concern. Unfortunately, when you say that the perspective in Ottawa is not the same as in Fredericton when it comes to the Irving case study, let's be clear that in Fredericton, the Irving case is not being studied; there is absolutely no interest in that, and it is being left to federal authorities to settle what is perceived as the Irving problem in New Brunswick.
Add to that the fact that the University of Moncton, which launched a huge enrolment campaign a few weeks ago, chose one of the Irving brothers as a model.
In New Brunswick, the provincial government is not in charge, the Irving company is.
So could you explain your concern about the Irving case in New Brunswick?
Mr. Descôteaux: Last fall, I attended a conference in Moncton on concentration of the press, and senator Day was there too. In the past 15 or 20 years, I have had many occasions to go to New Brunswick to attend conferences or visit family. We have very cordial relations with the people from the L'Acadie nouvelle.
What I meant about not sharing the same point of view with respect to the Irving case in Ottawa and in Fredericton, New Brunswick is this. If you look at the problem of concentration of the press nationally, the Irving stake in the media world and in all of Canada does not seem to be such a big deal. However, when you live in New Brunswick, the Irving case is a real problem. I can see that you are well aware of that.
I realize that the Government of New Brunswick wants nothing to do with it and is putting up with a difficult situation. Our friends from L'Acadie nouvelle are suffering the consequences of that. For example, they have to buy their paper from the Irving company at a not very good price.
So it is a difficult case. In my opinion, provincial authorities should do something to correct the situation. One has to acknowledge, however, that provincial governments have little power to intervene.
In Quebec, a parliamentary committee has addressed with the issue. A report was released, suggesting a certain number of interventions. Everyone found those interventions to be very watered down and modest. But in reality, the Government of Quebec, like the governments of other provinces, has no power to legislate in the area of media ownership in the province.
That is why I have come to the conclusion that the Competition Bureau could intervene in this case. Allow me to add a brief comment in response to a question from the chair. I remember hearing the former head of the Competition Bureau mention that this was an avenue that could be explored.
I would like to answer your question about defending French culture and French Canadian society. Defending French Canadians, wherever they may be, is part of the history of Le Devoir.
In New Brunswick, in the history books, I have seen photos of Henri Bourrassa going by train, accompanied by delegations, to meet with the Acadians in the 30s and 40s.
This concern of francophone minorities in the other provinces has always been a part of our tradition at Le Devoir.
I have to say, to my great shame, that we are probably the only newspaper that takes any interest in this, because history having evolved, on in defending French Canadian society, or Quebec society, has become the main concern and you know how things have changed. In the major debates about French schools, the future of minorities and standing for our rights, we have always tried to be active.
Senator Corbin: Would you still describe your newspaper as a newspaper for intellectuals?
Mr. Descôteaux: In fact, we want to be a quality newspaper. anglophones talk about a ``quality paper.'' Obviously, we reach a certain class of people. The latest survey shows that 60 or 65 per cent of our readers have a university degree. So they are quality readers and if they been through university, they have higher incomes. We are very different from the Journal de Montréal. We make no secret of that. We do not go after the same readership. A large number of our readers are intellectuals, yes, but the changes that we have made in the past ten years or so, were intended to make the newspaper more accessible, less restricted to intellectuals, easier to read and more in tune with the concerns of people's daily lives.
Senator Corbin: You have a columnist by the name of Paul Cauchon.
Mr. Descôteaux: Yes.
Senator Corbin: I read his column yesterday where he mentions mega control of Quebecor, et cetera. He referred to our interim report. He said that the report contained no recommendation. The intent of the committee was not to make recommendations at this stage. We have a lot of work to do yet before reaching that stage.
