Question Period Note: Canadian Media and Local Broadcasting

On August 26, 2020, the Canadian Association of Broadcasters (CAB) released a consultant’s report called “The Crisis in Canadian Media and the Future of Local Broadcasting”. The report highlights structural issues in the system that have been emphasized by the effects of COVID-19. It is estimated that there will be a decline in advertising revenue for private radio and TV stations of $1.065 billion total in the three broadcast years 2020, 2021 and 2022. The authors of the report call on the Government to provide additional
COVID-19 relief to local stations.

• The Government recognizes the critical role of Canada’s news and media organizations in helping Canadians stay informed about COVID-19 and in delivering high-quality local news.
• That is why, as part of a $500-million COVID-19 emergency fund, the Government is supporting media organizations. We provided immediate financial relief, waiving more than $30 million in regulatory fees and up to $25 million will be made available through partners to support smaller, independent broadcasters that invest in news.
• The Government is also taking a number of actions to create a fairer playing field between Canadian companies and
foreign-based digital platforms. This is why we intend to introduce legislation to ensure that all players make meaningful and proportional contributions to Canadian content.

• The Canadian Association of Broadcasters (CAB) is the national voice of Canada’s private broadcasters, representing the vast majority of Canadian programming services, including private radio and television stations, networks, specialty, pay and pay-per-view services. The goal of the CAB is to represent and advance the interests of Canada’s private broadcasters in the social, cultural and economic fabric of the country.
• The report released on August 26, 2020, projects that in the next three years between 2020 and 2022, local television and radio broadcasters will face a revenue shortfall totaling $1.06 billion. It argues that, of Canada’s 737 total private radio stations in Canada, as many as 50 could go silent over the next four to six months, and that a further 100 to 150 stations could turn off their mics over the next year and a half, leading to as many as 2,000 job losses. The most vulnerable operations are AM radio stations as well as independent and other private radio and TV stations in smaller markets across Canada.
• Advertising, which is the main source of revenue for conventional TV (i.e., over-the-air broadcasters such as Global, CTV and TVA), is being threatened in the short term by the pandemic and in the long term by the shift in advertising spending to other platforms. 40 percent of local radio stations and 70 percent of TV stations had negative PBIT in the past year, and this negative profitability seems to be worse in more rural areas.
• The authors of the report call on the Government to provide additional COVID19 relief to local stations; provide relief from certain regulatory and/or license obligations (e.g., related to Canadian Programming Expenditures); and, conduct a holistic review of the system and determine the best mix of policies and structures that would support them.
• CAB has indicated that it agrees with the report’s findings and endorses the call for action, which should be considered in addition to any other requests.
• It is important to note that the CRTC is an independent organization, which is responsible for its day-to-day activities, including carrying out processes to issue broadcast licenses.
• Canadians rely on radio and television to stay up to date on matters related to COVID-19. Canadian broadcasters have been working around the clock to deliver news and information programming, while facing operational challenges and significant declines in advertising revenue.
• Regarding governmental measures for those affected by COVID-19, financial support mechanisms for businesses, Canadian media and local broadcasting have been provided through several means. On
March 30, 2020, the CRTC decided not to issue letters requesting payment for Part I licence fees by broadcasters for the 2020–21 fiscal year. The Government will transfer necessary funds to the CRTC to support its operations. Waiving these regulatory charges for broadcasters provided immediate financial relief for the broadcasting industry, freeing up more than $30 million in cash.
• On May 8, 2020, the Minister of Canadian Heritage announced the details of a new COVID-19 Emergency Support Fund for Cultural, Heritage and Sport Organizations. The $500-million Emergency Support Fund provides additional temporary relief to support cultural, heritage and sport organizations and help them plan for the future.
• On July 7, 2020, the final components of Phase 2 were announced. The second component of Phase 2 emergency support will be provided through grants and contributions, with specific support of $25 million distributed through partners to help independent broadcasters that invest in news and community broadcasts.
• On May 15, 2020, the Government of Canada also announced the Canada Emergency Wage Subsidy (CEWS) to help businesses keep their employees on the payroll and encourage employers to rehire workers previously laid off, and better position businesses to bounce back following the crisis. The CEWS was extended until August 29, 2020. Since its introduction, the wage subsidy has helped nearly two million Canadians keep or return to their jobs.
• The Government continues to assess and respond to the impact of COVID-19, and stands ready to take additional actions as needed to stabilize the economy and mitigate the impacts of the pandemic.

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