Heritage Minister Mélanie
Joly’s office confirmed to the Financial Post that the Department of Canadian
Heritage “regularly does industry-specific environmental scanning” that
includes the hypothetical scenarios that Toronto-based Postmedia Network Canada
Corp. and Torstar Corp. will cease operations.
“The way Canadians access
content is changing with new platforms and technologies,” said a
spokesperson for Joly. “The shifts that are happening as a result are
significant. One of the objectives of our Canadian content consultations is to
assess how to best support the production of news information as well as local
content that is credible and reliable.”
Spokespeople for both Postmedia
and Torstar declined to comment for this story.
The government is currently
holding cross-country consultations with industry groups as part of a sweeping
review of Canada’s $48 billion broadcasting, media and cultural
industries, the results of which could have tremendous impacts on the
struggling bottom lines of Postmedia and Torstar.
E-mails and documents obtained
under the Access to Information Act show that bureaucrats at the Department of
Heritage have been preparing assessments of markets that would lose
significant media coverage if either company were to cease publishing.
Postmedia publishes the
National Post, and is the only publisher of daily broadsheets in many of
Canada’s largest cities, including Calgary, Edmonton, Vancouver and Ottawa. It
also publishes the St. Catharines Standard, Niagara Falls Review and Welland
Tribune, and the only English-language daily broadsheet in Montreal, in
addition to dozens of community newspapers and tabloids.
Faced with a 13.7 per cent
decline in revenue, and a 21.3 per cent decline in print advertising revenue,
Postmedia reported a $99.4 million loss in the three months ending Aug.
31, significantly more than the $54.1 million in the same period the
previous year. Last month the company, which employs approximately 4,000
staff, announced it intends to cut hundreds of positions by
reducing its salary costs by 20 per cent.
Torstar publishes Canada’s
largest daily circulation newspaper, the Toronto Star, alongside other
broadsheets The Hamilton Spectator and the Waterloo Region Record, and
more than 100 community papers.
Earlier this month Torstar
reported an adjusted third-quarter loss that exceeded analyst
expectations, as its operating revenue fell 12.6 per cent to $162.1
million and its print advertising revenues fell 16.1 per cent. The company has
laid off more than 350 editorial and production staff in 2016.
Officials from both Postmedia
and Torstar have testified before the House of Commons Standing Committee
on Heritage in recent months. In both cases, the newspaper companies urged the
federal government to consider policies that could assist their
struggles as digital disruption continues to hammer their legacy
businesses, and as they explore ways to monetize their content online.
“The erosion of print revenue
has been dramatic,” Postmedia CEO Paul Godfrey told the committee in May. “The
picture is ugly and it will get uglier.” Godfrey urged the government to ramp
up federal spending on advertising in newspapers, and to provide tax incentives
for companies that do the same.
John Honderich, chair of
Torstar Corp., told the committee last month that “there is a crisis of
declining good journalism across Canada and at this point we only see the
situation getting worse.” Honderich criticized the publicly funded CBC for
competing in the digital advertising market with competing media companies who
don’t benefit from its generous public subsidy, and suggested the government
look at the British public broadcaster, which is not allowed to compete with
its domestic competitors for ad dollars.
The Heritage committee hearings
and the Department of Heritage’s Canadian content consultations are part of a
broader effort by the federal government to examine the state of the media in
Canada. The Liberals have also contracted the independent Public
Policy Forum to draft a report on the news industry that will
include policy recommendations.