A plan by Canada Post to expand its distribution of retail flyers across the country has raised the ire of a national advocacy group for print and digital media.
The group believes the federal Crown corporation is trying to muscle in on a revenue stream that was once dominated by newspapers.
News Media Canada not only wants the federal party leaders to commit to restricting Canada Post’s ability to become a larger player in the flyer market.
The newspaper industry has been hit hard in recent years with declining print subscriptions and dropping advertising revenue. In response to that, Ottawa announced a $595-million, five-year plan, last fall, to prop up Canada’s media sector.
“While the government has taken a number of significant steps to support the (newspaper) industry, its own agency Canada Post is embarking on a plan that will seriously harm one of the main revenue sources for Canada’s newspapers,” John Hinds, president and CEO of News Media Canada, said in a release Thursday.
With the newspaper industry “knee-deep” in transition, Hinds said the national postal service plans to unfairly carve out its share of the flyer distribution market “by using their privileged access to customers’ mailboxes.”
Unlike Canada Post, newspapers that distribute flyers do not have access to lockboxes in apartments and condominiums.
Earlier this year, SaltWire Network obtained a January 2018 internal Canada Post Corp. document called Neighbourhood Mail 2.0 Launch, which lays out the strategy to increase its flyer business.
“This is a direct-mail campaign targeting CPC’s top 100 retail customers ... The new NM (Neighbourhood Mail) is very specific to retailer(s) who use flyers, so we are focusing on our biggest bets to see if we can convert them from newspaper to CPC distribution.”
One of the Crown corporation’s tactics is a new pricing structure that offers discounts of between 24 per cent and 34 per cent off non-contract, standard per-unit prices.
"...having Canada Post use its special regulatory advantages to unfairly compete with newspapers is counter intuitive and counterproductive.” — Ian Scott, Saltwire Network executive vice-president and chief operating officer
The Saltwire Network, which owns 27 publications including The Chronicle Herald and the Cape Breton Post, is the leading flyer distributor in Atlantic Canada.
Canada Post said in a statement that it “competes fairly in the marketplace” and that newspapers have a “greater flexibility and lower prices ... (to) deliver the vast majority of flyers in Canada.”
Canada Post argued, while it has exclusive access to mailboxes, it doesn’t “deliver everything Canadians receive at their door.” And, newspaper distributors can often gain permits to access apartments from landlords and building managers, the statement said.
Saltwire Network executive vice-president and chief operating officer Ian Scott said the income provided by advertising and flyer distribution help to “subsidize” its local journalism.
“An average subscription would cost $200 more per year if we couldn’t depend on the revenue generated by flyers,” Scott said in an email.
He said Canada Post’s decision amounts to “unfair competition” that’s putting pressure on already challenged bottom lines of media companies.
“The federal government recognizes the important role journalism plays in a functioning democracy and made provisions to support journalism in its last budget to assist.
“Turning around and having Canada Post use its special regulatory advantages to unfairly compete with newspapers is counter intuitive and counterproductive.”
Twitter: @cbpost_chris
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