However, I much appreciated the irony — to call things by their name — when he mentioned the matter of Quebecor's assets. Basically, I think he is quite right and you have repeated his concerns here. How does one get out of such a situation? Should we get out of it or should we just let things go? I find it is clear — and like everyone else I am probably prejudiced to a certain extent — that today's press magnates are there first and foremost to make money. The more you control, the bigger the profits will probably be. At least one group has an avowed political agenda that you can find in the newspapers it controls. Enough said. The group is based in Winnipeg but shall remain nameless and I will not say anything about its political agenda. Are public opinion and the population being well served when the objective is to make always more money while cutting down on information? A lot of staff has been let go, whether journalists or editorialists. The independence of associated newspapers has been reined in, et cetera. Does this trend not worry you?
Mr. Descôteaux: Of course. There is a very high level of concern. Journalists in Quebec's information industry are concerned. These matters come up regularly when journalists hold a congress or panels or debates. Contrary to ordinary business, the press has a dual mission: social and commercial. A newspaper will be able to produce quality products if it makes profits and that is well accepted. What matters is the balance between the two and that balance is not always respected. I do not think that we can undo what exists today. You certainly remember the Kent commission report that was followed by a bill introduced in 1983 to which there was never any follow-up because the newspaper owners spoke out against it. I do not see how, today, we could undo the Quebecor, Gesca or CanWest empires or force CanWest to sell the newspapers it bought from Conrad Black. It would be a bit unrealistic.
However, we know that changes can occur. Back when Conrad Black owned over 40 per cent of all newspapers in Canada, representing almost half of what was published, it was quite a scandal and everyone found it terrible. No one saw any opportunity for change. One fine day, he had to sell his newspapers. Today, there is less concentration than there was then. It would be desirable to have regulatory mechanisms that could come into play when Can West decides — for their own reasons which will probably be financial — to get rid of a certain number of those newspapers, when Quebecor decides to sell the Sun media newspapers it owns, when La Presse — for reasons of diversification — decides to get rid of its newspapers. We will have to make sure that those who want to buy them will be able to enjoy a certain number of rules known to all. Some years ago, when the Winnipeg Free Press was sold together with the other Thompson group's newspapers, a group of Winnipeg citizens wanted to buy the Winnipeg Free Press. They wanted to buy that newspaper which was a good one and keep it as a quality newspaper. I do not really know what happened, but I understand that it was not possible for them to purchase it. There were favourable circumstances. The Thompson Group wanted to dispose of it. It could very well be that tomorrow morning, newspapers from the CanWest, Irving or other groups might be put up for sale and that is when we should avail ourselves of the opportunity.
Meanwhile, the owners should be made aware of their social mission and should be made to understand, through political pressure, that they also have not only commercial but also social obligations to their readership to whom they should provide quality information. I will give you the example of Quebecor where the commercial concern is very strong. More specifically, when Mr. Péladeau senior was in charge, he compensated by giving visible support to Le Devoir which was much appreciated at that time and that allowed us to overcome major difficulties. In his case, that was a way to discharge his social duties and we have always had commercial ties with Quebecor. Quebecor does our printing and distribution and we pay cash on the barrel head for the services. The major owners have to understand that they too have that social duty that can be discharged in various ways. When I mentioned setting up a fund to support the independent press, that could be one way for those major groups to discharge their moral responsibilities.
The Chairman: How do you see that fund working? You mentioned postal subsidies for magazines and newspapers. Could it be an automatic subsidy of X per cent when certain criteria are met as is the case for postal subsidies? Or are you more of the view that the Council for the arts should grant bursaries to those who deserve them?
Mr. Descôteaux: Personally, I would prefer the Council for the arts model. You would need an independent organization at arm's length from governments, made up of people from the communications sector. They would simply review the requests made by the newspapers.
The mission of that organization would be to support existing newspapers, to help set up new press enterprises or, as the case may be, help those who might want to buy a newspaper. I think we have to create a structure which is flexible, simple to operate but especially at arm's length from governments.
