Call to Spend $200 Million to Save Canadian Journalism

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By Susan Delacourt

Days after Canada’s largest newspaper chain announced a fresh round of layoffs, the federal government is being handed a dozen options today to help fix the ailing news media business in Canada — ranging from taking digital ads off the CBC to injecting funds into local, indigenous and investigative journalism.

The recommendations come in a new report from the Public Policy Forum, tasked by the government to look into concrete measures to stem the sharp decline of the journalism industry.

Titled “The Shattered Mirror,” the report makes abundantly clear that journalism’s public function is nearing a crisis point, beset by everything from the digital disruption of its crumbling, 20th-century business model to “fake news.”

“This slide may not produce the kind of crisis point that stops policy-makers in their tracks, as the implosion of the auto industry in 2008-09 did, but the pace is unrelenting and the downward slope ever deeper,” the report states.

Half of the 12 recommendations are aimed at injecting “economic sustainability” into Canadian journalism, mainly through tax or legislative measures and the establishment of a “future of journalism and democracy fund,” with a startup investment of $100 million.

The other half are targeted at the “civic function” of journalism and “digital innovation”. Three recommendations deal with the CBC. While the report doesn’t go as far as the CBC itself did with its recent request to go totally ad-free, PPF does say that CBC should be operating without the “clickbait” incentives of digital ads — and that the government should strengthen the “inform” part of CBC’s mandate and its role as a distributor of Canadian news content.

The total cost of the report’s recommendations is hard to estimate, because they hinge on projected future business in an uncertain economic climate for the media. But in terms of the “fiscal implications” mentioned in the report, the government would be looking at costs of at least $200 million a year, much of it to be financed through the journalism fund that the PPF would like to see established.

The report also calls for the establishment of an entirely new arm of the newswire service Canadian Press — one devoted entirely to local content — and the creation of a legal advisory service for investigative journalism.

The economic recommendations that would require legislative change by the government include:

  • An adjustment to income-tax legislation that currently gives advantages to non-Canadian and digital advertising, through the way it allows for tax deductions on ad costs. This change alone, called the “Section 19 enhancement,” could create a pool of $200 million to $300 million to reinvest in the future health of Canadian journalism, the report says.
  • Extending GST/HST to foreign competitors of the Canadian media industry, which now also enjoy advantages that homegrown news businesses do not. This measure, like the tax adjustment, would have to be carried out under NAFTA provisions which forbid tax discrimination based on corporate nationality. But while the report doesn’t mention it, NAFTA is facing renegotiation under the administration of President Donald Trump.
  • Strengthening of the Copyright Act’s provisions for dealing with the wide and often chaotic digital distribution of original material, so that creators get paid and get credit for their work.

The Commons’ heritage committee also is due to come out with a report within weeks on the same subject, possibly with many of the same recommendations.

The PPF drafted the report over much of the past year with a $200,000 grant from the federal government and at least $70,000 in private contributions, to help insure the study’s independence. The money from the government didn’t come with a specific mandate beyond a request to address the deteriorating state of the journalism industry, said Ed Greenspon, president and CEO of PPF.

Much of the report is bleak reading for those in the journalism business, describing what one chapter calls a “march to the precipice” for the Canadian news industry. Written and published before this week’s new round of layoffs at Postmedia, it lays out in some detail the huge job losses and the collapse of many long-established media enterprises in Canada.

But the report is framed not merely as a lament for lost media jobs or profits, but as a look into the implications for democracy if the “civic function” of journalism founders along with the businesses that used to sustain it.

“We are certainly witnessing a crisis for the traditional news industry, but is it a crisis for democracy?” the report asks, before answering, ‘Yes’.

As part of its study, PPF commissioned polling research from Allan Gregg at Earnscliffe Strategy Group. According to his findings, more than three quarters of the repondents said that democracy would be threatened by the absence of news service from the more traditional television, newspapers and magazines, and their websites.

Trust is a big factor, according to Gregg’s polling. About seven out of 10 online news consumers reported getting their news from traditional media websites. Gregg is quoted as saying in the report: “The fact that traditional sources of news draw the largest digital audiences is therefore a major contributor to the trust and authority to online media.”

Polling participants said that they rely on news to provide them with information needed to “protect (their) rights” or “hold the powerful accountable.”

The report goes on to say: “The public largely associates these functions with established news providers. Any threat to democracy is seen to be all the more dire if news from traditional news media dries up.”

The dozen recommendations are sweeping and ambitious, so it’s difficult to predict whether they’ll be embraced by Prime Minister Justin Trudeau’s government.

This was originally published on 26 January 2017 in iPolitics

https://ipolitics.ca/2017/01/26/ottawa-called-on-to-spend-200-million-to-save-canadian-journalism/

JULY 2017

Vol. 11 - No. 12










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