Hon. Sinclair Stevens (York-Peel) moved:
That a special committee of the House be established to consider what action has been taken by the government and former governments with respect to the recommendations of the Royal Commission on Newspapers (1981), and that the committee be empowered to consider which of the recommendations should be implemented and, in particular, the recommendations made by the Commission with reference to Thomson Newspapers Limited.
He said: Mr. Speaker, since there might be those in the House who are perhaps unfamiliar with the Royal Commission on Newspapers which brought in its report on July 1, 1981, I felt I should begin my remarks by reminding Hon. Members that this was a commission on which Tom Kent was chairperson, Gordon Spears was a commissioner, as was Laurent Picard. If I could summarize it briefly, the thrust of the commission report was that it was felt that there was an undue concentration of newspapers in the country and that perhaps this resulted in a less than favourable freedom of the press. There were certain questions raised about ownership of not only newspapers as far as chains were concerned but the fact that certain instances were cited wherein chain ownerships were also linked to conglomerates.
Based on that type of analysis, the report came up with various recommendations which I hope to deal with today. Even if one does not believe in all the recommendations-and certainly I do not believe in them all-or if one believes in none of them or, in fact, if one believes only in some of them, it is important that we as legislators, and the most senior House in the country, at least consider the evidence and the information that this commission put before the country linked, if you like, Mr. Speaker, with its recommendations.
One other matter which I should perhaps clarify is that the actual report was triggered by the closing down The Winnipeg Tribune and The Ottawa Journal. In the forward to the report it is stated:
The Winnipeg Tribune and The Ottawa Journal closed their doors on August 27, 1980. This commission in direct response to that event was created six days later.
In short, it was conceded that there was a certain anxiety at the time that an already concentrated situation was perhaps becoming that much more concentrated.
In a map that the commission includes on page 10 of its report it points out that chains at that time controlled 94.6 per cent of the total circulation in British Columbia; 96.2 per cent in Alberta; 100 per cent in Saskatchewan; 87.1 per cent in Manitoba; 60.6 per cent in Ontario; 95.9 per cent in Quebec; and throughout the Maritimes it was generally the same,
although Nova Scotia was just 26.6 per cent controlled by chains. I think that a compelling case is made in the report which demonstrates the concentration that existed as far as chains in the daily newspaper field were concerned.
What I mainly want to deal with today is what happened after the report. Were any of the recommendations implemented? To the best of my knowledge, none were implemented. I will come back to one instance wherein there was temporary implementation of one, only to be withdrawn later. Also, was there ever any further study given to the questions that were raised in the report?
First, I would like to touch on what some of these recommendations were all about. On page 237 the commission had this comment to make:
The ownership and control of most newspapers is today highly concentrated under interests whose business concerns extend far beyond the particular newspaper. Much of our press, consequently, is not itself dedicated exclusively to the purposes of the press, to the discharge of its public responsibility. Extraneous interests, operating internally, are the chains that today limit the freedom of the press.
The chain you will note, Mr. Speaker, that is referred to there is the chain in a binding sense. That is what the commission stated is limiting the freedom of the press.
In answer, then, what can be done about it? It suggests, for example, that there is room for a Canada newspaper Act and that it would provide for a resistance at least to a further concentration of newspaper power in the country.
Many of the recommendations, and I should be frank about this, I feel contemplate the possibility at least of undue government intervention. The commission tried to be very guarded in its comments that that was not its intention. Anything that we say today I think we should weigh in the context that I am certainly not speaking for direct government intervention. I am speaking in the context of asking this. Is there not something worth considering in what the royal commission reported on back in 1981 and, specifically, what has happened?
The only instance that I know of anything coming out of this study was a directive which was given to the CRTC by the Government of the day asking that it refrain from granting TV licences or radio licences in communities where the applicant was, for example, the local daily newspaper. I do not know whether that directive was ever acted upon by the CRTC. It was subsequently withdrawn. To the best of my knowledge there has been no direct implementation of these recommendations.
Let me first deal with the suggestion of the Canada newspaper Act. The report states that while the local monopoly of a newspaper is a problem in itself, often reflected in profit maximization by an impoverishment of editorial comment, the worst feature of concentration is not the ownership of several newspapers by one company, it is their ownership by a conglomerate, a company having or associated with extensive
September 20, 1988
other interests. As an example of this type of conglomerate Thomson Newspapers is cited.
I think most Elon. Members are familiar with the Thomson empire. For those who are not, I recommend that they take a look at the 1988 summer issue of The Financial Post wherein the trees of various conglomerates of Canada are shown. Under the title: "Ken Thomson-Read all about him" the various concerns that Lord Thomson controls are listed. Of course that includes Thomson Newspapers which is 61 per cent owned by a private company owned by the Thomsons; 74 per cent of Hudson's Bay; 100 per cent of The Bay, 100 per cent of Simpsons; 100 per cent of Zeller's; and 100 per cent of a real estate company called Markborough Properties. On the international Thomson organization side there are various other interests such as oil and gas and book publishing and that type of thing.
I would simply like to summarize the Thomson situation as one in which when the royal commission looked at the situation it found that Thomson had 40 newspapers in Canada. That is the same number that it has today. I am referring to daily newspapers here. The Globe and Mail is of course one of the newspapers that it has. Its growth since the 1981 report has been mainly in the United States. When I speak of growth, it is truly sensational.
