Special Report: The Positioning of Magazines: Postal subsidies: the figures don’t add up

In this report, the editors of a half-dozen consumer magazines - Clin D'Oeil, Cottage Life, Saturday Night, Shift, Toronto Life and TV Guide - explain what they are doing to better understand their readers and how they are positioning their product...

In this report, the editors of a half-dozen consumer magazines – Clin D’Oeil, Cottage Life, Saturday Night, Shift, Toronto Life and TV Guide – explain what they are doing to better understand their readers and how they are positioning their product against other media.

As well, reporter David Chilton looks at the effect on the Canadian magazine industry of proposed decreases in postal rate subsidies.

In an era of spending cuts, it is hardly surprising virtually everything paid for by taxpayers gets a long, baleful appraisal.

Postal subsidies for the magazine industry are no exception, as Finance Minister Paul Martin’s recent budget makes clear.

The Canadian Magazine Publishers Association in Toronto says, at first blush, it seemed Martin’s budget had lined up the postal subsidies program for a small but deficit-reducing hit of 8% over three years.

But, the cmpa maintains in its March 1995 newsletter, the percentages and the actual dollars quoted by Department of Canadian Heritage bureaucrats do not add up.

The dollar figures indicate cuts to the postal program of 24% over 13 months.

‘We’d like to take Finance Minister Martin at his word, says cmpa President Katherine Keachie in the newsletter, ‘but either his budget was misleading or Heritage department officials are juggling the figures to shift the deficit-reduction burden away from their own bureaucracy and onto department programs.

‘There seems to be a move to put these cuts on the backs of private sector magazines,’ Keachie says in the newsletter.

No matter how the arithmetic is done, or who does it, the fact remains the postal subsidies program has been under fire since before the installation of Martin.

The cmpa says, since 1990, government funding has plummeted to $77.5 million today from $220 million.

Doug Bennet, editor of Masthead, the magazine industry trade book, says it is time postal subsidies were phased out anyway.

Bennet, reiterating the points he makes in his April editorial, says since it is clear the country cannot afford postal subsidies any longer, the federal government should launch an orderly phase-out of them over the next 10 years.

At the same time, he says Ottawa should create a regulatory body for Canada Post and the postal industry in much the same way, say, as the Canadian Radio-television and Telecommunications Commission rides herd on broadcasting.

According to Bennet’s arithmetic, if postal subsidies were scrapped, magazines such as Maclean’s, Reader’s Digest, Chatelaine and others would face multimillion dollar postal rate increases.

At present, says Bennet, Canada Post charges eight cents a copy to mail a magazine if it weighs 200 grams or less.

The cheapest commercial rate now for such a service is about 27 cents.

Bonnie Venton Ross, a spokeswoman for Reader’s Digest in Montreal, says the postal subsidy issue is a very sensitive matter and the magazine is reserving comment until the federal government is more forthcoming on subject.

Reader’s Digest has about 1.5 million English and French subscribers across Canada, so an increase of even 15 cents a copy would send costs soaring.

According to the cmpa, Canada has had a policy of cheap postal rates for magazines for more than 100 years.

The policy recognizes the difficulties of reaching a dispersed population, so subsidies were instituted to make Canadian magazines available to Canadian readers at a reasonable cost.