“The government should make up their mind,” Mr. Godfrey told The Hill Times. “Just put us all on the same level playing field, one way or the other.”
Mr. Godfrey, who was in Ottawa on May 24 to speak at the Ottawa Mayor’s Breakfast, a gathering of Ottawa’s business leaders, said he would be meeting with some bureaucrats at Canadian Heritage to discuss the regulations, which he said he believes worked 15 years ago, but are hurting newspapers today, rather than protecting them.
Private companies in Canada, including newspapers, must be 75 per cent Canadian-owned, otherwise those who advertise with the newspaper cannot deduct it as a business expense, which Mr. Godfrey said means “they’re out of business.” This falls under the Income Tax Act which was amended in 1975 to prohibit Canadian advertisers from claiming income tax deductions for expenses incurred from advertising in foreign-owned newspapers, now found in Sec. 19 of the act. The elimination of this tax concession—which is still allowed for advertising in Canadian-owned newspapers—was seen as a way to protect Canadian publications from foreign competition.
But Mr. Godfrey, previously the head of Sun Media, told the sold-out audience that when he returned to the newspaper industry after spending nine years as president and CEO of the Toronto Blue Jays, he found out how much the internet had really taken over, and just how much had changed. With the onset of the internet, print advertising has been ceding ground to digital advertising, which isn’t subject to the same foreign ownership regulations, he said.
Corporations such as Google, Facebook and the Huffington Post, owned by AOL, are bringing in 50 per cent of digital advertising revenue in Canada, said Mr. Godfrey, adding that advertisers are drawn to them because of their massive, global audiences.
“They’re allowing people who don’t generate any content to come into the country and take the advertising with no rules or restrictions. They can’t regulate the internet itself, but they can regulate … advertising,” he said.
According to Postmedia Network’s second quarter financial report for 2012, which was published April 12, the company saw a $34.3-million decrease in print advertising revenue to $271.8-million for the six months ending Feb. 29, 2012, as compared to last year’s numbers over the same time period. Within these same time frames, digital advertising revenue decreased by $0.2-million to $43.6-million.
In recent years, newspapers have been struggling to adapt to the changing nature of news consumption. In April, Mr. Godfrey announced that Postmedia newspapers The Ottawa Citizen and The Vancouver Sun would be putting up online pay-walls, and at the beginning of May, The Globe and Mail announced it would be doing the same—a globally growing trend for newspapers in their attempt to stay financially afloat in the digital age.
On May 7, Postmedia Network announced its decision to shut down its wire service and subscribe to The Canadian Press newswire, in an effort to refocus operations away from day-to-day news and towards the distinct voices of their columnists and more in-depth coverage. It’s estimated Postmedia is paying $3-million annually for The Canadian Press stories.
People still read newspapers, said Mr. Godfrey, though they regularly get scalped of their original content by corporations—including foreign-owned corporations—who don’t produce content of their own.
Mr. Godfrey said Canadian newspapers are much better, so far as content is concerned, than the majority of newspapers in North America with the exceptions of The New York Times and The Los Angeles Times, he said.
Mr. Godfrey flew in from Toronto to attend Ottawa Mayor Jim Watson’s breakfast, and spoke before an audience of 200 local business leaders including Craig Kielburger from Free the Children; Denise Amyot, president and CEO of the Canada Science and Technology Museum (who’s been in the news recently as a result of the museum’s “controversial” and newly-opened Sex: A Tell-All Exhibition); and Donna Hicks, CEO of Habitat for Humanity National Capital Region, among many others.
In his speech, Mr. Godfrey also discussed his support for building a Casino in downtown Ottawa. Mr. Godfrey is also chairman of the Ontario Lottery and Gaming Corporation.
Original Article
Source: hill times
Author: Laura Ryckewaert
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