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Trade publications feel brunt of postal subsidies cut.

Trade publications feel brunt of postal subsidies cut

Publishers of newspapers in some Northern Ontario communities are unsure of how a change in the structure of postal subsidies will affect their publications.

"It's difficult to say where they (the federal government) are going with this," said Dave Armstrong of the Temiskaming Speaker in New Liskeard. "They're subsidizing one thing not to subsidizing another. It leaves a lot of grey area."

Armstrong is not alone in his uncertainty. Other publishers in the region are either unsure of the effects of the change or are unaware of the changes.

For 125 years the federal government has provided a postal subsidy - now totalling $220 million annually - for newspapers, magazines and books. The federal government announced earlier this year that it was scrapping the program in favor of a grant system. Following the announcement, the nation's publishers complained that the change could result in a 220-percent postal rate increase.

In June, Marcel Masse, federal minister of communications, publicized the details of the grant system, which will be in place until 1994.

Under an agreement between the Department of Communications and Canada Post, the book rate - utilized by book sellers - will not increase more than the rate of inflation until March 30 1992. At that time, publishers and book sellers will be able to tap into a $25-million annual assistance fund to offset postal rates.

The postal rates for magazines will be limited to the rate of inflation until March 30 1994. After that date, magazine publishers will be able to utilize a portion on an $85-million assistance fund. The fund will also be utilized by weekly newspapers located in communities with populations of less than 10,000.

"Those publications most in need get the most help," said Gerard Desroches of the information services branch of the Department of Communications. "Small weeklies received a great deal under the program."

The weekly newspapers will be able to mail 2,500 copies of an issue free of charge. Desroches said this was merely the continuation of a program initiated this year. Any copies in excess of that total will be charged the prevailing postal rate. Weekly newspapers which are affected by increases will also be allowed to use the $85-million fund.

Publications located in such Northern Ontario communities as Atikokan, Dryden, Chapleau, Hearst and Sturgeon Falls are expected to fall under this designation.

The provisions for weekly newspapers could actually assist the smaller publications, according to one newspaper manager.

"If this is true, it's a positive step for us," said Isabel Mosseler, general manager of the Sturgeon Falls Tribune. "This would help us compete with daily newspapers."

Mosseler's newspaper has a mail circulation of more than 930 and, because of the community's location midway between North Bay and Sudbury, the paper must compete with the Southam-owned Nugget and the Thomson-owned Sudbury Star.

In Sudbury, Andrew Cook, general manager of Northern Life newspaper, said the impact of the changes on his publication and others with circulations of more than 40,000 would probably be negligible.

However, Cook, who is also vice-president of Laurentian Newspapers, which operates publications in Thunder Bay, Nipigon, Terrace Bay-Schreiber and Parry Sound, as well as the Sturgeon Falls Tribune, said he believes there could be potential for political interference in the smaller markets where mail forms a newspaper's entire distribution network.

"I can see where, if a newspaper writes something a politician doesn't like, they'll have trouble getting the grant," he said. "The grant could become a carrot on a stick for some publishers."

Shut out from the postal rate assistance program are daily newspapers and foreign-owned publications.

Bob Ponton, publisher of the Daily Miner-News in Kenora, said he doesn't expect the newspaper will be adversely affected by the subsidy change since only about three per cent of the newspaper's circulation is sent through the mail.

However, he noted whatever impact there is could be magnified by the implementation of the proposed goods and services tax.

"It (the subsidy changes) will probably increase our costs slightly," he said. "But when you take the two of them together, it could be quite a lot to absorb."


While weekly newspapers appear to have escaped the changes unscathed, the same cannot be said for controlled-circulation publications.

Under the plans set out by Masse, controlled-circulation publications will be faced with major postal rate increases during the next two years until they pay full commercial rates. The publications will not be eligible for funding assistance.

Desroches could not explain the rationale behind the decision to exclude the publications from the assistance package and merely said the move would put all publications "on a level playing field."

According to Desroches, the publications will see postal rate increases of between 15 to 25 per cent in the next year and 50 per cent the following year. Such publications as Northern Ontario Business, Sudbury Business, The Northern Miner, The Northern Miner Magazine and a number of smaller trade journals will be affected.

"We're against the wall," said Beverly Akerfelet, circulation manager for The Northern Miner.

The publication, covering the country's mining industry, has a paid circulation of 15,000 and newsstand sales of 10,000. Akerfelet said the postal increase could also have an effect on newsstand sales, since a number of smaller dealers receive their copies of the publication through the mail.
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Title Annotation:News and Features
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Aug 1, 1990
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