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The Weekly Wrap: Canada 2024, where you’re poorer than you think

A customer shops in the produce section at a Metro grocery store In Toronto on Friday, Feb. 2, 2024. Cole Burston/The Canadian Press

In The Weekly Wrap Sean Speer, our editor-at-large, analyses for Hub subscribers the big stories shaping politics, policy, and the economy in the week that was.

Journalists should hold politicians to account, not be dependent on them

This week, The Hub was proud to sign the Ottawa Declaration on Canadian Journalism—a public declaration from a group of journalists and digital media outlets on the harms caused by the growing panoply of public subsidies for journalism.

We published only our third institutional editorial since 2021 to outline our rationale for signing and supporting the declaration. I won’t rehash its points here.

We’ve been pleased with the positive reaction to the declaration so far. Not only have we had some big-name journalists like Andrew Coyne and Paul Wells sign onto it, but, more importantly, it’s already started to catalyze a much-needed conversation about the magnitude of the public subsidies and their possible effects on the industry.

The scale of the subsidies isn’t well known. But it’s significant—in fact, there’s a good case that journalism is now among the most heavily subsidized sectors in the economy.

Eligible firms can receive a federal labour tax credit of 35 percent on per employee labour costs up to $85,000. In the Province of Quebec, print outlets can also claim a 35 percent tax credit on per employee wages up to $26,250. News outlets can also receive dedicated funding for journalists or freelance costs from the Local Journalism Initiative. And then of course there’s the government-mandated $100 million from Google for which we still don’t have the full details about its eventual distribution, including which firms will receive funding and how much.

The magnitude of public subsidies for Canadian journalism must be understood in cumulative terms. The stacking of subsidies (including direct and indirect) means that a significant share of newsroom costs for eligible firms are now defrayed by government support. We’ve previously estimated that as much as 50 percent of journalists’ salaries up to $85,000 could soon be covered by subsidies. In Quebec, the federal and provincial tax credits alone exceed 50 percent up to the eligible wage amounts.

There are of course other parts of Canada’s economy that benefit from government subsidies. There have been countless think-tank papers and opinion columns written over the years about the problem of “corporate welfare”, including notably in the auto and aerospace sectors. The recent case of massive subsidies for the electric vehicle industry is a good (or bad) example.

But in most of these instances, the government is subsidizing one-time capital expenditures. So while the absolute amount of public subsidies can be higher, it’s typically for a new plant or production line. There’s no other sector in the economy, to my knowledge, that’s receiving significant wage subsidies (as much as 50 cent dollars) to merely sustain its ongoing output.

If, as a news media company, the government is subsidizing in one form or another as much as half of your newsroom costs, are you actually a private company? And just as important, are you actually running a sustainable business?

For proponents of the subsidy regime, what’s the long-term plan? Do they envision subsidy-receiving firms to transition to market-based support over time? If so, how? Or are large-scale public subsidies for private news outlets the new natural order of things? And, if so, what’s the long term costs for the industry, including the public’s trust?

These are the types of questions we need to confront about the Trudeau government’s current media subsidy regime. We’re hopeful that the Ottawa Declaration can ultimately play a role in such a conversation.

Kirk LaPointe: B.C. Premier Eby’s support is collapsing as the newly minted Conservatives surge ahead

B.C. Premier David Eby pauses while responding to questions during an announcement in a greenhouse at Westcoast Vegetables in Delta, B.C., on Monday, March 18, 2024. Unprecedented drought in British Columbia last year has prompted the provincial government to invest $80 million to help manage, collect and store water for crops and livestock. Darryl Dyck/The Canadian Press

Two months before the 2013 B.C. election, Vancouver’s Province newspaper ran a front-page photo of front-running BC NDP leader Adrian Dix headlined: If this man kicked a dog, he’d still win the election.

It’s possible Dix read that and kicked his way through an entire kennel, but before long the puppy lovers and much of the province roused from its sleep. Memories of a shambolic NDP government years earlier were still fresh. B.C. Premier Christy Clark trounced him in a leader’s debate, organizers identified half of her support in the campaign’s last 10 days, and she got her own kick—at the can—for four more years in charge. Public opinion can swing that way.

