CCA Bulletin 4/10

January 28, 2010

The rules of the new Canada Periodical Fund:

The impact on arts and culture magazines

Just the Facts

On Wednesday January 20, 2010, the Hon. James Moore, Minister of Canadian Heritage announced that the criteria for receiving funding from the Canada Periodical Fund (CPF) will differ from the previous Canadian Magazine Fund (CMF) and the Publications Assistance Program (PAP. also known as the “postal subsidy”), which it is replacing as of April 1, 2010.

The CPF provides financial assistance to the Canadian magazine and non-daily newspaper industries so they can continue to produce and distribute Canadian content in the face of systemic disadvantages in the marketplace.

The creation of the CPF was initially announced on February 17, 2009 to establish a streamlined program in support of Canadian magazines and community newspapers. The new CPF maintains existing levels of financial support for Canadian magazines and community newspapers--a total of $75.5 million annually. This includes the annual $15 million “postal subsidy” that was once the responsibility of Canada Post and to which the government has committed for two years.

Despite the fact that the CPF remains at the same funding level, there is considerable concern that one of the areas most affected by the new regulations will be literary and arts publications which fall under the 5,000 circulation level. While they will remain eligible for the Business Innovation component of the new Fund, they will lose the additional financial support they were receiving under the previous regime.

According to sources, this will affect some 40 titles, mostly in the cultural sector. Most of the arts titles with distribution under 5,000 are eligible for support from the Canada Council for the Arts through their Literary and Arts Magazines Program:  however, the Canada Council will not be receiving any increase in funds to supplement magazines now ineligible through the CPF.

Many small arts publications relied on CPF’s predecessor programs as part of their annual operational costs. Now, these publications may see between 25% - 30% of their annual budgets disappear, with no other sources of federal funding. It is difficult to assess at the moment how they will cope with this new reality or how many will simply disappear, at least in their current format.

Tell me more

One of the priorities for the new Canada Periodical Fund is to 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. The formula has been fixed for the first year of the program and is based on copies sold, not on mailing costs or editorial expenses, as was the case under the previous programs in place. In the first year, all publishers will receive no less than 90% and no more than 150% of the support they received most recently from the PAP and CMF programs. This formula is only in place for the first year and will be replaced with a new formula for 2011-2012.
• 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. This change will affect four large titles in Canada, including MacLean’s and Chatelaine magazines.
• Set aside separate funding to assist online publications in finding innovative and profitable ways to reach Canadians. However, publishers cannot receive funding from both the Aid to Publishers and the Business Innovations components of the new CPF.
• Continue to recognize the special challenges of certain types of periodicals (including farm publications, Aboriginal publications, and publications serving official-language minority communities).

One of the striking aspects of the new system is that the government has really streamlined the application process: most applicants will use a two-page application form that is very quick and easy to fill out. This includes most magazines that are currently participants in the PAP or CMF programs. This is obviously a good thing since the deadline for the Aid to Publishers Component is extremely short as applications must be in by February 19, 2010.

As was mentioned before, small publications with a total annual paid circulation of 5,000 copies or less are eligible for only one aspect of the CPF, with exemptions for Aboriginal, ethno-cultural and official language publications. Other exemptions include agricultural publications such as The Western Producer, Canadian Cattlemen and Grainews, magazines which are on the whole quite profitable and, as some critics have pointed out, happen to be in government’s ridings.