By Christopher Guly
OTTAWA – Faced with an advertising market that has been cut in half in some cases, broadcasters are scrambling to survive the Covid-19 pandemic (to say nothing of the shifting media sands in general) and are seeking stronger lifelines from the federal government.
Earlier this month, during an appearance before the House of Commons Standing Committee on Finance, representatives of the Independent Broadcast Group (IBG) said while the Canada Emergency Wage Subsidy has helped keep staff on the payroll, broadcasters need further relief.
On behalf of the IBG, a consortium of 10 independent Canadian television broadcasters, Luc Perreault called for increasing the tax deduction for advertising available to them to 130%; extending the news-content tax credit for the print industry to apply to news programming by independent broadcasters; and reimbursing them for the 600-MHz transition costs they face.
“These costs,” said Perreault, a strategic advisor with IBG member Montreal-based Stingray Group and long-time Pelmorex executive, “are being incurred to free up spectrum for other uses,” such as for the mobile phone business operated by large media conglomerates that only “benefit from the transition.”
In an interview with Cartt.ca, Cal Millar, president and chief operating officer of Channel Zero, said independent broadcasters are essentially “subsidizing the wireless companies to get new frequency.”
“The Government of Canada knows that Canadian broadcasters have been working around the clock to deliver news and programming during Covid-19, while facing operational challenges and declines in advertising revenues,” said Canadian Heritage spokesperson Amélie Desmarais.
“This is why, as announced by the Minister of Canadian Heritage on March 30, the Canadian Radio-television and Telecommunications Commission has waived payments for Part 1 license fees by broadcasters for the 2020-21 fiscal year.”
That measure, she said in a statement to Cartt.ca, “provided immediate financial relief to the broadcasting industry, freeing up more than $30 million in cash.” While welcome, it’s an amount spread across all broadcasters, so the amount per broadcaster is actually quite low.
There was no mention of Part II fees, which last year were assessed at $116 million, and Millar told Cartt.ca that there have been discussions with the federal government about covering the next round.
However, Desmarais said broadcasters also have the option to apply to different government measures “intended to help hard hit businesses and organizations facing difficult times.” She listed the Emergency Business Account (CEBA) that provides interest-free, partially forgivable loans of up to $40,000 and whose eligibility criteria was expanded to include “many owner-operated small businesses.”
Also available is the Canada Emergency Wage Subsidy (CEWS) that covers 75% of wages for employees in hard-hit businesses and which runs until August 29. Desmarais noted that media organizations, not-for-profit journalism organizations and non-public training institutions are now eligible for the CEWS. Millar said his company has used CEWS and is grateful for it and this week, Corus Entertainment said it was granted $10 million in May to help cover wages in the face of large revenue shortfalls.
And there is the Canada Emergency Commercial Rent Assistance program for small businesses that provides forgivable loans to commercial property owners who in exchange are meant to lower tenant rent by 75%.
“Up to $25 million will be made available to support smaller, independent radio and television broadcasters that invest in news.” – Amélie Desmarais, Department of Canadian Heritage
“Canadian Heritage also recognizes that smaller, independent broadcasters face unique challenges,” said Desmarais, who explained that they will be able to access the $500-million Emergency Support Fund for Cultural, Heritage and Sport Organizations, which the department oversees, as part of its second phase.
While the help for broadcasters in that second phase has not yet been officially announced, “to this end, up to $25 million will be made available to support smaller, independent radio and television broadcasters that invest in news,” according to Desmarais, who said that further details would be announced in the “coming weeks.”
But neither she nor anyone in the federal departments Cartt.ca contacted addressed two additional issues Millar raised in his interview which would provide further, concrete help, for broadcasters, big or small.
He argued Canadian broadcasters should be able to tap into the lucrative pharmaceutical-advertising market and run prescription-drug commercials that air on American networks and are constantly seen by Canadian viewers anyway.
Under Canada’s Food and Drugs Act and its related regulations, “the promotion of a prescription drug to the general public is limited to name, price and quantity,” and a drug, prescription or not, “may not be advertised to the general public for the treatment, preventative or cure for any Schedule A disease,” which includes cancer, diabetes and asthma.
Cartt.ca sought comment from Health Minister Patty Hajdu or an official in her department on Millar’s interview in which he raised the ad-related idea, but did not hear back.
Millar also said the federal government should close the loophole allowing tax deductions for foreign digital advertising, which he said is resulting in “hundreds of millions of dollars bleed[ing] off to non-Canadian digital segments.”
Cartt.ca reached out to the offices of Finance Minister Bill Morneau and Innovation, Science and Industry Minister Navdeep Bains for reaction either by them or officials in their departments – and even extended the invitation for comment to Prime Minister Justin Trudeau’s office. All three redirected the request to Canadian Heritage Minister Steven Guilbeault’s office.
In the end, it was left to Desmarais to speak on the government’s behalf.
“We appreciate the input of the Independent Broadcast Group and other industry-related associations as the government continues to consider what additional steps should be taken to foster a healthy broadcasting sector moving forward.”
