Pandemic has accelerated structural decline and ideas abound, but government has not responded
OTTAWA — The Canadian Association of Broadcasters (CAB) today released an economic study by media economist Communications Management Inc. (CMI) which projects the possible closure of up to 40 local TV stations and 200 radio stations within the next three years.
According to CMI’s The Crisis in Canadian Media and the Future of Local Broadcasting report, within four to six months up to 50 radio stations could close, with an additional 100-150 radio stations possibly shutting down during the next six to 18 months. In addition, CMI projects the possible closure of 40 or more of Canada’s 94 private local TV stations in the next 12 to 36 months.
Today’s news release from the CAB says the most vulnerable broadcasters are AM stations as well as independent and other private radio and TV stations in smaller markets across Canada.
“Canadian private television and radio is in crisis,” said Lenore Gibson, CAB board chair, in the release. “Without immediate action, Canada will see a wave of local television and radio closures over the next three years. This will deny many communities a daily local media voice, and significantly reduce the diversity of news choices and voices in almost every community in Canada.”
Over the last 15 years, “structural changes in the advertising market and the inequitable taxation and regulatory treatment of foreign-owned online media giants,” has led to the financial crisis facing private local TV and radio stations, which rely on advertising revenue, says the CAB release. The economic shutdown caused by the Covid-19 pandemic has accelerated the financial erosion of the local broadcasting industry, says the CAB.
Canada’s local private broadcasters now face a projected advertising revenue shortfall of more than $1 billion in the three years between 2020 and 2022, according to the CMI report.
In addition, the continued reduction of resources for local news means more job losses for local journalists and newsgatherers. In private radio, station closures could lead to an estimated 2,000 job losses, which represents 24% of 2019 employment levels in private radio, according to the CMI report. Employment levels in private conventional TV have been on a downward trend for several years — total employee numbers for private TV peaked in 2011 at 8,307, but fell to 4,779 in 2019, a decline of more than 40%, notes the report.
“For generations, local news and journalism have been critical to keeping Canadians informed about the issues that are important to them such as holding governments to account and providing oversight of taxpayer dollars,” said Carmela Laurignano, vice-president and radio group manager at radio broadcaster Evanov Communications, in the CAB release. “If we allow local news to die, the health of Canadian society will be seriously undermined.”
“Private broadcasters are doing everything possible to avoid major cuts or reductions in local news coverage,” added Robert Ranger, president and CEO of Quebec broadcaster RNC Media. “This would be a last resort. We don’t want to deny communities in Quebec or across the country their choice of daily local media — media that remain critical pillars to our democracy and shared culture.”
Calling the CMI report “grim”, Canadian union Unifor issued its own news release this morning. “The Covid-recession is poised to kill off more media jobs at TV and radio stations, and it’s time for urgent action by the federal government, which we have been saying for years… Covid has sped up the unravelling of media’s business model, thanks to Google and Facebook sucking ad dollars out of Canada,” said Unifor national president Jerry Dias. Unifor represents thousands of media workers in Canada.
“Private broadcasters are doing everything possible to avoid major cuts or reductions in local news coverage.” – Robert Ranger, RNC Media
Dias is calling for the federal government to deliver short-term financial relief and long-term solutions to help Canadian media outlets facing the erosion of advertising revenues that fund local journalism.
“The place to start for the federal government is by implementing the recommendations of the report of the Broadcasting and Telecommunications Legislative Reform committee tabled last January,” said Dias. (Among the recommendations in the report is one that would require companies such as Netflix to invest in Canadian content, notes the Unifor release.)
When asked for comment, Heritage Minister Steven Guilbeault responded to Cartt.ca in an emailed statement through a spokesperson which reads:
“Canadian broadcasters have been working around the clock to deliver news and information programming, while facing operational and financial challenges due to Covid-19. We recognize the essential role they play all year-long to keep our communities informed.
“That is why we acted and decided to provide independent news and community radio broadcasters with a $25 million emergency funding as part of our sector-wide Canadian Heritage Covid-19 emergency response. Additional funds were also made available for organizations who do not usually benefit from our existing programs, like independent broadcasters and producers of content in a language other than English or French,” the statement continues.
“Earlier this year, we have requested that the Canadian Radio-television and Telecommunications Commission (CRTC) waive Part I licence fees by broadcasters for the 2020–21 fiscal year, freeing up more than $30 million in cash.
“These measures complement already-existing, government-wide, emergency assistance programs, like the Canadian Emergency Wage Subsidy that is currently helping eligible broadcasters maintain more jobs in their structure, as we are working with all sectors towards restarting our economy.
“We believe that a stronger, more competitive broadcasting system is essential to protect our communities, strengthen our sense of belonging and promote economic growth. That is why we are currently working towards modernizing the Broadcasting Act. More information will be shared in due course in this regard.”
Broadcasters have told Cartt.ca while they are thankful for the federal government programs which have helped them (and all businesses) through the pandemic so far, programs like CEWS will be shut down, and the systemic issues and revenue decreases will remain – and they can’t wait for new legislation to be passed (from which new regulations will have to be interpreted, which could easily take until the end of 2022, if not longer).
Canadian broadcasters have asked for more and quicker action on several fronts, noting $25 million in emergency funding doesn’t go very far when spread across many broadcasters and relieving them of CRTC Part II licence fees (which totalled over $116 million last year) would be far more helpful, among many other ideas. The federal government has not responded to these specific ideas beyond bland emailed statements that really don’t say anything at all – just like the one you see above.
As well, On July 13, 2020, the CAB filed an application with the CRTC for emergency regulatory relief for the broadcast year ending August 31, 2020. To help avoid station closures, Canada’s private broadcasters are calling for short-term regulatory relief and new government measures to create a more fair and sustainable future for local broadcasting. The CRTC has yet to respond to this application or post it on its web site for consideration.