The Chairman: Back to the question of the independence of newspaper publishers, a question which often comes back during our hearings. The status of The Observer in England was mentioned and others mentioned you. But how does one establish an independent status for the director, the publisher or the editor of a newspaper without infringing on property rights? For example, should we go with the idea suggested a few years ago about contracts for editors of newspapers which are not already independent like Le Devoir? How can one establish an independent status?
Mr. Descôteaux: The Kent commission had come up with a rather elaborate proposal. It is interesting, but in practice it would rather difficult to implement. I do not really see how the contract formula could ensure the total independence of an editor over the contents of a newspaper.
Maybe that for a certain period everything will go fine insofar as there is a commonality of views between the editor of the newspaper and its owner. In principle, the owner of the newspaper will choose a qualified and competent editor who shares his personal views.
You could have a conflict similar to the one that happened at the Ottawa Citizen and its editor. You could wind up in an adversarial situation where the newspaper owner says: Here is your cheque, your contract has two years left on it, here are the two years, thank you and goodbye.
I think that there should be different ways to protect that independence. For example, if it is to be the responsibility of the journalists, one of the ways is to include provisions in the collective agreement ensuring respect for professional freedom and independence.
That is one way of doing it and with our newspaper, the collective agreement has a chapter about the public's right to be informed. Mechanisms have been set up to deal with cases where a journalist may think his articles are being censured. There is an internal appeal mechanism that allows the matter to be debated. That is one way of doing it.
I do not think there are really any other solutions, other than allowing competition to have free reign. The fact that there is a newspaper such as Le Devoir in Montreal influences the way newspapers deal with information. If there were only the Journal de Montréal and La Presse, would La Presse be more like the Journal de Montréal or vice-versa? The presence of a third newspaper such as Le Devoir improves the quality of the news, and forces the two other newspapers deal with subjects they would not deal with normally.
This is how diversity has a positive effect on competition. Having as many newspapers as possible available on different markets is probably the most effective way to do this. Of course, we must not be content with just one newspaper only, even in small markets. There are small newspapers, even in small markets, that provide information to the community and allow for greater circulation of information as well as diversity.
Senator Corbin: You mentioned a report of the National Assembly of Quebec on these issues. When was it published?
Mr. Descôteaux: The commission met during 2000-2001 and the report was published in 2002.
Senator Corbin: Was it the Armande Saint-Jean commission?
Mr. Descôteaux: No, it was the National Assembly's Commission on Culture and Communications.
Senator Corbin: Would it be possible to obtain this document?
The Chairman: Absolutely.
Senator Corbin: Thank you.
[English]
Senator Graham: I believe that you mentioned that you were one of five independent newspapers left. Is that in French Canada or in Canada as a whole?
[Translation]
Mr. Descôteaux: Throughout Canada.
[English]
Senator Graham: That is across Canada. Would that include, in my province, The Chronicle-Herald, in Halifax, as one of the five?
[Translation]
Mr. Descôteaux: I do not know the names of the other newspapers. I checked this last year with the Canadian Daily Newspaper Association.
[English]
Senator Graham: For the record, the newspaper in Halifax is The Chronicle-Herald. While many efforts have been made to purchase The Chronicle-Herald, the owner, the Dennis family, has resisted selling.
I have one general question. One of our witnesses suggested that journalists in Quebec today are influenced by practices in North America, and that previous generations of Quebec journalists were influenced by practices in France. Do you have a view on that?
Given your extensive experience, are you able to highlight any differences between journalism in English Canada and French Canada?
[Translation]
Mr. Descôteaux: I fail to see major differences between the way journalism is practised in Quebec and in the other provinces of Canada. Essentially, we all have the same practices aside from a few differences. Editorials are signed in Quebec whereas they are not signed in English-language newspapers published elsewhere in Canada. Our way of working and our concerns are pretty much the same. We often see our role as that of watchdog of the public interest versus governments and large corporations. Many journalists in Canada and in Quebec engage in investigative journalism.
