Ottawa extending $565M in subsidies to Canadian media

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This article was published 20/11/2018 (2241 days ago), so information in it may no longer be current.

OTTAWA — The federal government will start subsidizing Canadians’ subscriptions and donations to news media, as well as newsroom salaries, while leaving it up to a panel of journalists to decide which agencies should qualify.

Ottawa earmarked more than a half-billion dollars for media over the next five years, in the economic statement Finance Minister Bill Morneau tabled in Parliament Wednesday.

“It’s necessary to have a journalism sector that is robust in our democracy,” Morneau told reporters.

The government outlined three policy planks for the news industry.

The government is proposing a non-refundable, 15 per cent tax credit “for subscriptions to Canadian digital news media.”

This would likely cover roughly two months of an annual digital subscription to publications such as the Winnipeg Free Press.

The Liberals say this would be a temporary measure to ease legacy media’s transition to digital offerings; they have not said how long the subsidy would run.

News organizations would also be eligible for a permanent tax credit to “support labour costs associated with producing original news content,” covering both non- and for-profit companies.

The third measure would allow newsrooms to receive charitable donations and issue tax receipts. This would apply only to “non-profit journalism organizations that produce a variety of news and information of interest to Canadians.”

American media have taken such measures for years, and last March the Liberals hinted at introducing them here.

Ottawa expects the three initiatives would cost $565 million over a five-year period, ending in March 2024.

Officials said they haven’t determined how much each of the three measures would cost.

Similarly, they could not explain why they expect it would cost only $45 million in the next fiscal year, before tripling two years later.

Colette Brin, the director of Université Laval’s media studies centre in Quebec City, said Ottawa seemed to hit a balance between stimulating demand for Canadian media, shoring up newsrooms and allowing them to find new financial models.

“Everything I’ve seen today seems well-thought-out and promising,” said Brin, who was raised in the Winnipeg neighbourhood of Windsor Park.

“It might seem like a huge number from the outside, but when you look at the needs of the industry, you look at the size of the country, and all the different areas that are underfunded, that money will run out fairly quickly.”

The government will form an arm’s-length panel of journalists to determine who could qualify for the cash. “It’s important to have a level of independence,” Morneau said, adding details will come “in the next days and weeks.”

The economic statement says the panel will “define and promote core journalism standards, define professional journalism and determine eligibility.”

Bob Cox, publisher of the Free Press, sits on the board of the National NewsMedia Council, which has lobbied for newspaper subsidies. He said the newsroom tax credit will have the biggest impact, because it’s pegged to actually employing journalists.

“It’s a really important recognition of the value of journalism in communities across Canada,” he said. “It’s important support, as news outlets try to figure out how to finance that journalism.”

April Lindgren, a Ryerson University professor who has studied news market gaps across Canada, wasn’t sure how much the subscription subsidy will incentivize Canadians to pay for news, “but every little bit helps.”

Edward Greenspon, head of the Public Policy Forum, said his study of Canada’s news industry showed newsrooms’ institutional knowledge has been depleting due to cutbacks. “Tax measures to relieve labour costs are critical in today’s disrupted news environment,” he wrote.

Wednesday’s announcement also specified some of how the federal Liberals intend to spend the $50 million over five years they allotted for news media in March. The money is targeted for third-party, “not-for-profit organizations” to create copyright-free content journalists can pull from.

Lindgren said similar efforts have fuelled investigative-journalism projects in Britain. For example, group-assembled datasets through access-to-information requests and court records which allow local newsrooms to find unique stories, such as the impact of cuts to rural bus service.

Those projects can “provide a benefit to newsrooms of all sides, on all parts of the country,” Lindgren said.

Cox said he’s waiting to hear more. He said those projects could help shore up smaller, community newspapers, but they’ll have to avoid duplicating coverage that already exists, as that could undercut newsrooms.

In any case, Cox expects a diversity of journalists from different mediums and perspectives on the panel to decide who qualifies for funding.

“Everybody needs to be at the table,” he said.

So far, the federal Liberals have resisted numerous calls from parliamentary committees and journalism advocates to close what they call a tax loophole for social-media giants. Currently, Canadian companies get tax deductions for their advertising costs for print and broadcast only when those media are based in Canada, but the same perk applies to internet giants Google and Facebook.

A senior Finance Canada source said the government is looking to align its tax policy on all digital with other developed countries through discussions led by the Organization for Economic Co-operation and Development.

dylan.robertson@freepress.mb.ca