Question Period Note: Canada Periodical Fund

In the context of the COVID-19 crisis, the Government announced, on March 25, 2020, a simplified process for processing the files submitted through the Canada Periodical Fund (CPF) to accelerate the attribution of funds awarded to recipients.
The modernization of the CPF will be implemented April 1, 2021, to allow for an orderly transition. In the meantime, the CPF will continue to apply the existing criteria on a status-quo basis in 2020-2021.

• In the context of the COVID-19 crisis, the Government of Canada accelerated the processing of files submitted through the Canada Periodical Fund for the 2020-21 fiscal year.
• Furthermore, as part of Phase 1 of the Emergency Support Fund, the Government has also provided a 25% top-up to existing magazine and community newspaper clients, and in Phase 2 will support free, digital and small-circulation periodicals.
• The Government of Canada recognizes the importance of fostering strong and dynamic magazine and community newspaper sectors that meet the evolving needs of readers.

• The Canada Periodical Fund (CPF) provides financial assistance to Canadian print magazines, non-daily newspapers and digital periodicals to enable them to overcome market disadvantages and continue to provide Canadian readers with the content they choose to read.
• The program has three components: Aid to Publishers, Business Innovation and Collective Initiatives. The bulk of funding is distributed through the Aid to Publishers component, which uses a funding formula based on the number of copies sold and gives publishers the flexibility to spend funds as they see fit.
• Funding amounts change from year to year, based on circulation and other factors. In 2019-2020, the Aid to Publishers component of the CPF provided funding to 729 periodicals (403 magazines and 326 community newspapers), including:
o 17 Indigenous periodicals (published in 10 Indigenous languages);
o 73 ethno cultural periodicals (published in 35 foreign languages); and
o 22 official language minority community periodicals.
• The Business Innovation component of the CPF provides financial support to eligible small and mid-sized printed magazine and digital periodical publishers. It encourages innovation to adapt to changing market conditions and contributes to the diversity of content sought by Canadian readers. In 2018–19, this component provided funding to 88 projects, including 14 ethno cultural publications, 17 export projects, and 8 digital startup publications. Projects supported may include the adoption or use of new media, mobile applications, advertising and promotional campaigns, web design and development, and expansion into new markets.
• It should be noted that the revenues of several periodicals have decreased significantly over the last few years due in part to a reduction in the placement of advertisements.
• In February 2020, the Government announced that the modernization of the CPF would be implemented
April 1, 2021, to become platform neutral and reward investment in editorial content.
• In 2020–21, the formula-based Aid to Publisher component and the Business Innovation component will remain the same while the Government continues to support publishers with the upcoming transition.
• In subsequent years, starting in 2021–22, the funding provided will gradually shift from rewarding print circulation to rewarding investment in editorial and journalistic content and reaching readers, regardless of the distribution channel.
• Because more and more readers continue to consume content in a digital format, a new sub-component of the ATP will be created to fund qualified publishers who distribute digital-only content with no other associated print products.
• The new ATP formula will be fully implemented in 2025-26. The modernization of the BI component will include broadening its types of eligible periodicals and a $1-million increase in its budget as of 2021–22.
Impact of COVID-19 Pandemic on the Magazine and Community Newspaper Industries
• Canadian magazines and newspapers have added financial pressures due to the COVID-19 pandemic. The closure of retail outlets, most notably Chapters Indigo, has affected newsstand sales. Many community papers have stopped printing and delivering their print copies, while some have closed operations completely. Advertising, a major source of revenue for both industries s has also dropped dramatically and will likely remain low due to the economic downturn from the pandemic.
• In the context of the COVID-19 crisis, the Government announced on March 25, 2020, that the processing of files for 2020-21 would be done in an accelerated mode and that current eligible publishers would receive the same amount as in 2019-20.
• To provide further support to the periodical industries during the pandemic, on May 8, the Government announced Phase 1 of the Emergency Support Fund, which included a one-time 25% top-up to existing magazine and community newspaper clients of the Aid to Publishers component of the CPF.
• On July 7, 2020, Special Measures for Journalism, part of Phase 2, was announced. This one-time initiative provides support in 2020-21, to digital, small circulation and free magazine and community newspaper clients not currently receiving funding.

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