Postal cuts threaten magazines

Publisher:  Connexions Information Sharing Services
Year Published:  1989
Resource Type:  Article
Cx Number:  CX3637

Abstract: 
The Progressive Conservative government's spring budget included drastic cuts to the century-old postal subsidy program. Only 12 months earlier it had promised magazine publishers the program would be retained for at least five more years. The budget cuts $45 million from the $220 million subsidy program. According the Canadian Periodical Publishers' Association (CPPA), Canada Post provides the critical link between publisher and reader for the overwhelming majority of Canadian magazines. Subscriptions are the backbone of nearly all magazines, because newsstands are dominated by American magazines and account for less than 10 per cent of Canadian magazine revenues. The subsidy program makes periodicals of all types available to readers, no matter where they live. Canadian magazines are at a disadvantage when competing with American magazines because they have the same upfront costs, but have a much smaller market and don't have the economies of scale U.S. publications have. According to CPPA president Lorraine Filyer, postal increases could wipe out the industry's slim profits; in fact, 60 per cent of CPPA member publications operate with no profit margin at all, even with the postal subsidy.