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Liberals Won't Bail Out Canada's News Industry, Sources Say

A report recommends a new 'Future of Journalism and Democracy Fund.'

OTTAWA — The Trudeau government won’t be bailing out Canada’s struggling news industry, The Huffington Post Canada has learned.

The upcoming federal budget will include no cash to set up a civic journalism fund — as was recently recommended by the Public Policy Forum in a report commissioned by Heritage Canada, several sources confirmed.

The report, titled “The Shattered Mirror: News, Democracy and Trust in the Digital Age,” suggests the establishment of a “Future of Journalism and Democracy Fund,” funded through a tax increase on non-Canadian digital publishers and a one-time $100-million federal injection.

The fund would help news organizations transition to digital formats, support civic-function journalism projects through an arm's length structure and help small news organizations obtain legal advice.

It would dedicate $8 million to $10 million towards a free local news service — hiring 60 to 80 reporters to cover courts, provincial legislatures and city halls where Canada’s major newswire, The Canadian Press, has no current reporters. The fund would also devote $8 million to $10 million annually to support journalism by indigenous news organizations.

“There is no way we’re doing it,” a senior Liberal told HuffPost.

Joly focused on ‘independence of journalists’

In an interview, Heritage Minister Mélanie Joly was less definitive but stressed all future plans the Liberals announce will ensure “journalism independence is paramount.”

“We will be bringing forward in 2017 an entire new model on how to support Canadian content,” she told HuffPost.

“At this point, we are studying all scenarios but for us, the most important thing is that we keep the independence of journalists and government has nothing to do in politicizing the media that’s for sure,” Joly said.

There should be a “sound distance” between journalists and government, she said.

Ottawa already plays a role in the information sector through funding the CBC, through funding weeklies and periodicals, and through certain forms of tax credits, she noted.

"There are a lot of local media who are still putting in the good fight and could use some help and could succeed in transitioning and coming up with new business models."

The Public Policy Forum’s suggestion for a civic journalism fund actually creates a more independent structure than the government-appointed CBC board of directors — an organization Joly wholeheartedly affirmed is “independent.”

Some in the industry are also concerned by the Public Policy Forum’s recommendation.

The government already has a “news bureaucracy” with the CBC, whose large online footprint is “distorting the market” for local newspapers, said Winnipeg Free Press publisher Bob Cox, the chair of Newspapers Canada.

While Cox likes the tax changes suggested in the report and believes it could go some way in levelling the playing field with advertisers who are now spending more money on Facebook and Google ads, he said a super fund for civic journalism would finance journalists to compete directly against his newspaper.

“That’s what drives me crazy. There are a lot of local media who are still putting in the good fight and could use some help and could succeed in transitioning and coming up with new business models,” Cox told HuffPost.

The Public Policy Forum’s reports comes on the heels of many in the industry pleading with the Liberal government to step in and help.

Last May, for example, Paul Godfrey, CEO of Postmedia, the largest newspaper chain in the country, told the Commons’ Heritage committee that “everything you read or have seen or have clicked on for telling the doom and gloom in the news media industry does not provide the picture. In fact, it is actually quite understated.”

Godfrey urged MPs to recommend the Government of Canada increase its advertising in his newspapers. He urged, like the Public Policy Forum had, that Canadian advertisers spending on Canadian platforms be given more advantageous tax treatment. And he urged daily newspapers be allowed to tap a federal fund that already provides financial aid to print circulation magazines.

John Honderich, chair of Torstar Corporation, publisher of 110 newspapers including the Toronto Star, said readership isn’t the issue, it’s just the business model has failed. With millions lost to online classified advertising, The Toronto Star laid off hundreds of journalists, going from 475 ten years ago to 170 today, he said.

“There is a crisis of declining good journalism across Canada,” Honderich told the committee in September.

The Public Policy Report notes that since 2010, 225 weekly and 27 daily newspapers have either closed or merged across the country.

The Heritage committee’s year-long study of the state of media will likely be released in March. Joly said she’s looking forward to its findings and plans to review it, along with the Public Policy Forum’s recommendations, and the submissions from the government’s consultations on supporting Canadian content — news and entertainment — in a digital world.

"There is a crisis of declining good journalism across Canada."

Dr. Hedy Fry, the chair of the Commons committee, noted her group is taking a much broader approach. Yes, a number of witnesses pleaded for more government intervention but that wasn’t the overwhelming theme behind most of the presentations, she said.

“The biggest thing that people seem to be concerned about… is the future of journalism; the ability to know what is ‘news’ and how ‘news’ should be reliable and accountable,” Fry said, suggesting perhaps there should be some criteria to news.

“I mean how do we know that what we read is so?” she said.

Conservative MP Kevin Waugh, a former television broadcaster, feels there is a role for the government to play but said he is torn as to what it should be.

“There are pros and cons for both,” he said. “When I see The National Post buying out Sun Media and then getting into trouble over their head, well that is not caused entirely by a lack of readership that was caused by a lack of management…

“Is it my job as a parliamentarian to bail them out of that bad business decision?”

On the other hand, Waugh notes, government may have a role to play to ensure the health of our democracy and an informed citizenry.

“I know everyone is suffering out there. I see it on the ground,” Waugh said. But no one wants government dictating terms to the media, he added.

“When you get government intervention, how far does the intervention go before you cross the democracy line?”

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