Canadian Magazine Industry News
17 November 2011,     MARKHAM, ONT.
Open Letter: Blue-box fee increase will "beat the spirit" out of publishers
Editor's note: In Ontario, many magazine publishers are required to pay levies to Stewardship Ontario, a government agency, to help cover the costs of the blue-box recycling program. Stewardship Ontario recently announced a 120% increase in the fees magazine publishers are expected to pay, from 2.48 cents/kg to 5.45 cent/kg. (see charts below). This increase follows rate hikes in previous years.

Newspaper publishers do not pay into the program as they have cut a deal with the agency to supply in-kind advertising.

Markham, Ont.-based publisher Michael Rosset has had enough. Here is his open letter to Stewardship Ontario:
 

To Stewardship Ontario:

For 26 years we have been an independent publisher. There are very few of us out there, with multiple titles, who continue to exist or have not been bought out by a larger company.

We have grown our company, hired numerous people, survived two recessions and never asked any level of government for any assistance. We finance ourselves and pay our taxes and take zero hand-outs from any government programme.
 
We understand there is a role for government, and protecting the environment is legitimate. But we have a right to expect cost-certainty when it comes to taxation and other costs that are imposed. And any levies should be fair and have some semblance of logic to them, beyond the simple “We need more money, therefore we are raising your fees 120%.”

Seriously?
 
I have seen the exhaustive formulae that was used to come up with this wrong answer of a 120% increase. It means nothing. It is based on wrong-headed thinking. The fact that the market for paper recovery changes or some components of your programme do not contribute as much, should not be my problem.

We pay a bit more to our printer to use paper made from recycled materials.

We have printed fewer pages per issue in the last three years than we did in 2007, due to the recession and less ad revenue.

These facts would not normally lead one to predict our fees for this programme would actually rise, much less by 120 PER CENT!
 
We use less paper, but get charged more, because your programme needs more revenue?

Have you ever considered cutting costs of your operation, the way we have to do to survive, when revenues are lower?

No, because, at the end of the day, it's not your money.
 
It seems your approach is cavalier and insensitive. Who raises rates, fees, taxes or prices by 120%, especially coming out of a recession? Please don’t point back to the formula. The formula is the result of an attitude or approach which is wrong-headed at its core.
 
Besides the extra money we have to try to find for no good reason, the ultimate danger is that decisions like yours, and departments like yours, threaten to beat the entrepreneurial spirit out of people like me and companies like ours. We play by the rules as we understand them to be and try to succeed in spite of the challenges. But when you raise rates by 120% in ONE YEAR, and have had similar rate hikes several times, you are changing those rules.
 
Further, you are not fostering a level playing field. American publications are NOT subject to these tariffs. Publishers of certain size publications are not subject to this programme. You end up targeting the small businesses that do most of the investment in hiring and maintaining jobs.
 
Taxes and levies should not be arbitrary or unevenly applied. And certainly, there should be some ability to have cost certainty when running a business or indeed a household. Can you imagine having your property tax rate or income tax rate or your hydro bill or phone bill go up 120% a year?

And just for good measure, it does not apply to everyone... just you and a few others as determined by people who have decided they just need more revenue.
 
If you can imagine this, then welcome to my world.

Change your operating formula if you must. But if your answer is raising rates by 120%, then you are asking the wrong questions.
 
Michael Rosset
President/Publisher
HOMES Publishing Group
Celebrating our 27th Year
Markham, Ont.
 
 


 


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