- News Media Canada offered a series of ideas designed to deal with the "precarious state of the news publishing industry," with the top recommendation being a big boost to the existing tax credit on the salaries of journalists at qualifying news organizations.
- Eligibility for the labour tax credits is decided by an independent advisory board appointed by the government, causing concern among some critics about its effect on journalist independence, or the perception of it among Canadians.
- "We're supposed to be talking about saving democracy and the value of a free and independent press. You don't you don't rescue the free and independent press by making it unfree and dependent," said Peter Menzies, a senior fellow with the Macdonald-Laurier Institute and former publisher of the Calgary Herald.
As Google and Meta look increasingly likely to shun the government’s online news legislation and, as a result, block Canadian news from their platforms, an organization representing newspaper publishers has a plan B: more government money to help cover the salaries of journalists and a ban on advertising on CBC News.
As part of the government’s pre-budget consultations, News Media Canada offered a series of ideas designed to deal with the “precarious state of the news publishing industry,” with the top recommendation being a big boost to the existing tax credit on the salaries of journalists at qualifying news organizations, from 25 percent to 35 percent.
“We should not be competing with the CBC for scarce ad dollars,” said Paul Deegan, the president and chief executive officer of News Media Canada. “There’s no one single measure that’s going to solve this. We’re all trying to figure out what the best solution is.”
Eligibility for the labour tax credits is decided by an independent advisory board appointed by the government, causing concern among some critics about its effect on journalist independence, or the perception of it among Canadians.
“I definitely think that there is reason for concern about the dependence on governments or government regulation for support for the sector, which has obvious implications for its independence. I don’t think that’s a good or sustainable approach,” said Michael Geist, a law professor at the University of Ottawa where he holds the Canada Research Chair in internet and e-commerce law.
Some experts also worry about the effect that increasing dependence on the government will have on the quality of news and the trust of readers, which is already in decline.
“You can conduct your business and you can continue to post your stories, but if you don’t care whether anybody reads them or not, or if that becomes of secondary interest to your business model, then what are we doing here?” said Peter Menzies, a senior fellow with the Macdonald-Laurier Institute and former publisher of the Calgary Herald.
“We’re supposed to be talking about saving democracy and the value of a free and independent press. You don’t rescue the free and independent press by making it unfree and dependent,” said Menzies.
The newspaper publishers also want the government to earmark 25 percent of its advertising dollars to “trusted news sources,” which would include private sector broadcasters. The group is also asking the government for incentives for businesses that spend advertising dollars with Canadian companies and to extend the Local Journalism Initiative for five more years at a price of $25 million per year.
If Meta and Google were to reach agreements on compensating publishers as part of Bill C-18, the government’s online news law, which have been estimated at about 35 percent of newsroom costs, it would take the labour costs covered by government and government regulation up to 70 percent. For comparison, the CBC’s full budget is made up of about 65 percent government funding, with the rest made up of advertising revenue.
Geist said it’s unlikely that both companies will reach agreements and it looks increasingly clear that Meta has made a global decision to move away from news.
That could be why government funding announced five years ago as temporary funds to help legacy outlets transition to the digital age is looking increasingly permanent. In 2018, the government announced a collection of policies to boost the balance sheets of legacy media organizations at a cost of $595 over five years, which included the 25 percent labour tax credit.
Some of these programs went under-subscribed due to layoffs in the quickly shrinking industry. The labour tax credit, for example, was projected to cost up to $90 million but cost $35 million in 2022. A tax credit for news subscriptions had a projected cost of $40 million in 2022 but only wound up costing $15 million.
“I think it’s really sad. Right from the start, when they were pushing for this, they said it had to be temporary, that they would have to come up with their own solutions eventually,” said Menzies. “I’m not aware of any evidence that they have been successfully or diligently working on a transition to the digital age.”
Menzies has called on the government to create a Canadian Journalists Fund that would be funded by taxing companies like Facebook and Google but would not have the government involved in its administration or distribution of the funds.
“Before we abandon the idea that there is a better way, we should try one,” said Menzies.