The Thomson organization-and when I refer to these figures I am referring to Thomson Newspapers Limited-are running at roughly a 40 per cent pre-tax profit margin on revenues. In smaller communities it is even higher than that. The net result is that in 1987, on earnings of $1.95 billion it was able to have a net pre-tax income of $379 million. Royal Securities, RBC Dominion Securities, has indicated that it believes that profit will get up to over $.5 billion by 1990.
Let us make one thing clear. There is nothing wrong with a business concern making a profit. The bottom line is what insures the solvency and the continual prosperity of that organization. What we have to ask ourselves is whether the tremendous concentration that Thomson is showing in a business sense of developing what it calls "cash cows" is in the best interests of a free responsible press in this country.
The formula is very simple. If one maximizes revenue and minimizes costs, the net result is editorial staffs are shortchanged as far as remuneration is concerned. As a result of the underpaying of many of the personnel, it is very difficult for those papers in the Thomson chain to get the type of seasoned, well-educated employee that one would normally expect to handle what is one of the crucial jobs in any democracy, and that is the reporting of the news.
I am not talking about so-called interpretive reporting. I would suggest that what we need, as much as anything in this country, are responsible journalists reporting what actually is the news, and hopefully conveying it through their newspapers to their reader who can judge accordingly as to what action he
or she should take on whatever topic may be relevant at the time.
I would like to touch very briefly on some of the recommendations that the commission has come up with in the context of what it feels is an over concentration. It points out there should be a divestiture of either the The Globe and Mail with Thomson retaining the other 40 newspapers that it owns, or it should retain the The Globe and Mail and sell off the other 40 newspapers. We know that has not occurred. What indeed has happened, and if you are interested, Mr. Speaker, I could give the specific profits, is that those Canadian newspapers have generated an income that, in 1980, the year that the royal commission was looking at, had Canadian revenue of $284 million. By the end of December, 1987, that had gone up to an even $.5 billion. That is a nice increase during the 1980s. As far as the income is concerned it is even more dramatic. One finds that the segmented operating income in Canada has jumped from $62 million to $157 million, as far as Thomson Newspapers is concerned.
Where was that money used? Was it used to ensure that there was a high calibre reporting staff, that the editorial content that appears in what is generally called the news hall of a newspaper was of a high calibre? No. It was substantially used to give the cash flow needed to make further acquisitions in the United States. That is where the growth has been; in short, the funelling off of those profits out of the Canadian newspaper empire, short-changing the production of the newspapers in this country, so that there could be further acquisitions made in the United States. Today the chain has 160 newspapers; 103 daily and 5 weekly newspapers are in the United States. The remaining are 40 daily in Canada, and 12 weekly newspapers.
The first comment I would make is that the Royal Commission I have referred to asked that Government consider the desirability of a divestiture of this empire. Is it worth revisiting to determine if that divestiture would have been wise? There is a five year time given for the divestiture, or has the inaction been the appropriate course to take?
I would then mention that there is a rather novel approach of a taxation nature to try to get more competition into the newspaper field in Canada. The recommendation had two parts. It was suggested that there may be room to give an added tax write-off to those who would like to invest in new newspapers, the concept being something similar to what one could obtain by going into the film business in Canada. For example, if somebody wanted to raise $1 million, the royal commission asked: "Would it be possible to give a tax credit so that somebody who is raising $1 million to get into the newspaper field in Canada would at least have that incentive?" Again there was a formula for the adjustment of taxes within a newspaper in accordance with how much editorial content was put into the newspaper and what the expenditure was in generating satisfactory editorial content in the newspaper. It was a surtax, and tax credit approach. Again, I would recommend that Hon. Members who may be interested in this
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subject take a look at the report and see the nature of that recommendation.
Another recommendation was the role of the editor in the newspaper. They suggested that if one has this highly concentrated ownership such as Southams, The Toronto Star, or the Thomsons, perhaps there had to be something done to ensure an independence at the editorial level. The suggestion was that editors-in-chief be asked to sign a contract that would be binding on the owner to ensure that he would have certain security of tenure during his employment, and that if he had to make some tough decisions that might be embarassing to the owner or somebody else connected to the newspaper, he would not feel that his job was at stake as a result of making that decision.
The commission pointed out, and perhaps I should quote page 246 which states:
Overall, the structure is most certainly not one that can give any confidence-
That is the present industry structure:
-that newspapers in Canadian communities are edited independently of the other business interests of their chain or conglomerate proprietors. The structure is, in other words, incompatible with the Canadian Daily Newspaper Publishers Association's own declaration, in its 1977 Statement of Principles on this point.
It then quotes what the Canadian Daily Newspaper Publisher's Association stated should be the principle:
The newspaper must hold itself free of any obligation save that of fidelity to the public good ... Conflicts of interest, and the appearance of conflicts of interest, must be avoided. Outside interests that could affect, or appear to affect, the newspaper's freedom to report the news impartially should be avoided.
In short, the association pinpoints what appears to be an inherent defect in the system that the commission found.
I know my time is quickly running out. I would like to simply conclude by saying that I believe Hon. Members should revisit the Royal Commission, look at the evidence that it mustered, look at the recommendations that it proposed, and ask themselves: "Are you indeed happy with the way the freedom of the press is functioning in the country at the present time, and in particular can it be bettered?" Democracy at any time needs a truly free, objective, responsible press, and that is what I am hoping measures in future will attempt to attain.
Topic: PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic: PRIVATE MEMBERS' BUSINESS-MOTIONS THE MEDIA ROYAL COMMISSION ON NEWSPAPERS (1981)