PAP users face hefty hikes

The rates were announced Monday, Feb. 11 by the Department of Canadian Heritage, the federal ministry that administers PAP. They go into effect April 15. The rate increases are in tandem with increases in the Publications Mail rates set to be announced by Canada Post Corporation this week.

In the first year, participating community newspapers will see the rate for the first 200g increase to 10.1 cents from the current 9.4 cents, a 7.45 percent rise. In the second year, commencing Jan. 13, 2003 the rate will rise to 11 cents and then to 12.3 cents by Jan. 12, 2004.

The increases in the PAP Reference Tariff, as the rate is known, are higher than the increases to be announced by Canada Post. The Publications Assistance Program has an annual funding cap of $46.4 million, which is expected to be met and exceeded as a result of higher postal rates and new participants to the program. PAP is not allowed to go into a deficit position.

The participants must pay any amounts in excess of the $46.4 million cap.

According to Fred Heidman, a CCNA board member and chair of the association's PAP Committee, the rate increase is not a big surprise. "We would have wanted a lower rate, more in keeping with inflation, but we also know it could have been a lot worse if the original postal increase proposals had gone through."

Initial proposals from Canada Post would have increased Publications Mail rates much more and would have lead to an even higher deficit in the PAP fund. Aggressive industry lobbying and the direct involvement of the Minister of Canadian Heritage are thought to have had an impact on rate negotiations with Canada Post.

"The priority right now is to concentrate on the future of the program," according to Heidman. "PAP is under review and CCNA is at the table to ensure that the program's rules continue to meet the needs of the membership."

The Publications Assistance Program benefits about 400 community newspapers across Canada, all of them with paid circulations under 10,000, operating in communities of less than 10,000 population.

According to ministry statistics, the participating newspapers collectively mail about 26 million copies annually, receiving a total subsidy of $4.1 million or about 20 cents per copy.

By comparison, the top two recipients in the program, Macleans and TV Guide, together received about $6 million in the same year. In fact, the ministry calculates that 64 percent of all subsidy dollars are targeted to less than five percent of eligible publications. This finding is highlighted in a ministry discussion paper circulated to the industry at the beginning of the consultation process for the PAP review.

Full details of the increases are being mailed to PAP participants by the ministry. In addition, they will be posted to the ministry's web site, www.pch.gc.ca late on Feb. 12. Canada Post Corporation is expected to send details of its Publications Mail increases later this week as well.

Price per addressedcopy or per bundle of unaddressed copies
Current

April 15/02 -
Jan. 12/03

% increase

0--10,000 copies

0--200g
Over 200g (copy per gram)

9.4
0.047