We are very much influenced by the way things are done in the United States. Quebec newspapers are slightly influenced by Europe and France, and Canadian newspapers are probably somewhat influenced by newspapers in Great Britain. Essentially, our way of doing things is typically North American. Journalism is of the same quality in English Canada as it is in Quebec.
Senator Corbin: I have one last question. How does one become CEO of Le Devoir? Did Henri Bourassa establish a process?
Mr. Descôteaux: The process is simple. When a CEO resigns, the five-member board of directors, as well as the three-member first trust, meet to appoint a CEO. For my appointment, the same process used in any other business was used: a headhunter was hired. He went over several nominations and came up with a short list of two or three nominees.
Senator Corbin: Were there candidates from within the organization and from the outside?
Mr. Descôteaux: Yes. Each candidate was interviewed. In the end, the CEO is simply appointed by the group. Traditionally, up until 1990, the editor-in-chief would replace the CEO of the newspaper. Thus, George Pelletier, editor-in-chief under Henri Bourassa, succeeded him.
It was only later that the firm began looking for candidates externally. Gérard Filion was a union activist, Claude Ryan was secretary of the Action catholique, Jean-Louis Roy was a university professor. Lise Bissonnette was the first journalist to have been trained at Le Devoir who became CEO.
We have now established a tradition of choosing CEOs who are journalists rather than people from the outside. It is a good thing, because journalists understand the business and its practices. However, one also has to make sure that people are properly trained within the newspaper, in order to make sure these people can take over, and that they will one day be able to manage the newspaper.
The Chairman: For one last time, I would like to come back to my question on independence. I am referring strictly to journalism, and not to the other responsibilities a CEO of Le Devoir may have. For very important issues, and I will take the most obvious example, the decision the newspaper made many years ago to support the sovereigntist cause, and, later on, the decision to no longer support this cause; do you alone make the decision, behind the closed doors of your office? Do you decide on your own that the papers's position will be such and such, or are you accountable to someone else?
Mr. Descôteaux: You describe the situation well. In the end, I go into my office and close the door behind me and make a decision. For instance, take the last Quebec election. We worked as an editorial team. Throughout the entire election campaign we analyzed, voiced opinions on various policies and studied the government's record. After that, we had to take up a position. We held debates within the editorial team, but in the end, I was the one who wrote and signed the editorial. I locked myself in my office. I thought, I analyzed and weighed the different aspects of the situation before taking what became a very moderate position, along the lines of: ``Yes, we must support the Parti Québécois, but for lack of a better option,'' because I had a lot of reservations. Decisions were important, but I chose the Parti Québécois because of its position on social policies, in particular, as compared to that of the Liberal Party. Nonetheless, I had reservations and I voiced them. The following day I received a certain number of phone calls, e- mails from Péquistes who were disappointed that I did not give them unconditional support. But in my soul and conscience, I could not do otherwise. Tomorrow morning, I would write the exact same thing with the same reservations.
You raised the issue of independence. I have always said that today, if there were a referendum, with essentially the same conditions which prevailed in 1995, which were basically that English Canada was doing nothing to meet Quebec's demands, it seems to me that this would be the only possible avenue. Ms. Bissonnette, who was then CEO, recommended a yes vote in the referendum.
The Chairman: I am not talking about your decisions, but about the process. For example, do you consult the trustees?
Mr. Descôteaux: No.
The Chairman: Do you tell them of your decision before publication?
Mr. Descôteaux: Absolutely not.
The Chairman: You treat them as though they were any other reader?
Mr. Descôteaux: They are truly treated just like any other reader. The board of directors is made up of people of very different political opinions, very diverse professional backgrounds. If we have to take a position on an economic issue on which I feel I do not have all the required expertise, and I know that one of my board members does, I will refrain from calling that person for advice, an explanation or a piece of information. I will find someone else to call, to make sure that these people are kept at arm's length. Never have I felt that the trustees criticized me or my predecessor on editorial positions, even during the referendum.
