The Hon. James Moore, P.C., M.P. - The Government of Canada Creates Canada Periodical Fund to Better Support Magazines and Community Newspapers

MONTREAL, February 17, 2009 - The Honourable James Moore, Minister of Canadian Heritage and Official Languages, today announced the creation of the Canada Periodical Fund, a modern, streamlined program in support of Canadian magazines and community newspapers.

This announcement builds on the Budget 2009 commitment to provide $30 million over the next two years for Canadian periodicals. This will maintain existing levels of financial support for Canadian magazines and community newspapers--a total of $75.5 million annually.

"The periodical industry is a key cultural sector in Canada. Magazines and community newspapers generate revenues of about $3 billion annually and employ tens of thousands of Canadians in every region," said Minister Moore. "This industry needs stability in the levels of financial support it receives from the Government to weather the current economic slowdown, and that support should be flexible, targeted, and relevant. Our goal is clear: to offer Canadian publishers a simple and effective program so that they can continue to provide readers with a broad range of quality Canadian periodicals."

Following public consultations and taking into account evaluation results, the Government is replacing two programs, the Canada Magazine Fund and the Publications Assistance Program, with the new Canada Periodical Fund. The Canada Periodical Fund will:

tie support to the reading choices of Canadians;
build on previous programs to maintain support for the industry and thus help maintain jobs in an industry affected by the current economic slowdown;
reallocate funding to small and mid-sized titles to support a diversity of Canadian magazines and newspapers throughout the country;
provide greater flexibility so that publishers can manage funds strategically, including the flexibility to enrich their Web content; and
contribute to the Government's commitment to reduce paper burden for business.

"The Government is improving the way it does business to meet the changing needs of Canadians," said Minister Moore. "The way in which support to Canadian periodicals is delivered will be reformed to maximize value for money and to seize opportunities in today's global, technological environment."

The Government will launch the Canada Periodical Fund in 2010 2011. The existing programs will continue to operate until the new program is in place.

BACKGROUNDER:

Since before Confederation, the Government has acted to offset the high distribution costs and competitive disadvantages for Canadian magazines and non-daily newspapers, helping Canadians from coast to coast to coast overcome great distances and communicate their ideas, opinions, and art through print.

Canadian magazines and non-daily newspapers currently receive support through two federal programs: the Publication Assistance Program and the Canada Magazine Fund. The most recent evaluation of these programs found that federal support was still justified and delivering results for Canadians, but also identified some issues to be addressed and suggested that alternative program designs should be examined. In a recent poll conducted for the Department of Canadian Heritage, almost 90 per cent of Canadians agreed that access to Canadian magazines is important. (http://epe.lac-bac.gc.ca/100/200/301/pwgsc-tpsgc/por-ef/canadian_heritage/2008/472-07-e/summary.pdf)

The Publications Assistance Program has been delivered through a partnership between Canada Post and the Department of Canadian Heritage. In 2006, Canada Post announced its intention to withdraw its $15 million annual contribution to the program. The Government extended the Canada Post funding until March 2009, while the future of both federal programs was examined.

Last year, the Government launched public consultations on a proposed redesign of its support programs for periodicals. (http://www.pch.gc.ca/pc-ch/conslttn/rfppi/index-eng.cfm) The majority of participants supported the goals of the program review. (http://www.pch.gc.ca/pc-ch/conslttn/rfppi/index-eng.cfm).

The Canada Periodical Fund incorporates information learned from consultations, polls, program evaluations, and experience with operating the existing programs.

New Direction

The Canada Periodical Fund will build on the success of previous programs while modernizing the Government's approach based on two main principles:

1. Streamlined administration to maximize value for taxpayers' money.

To implement this principle, the Government will:

replace two programs (Canada Magazine Fund and the Publications Assistance Program) with one program--the Canada Periodical Fund--for greater simplicity and single-window access;
deliver the program through a single administrator, Canadian Heritage, allowing publishers to use Canada Post or any other delivery service;
provide recipients with flexibility in the use of funds, moving away from dictating terms to recipients towards partnering with them. Publishers of print periodicals, for example, could use program funding for online content;

2. Meet the needs of Canadian readers and seize the opportunities offered by new technologies.

To implement this principle, the Government will:

allocate the majority of funding through a formula based on the reading choices of Canadians;
cap at $1.5 million annually the amount that an individual title can receive. The money saved will be reallocated to small and mid-sized titles, recognizing the economies of scale available for larger titles and the need to support a wide diversity of choice for Canadians;
set aside separate funding to assist online publications in finding innovative and profitable ways to reach Canadians;
continue to recognize the special challenges of certain types of periodicals (including farm publications, Aboriginal publications, and publications serving official-language minority communities).

Program Structure

The Canada Periodical Fund will be delivered through three components:

A. Aid to Publishers - $72 million annually for Canadian magazines and non-daily newspapers, divided using a formula based on the number of readers each periodical reaches. Publishers will be able to use funding to support the creation of content, distribution, online activities, or business development.

As with the existing programs, eligibility will be open to paid or requested Canadian magazines and non-daily newspapers with at least 80% Canadian content. Daily newspapers, free publications, and professional association publications will not be eligible.

B. Business Innovation - $1.5 million annually in project funding for print and online magazines which have limited access to capital, but which provide an important developmental ground for the industry and contribute to the diversity of content sought by Canadian readers.

C. Collective Initiatives - $2 million annually for industry-wide projects designed to increase the overall health of the Canadian magazine and non-daily newspaper industries. Non-profit associations representing or serving stakeholders in the Canadian magazine or non-daily newspaper publishing industries are eligible. Past collective initiatives have included collaborative marketing plans, where the industry markets the Canadian brand rather than individual titles, collaborative research on the impact of new technologies, and several other projects to tackle systemic issues affecting the industry as a whole.

Implementation

The Canada Periodical Fund is targeted to launch in 2010 2011. The Canada Magazine Fund and the Publications Assistance Program will remain in place during a transition period in 2009 2010.

The Department is currently finalizing detailed eligibility criteria and guidelines for the Canada Periodical Fund. In the months before the program comes into effect, an applicant's guide will be made available and an outreach campaign will ensure that stakeholders are aware of the new program and the eligibility criteria.

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