I know that some trustees must have choked on their coffee the morning Ms. Bissonnette recommended voting yes. However, that is the tradition, and they accept it very well. They knew what Ms. Bissonnette's views were before appointing her to her position.
We have discussions. When I was appointed, there were some very detailed interviews during which we discussed the future of the newspaper, my view about what we should do to guarantee its survival, my political opinions, and so on. They made their choice knowing what type of person I was, what type of person Ms. Bissonnette was, and before her, the other directors. That is part of this well-accepted tradition. The interesting thing is that the trustees are — and I apologize for the irony — somewhat like our senators.
They are people who have been around for a long time, who are familiar with the company's traditions, its culture and the major issues of Quebec society. They bring some wisdom to their decision-making. There is a tradition that is being passed on. For example, the first trustee has held the position for at least 25 years, the second for about 15 years and a third has just been appointed. The most recent appointee is Claude Corbo, the former rector of the University of Quebec in Montreal. The other is Jean-Guy Paquette, the president of the National Optics Institute in Quebec City, and the former rector of Laval University. We also have Denis Pelletier, a notary who has been involved with Le Devoir for 30 years. He is the nephew of Georges Pelletier, who was one of the former managers of the newspaper. Thus all that is very well accepted.
They got involved in 1993 when we made some changes to the structure of the newspaper. They wanted to ensure that Henri Bourassa's objectives would be respected. Together, we found the solutions required and they agreed to the important changes, namely transferring the ownership of the newspaper to Le Devoir Inc., a new company with new shareholders. They agreed to that, while ensuring compliance with the spirit of Henri Bourassa's wishes regarding the independence of the newspaper. This worked out very well.
The Chairman: We would like to thank you very much. I would ask you to please send us a copy of the collective agreement on the status of journalists and your latest financial reports. Is there any statement that Henri Bourassa made — it would not exactly be his will — but some document that would explain the guiding principles of Le Devoir?
Mr. Descôteaux: There is a series of documents which are notarial acts in trust — they are not wills — which are quite complex legal documents.
The Chairman: I was thinking rather of a simplified version of that.
Mr. Descôteaux: I could find you some documents that have been written over the years that might give you some information about the newspaper's by-laws.
The Chairman: That would be very good of you. We would appreciate that. Thank you very much.
[English]
Senators, our next meeting will be on Thursday, April 29, at 10:45 in room 160-S of the Centre Block. We will study Senator Oliver's Bill S-2, to prevent unsolicited messages on the Internet, which was referred to this committee by the Senate.
[Translation]
Senator Corbin: Why are we dropping our study on the media to deal with a private bill?
The Chairman: We are not dropping it, we are suspending it.
Senator Corbin: Why are we suspending our work?
The Chairman: Because we now have two references from the Senate.
Senator Corbin: Which has priority? I know that government legislation has top priority, but does a private senator's bill force us to put aside our study on the media?
[English]
Are we compelled?
[Translation]
The Chairman: It does not force us to do so. The steering committee decided to do that; however, we are not stopping our study, I can assure you of that.
Senator Corbin: You tell us the steering committee decided that and you announce it to us at the end of the meeting. You are getting us involved in a study that will take a great deal of time. I am very much afraid that we may be dealing with two studies that will go on for a very long time. The question of spam is not an easy one. Do you see the light at the end of the tunnel for that study?
The Chairman: Do you mean this one?
Senator Corbin: No, the other one. If you do not see any light at the end of the tunnel, I think we should set that study aside and continue with this one. That is my opinion. I trust the steering committee, but I do not have to agree with you. We need to think about this. We are going to have two studies that are going to go on for a very long time. I would like us to complete one before beginning the other.
The Chairman: I think that out of courtesy to the Senate, which did send us this bill, we must at least begin the study. I assure you, Senator Corbin, that we will not forget our study on the media. On the contrary!
Senator Corbin: Thank you.
The committe adjourned.