Only a few months ago, Premier David Eby had his own kick-the-pooch moment. His party held a 20-plus-point lead in the approach to an October 19 provincial election campaign. The BC Liberals, questionably renamed BC United in case one day they wish to launch a soccer franchise, were on a slide deserving of a water park. And the BC Conservatives, with its privacy-pod caucus of two, was at a remove from most everyone’s thoughts on relevance and importance. Emergency Info BC was ready to text landslide alerts to voters.

Sure, amid those party standings one could find nearly half of the province telling pollsters it wanted change after seven years, but to what? Surely, not them!

Eby was hardly ordained to be premier. He was following a tough act as a frostier, stiffer NDP leader. If John Horgan was Mr. Chuckles as premier, Eby was Mr. Knuckles, as his attorney general. If Horgan was the leader you wanted to drink with, Eby seemed to be the leader to drive you to drink. But lo and behold, the job revealed in the six-foot-seven lawyer a stand-up comic’s humour coupled with a nerdy policy command and an indefatigable work ethic.

Eby riskily imprinted a more ideological NDP identity on Horgan’s more centrist party, emphasizing social equity over economic growth. Remarkably, as it took hold, it did not pose an apparent electoral threat. Until now.

It helped Eby that BC United leader Kevin Falcon developed a finger-wagging, “I’ve-got-a-plan, just-you-wait” swagger. His commercials position him as the most intelligent person in the room, but not necessarily the smartest. John Rustad’s BC Conservatives weren’t anywhere in the conversation.

But it was eerie for the longest time. Month after month, polls were suggesting public passivity in swallowing crises in living affordability, housing costs and shortages, health-care waitlists and doctor scarcities, mill closures, per capita GDP declines, opioid overdoses, resource development delays, climate change overreach, decriminalized open drug use, off-leash public spending—the list could go on. It was almost as if Eby could kick…

Everyone has a theory on why the surveys have turned on a dime, but can at least agree they have—and may continue. The sediment of grievances against the government have somehow fossilized, and where years ago Falcon would have been the next man up, many more want palpable change and think it would be better found with Rustad.

Most polls have Rustad’s party in a statistical tie with the government (one yesterday had the NDP up by 11, mind you), even though 54 percent of the province still doesn’t know the identity of its leader, a former BC Liberal minister. BC United and the Greens are well behind. Young people, in particular, are latching on to the Conservatives; older people, somewhat surprisingly, are not— at least not yet.

B.C. Conservative Party leader John Rustad speaks to members of the media during a year-end availability at legislature in Victoria, B.C., on Wednesday, December 6, 2023. Chad Hipolito/The Canadian Press

This upending may not last until October 19, but for the time being, we have a game on our hands. Rustad, ousted by Falcon from the Liberals two years ago after questioning climate change and celebrating CO2 on social media, is the beneficiary of word association as a perceived branch plant of Pierre Poilievre’s party. As he rides free media coverage, his critics note he has pesky challenges beyond any policy concerns: things like raising money, assembling a campaign team, luring winnable candidates, identifying support, and getting it out on E-Day. You know, the stuff that wins elections.

Where Falcon has had trouble defining his party’s positions, Rustad has clearer schemes. His policies are long-sought catnip for some and long-avoided kryptonite for others: the skepticism about climate change, the opposition to the carbon tax, the resolve to strip Sexual Orientation and Gender Identity (SOGI) curriculum from the classroom, the support for private and public health-care delivery, the insistence on mandatory treatment for addicts (even if it means employing the notwithstanding clause), the push for steeper criminal penalties, and the desire for a provincial immigration policy, among the mix.

Certainly, any impetus to generate economic growth through resource development, tax reduction, and fiscal responsibility would be a 180 from a government that has viewed business as an ATM and wealth as a flaw that can be fleeced indefinitely. Seven years in, executives still lament meetings with ministers who oversee 10-figure spending yet can’t read income statements or balance sheets.

Not surprisingly, under the NDP, B.C. has gone from the country’s best economy to its worst. The Business Council of BC recently used the government’s own figures to conclude its CleanBC climate change strategy would reduce the heft of 2030’s economy to 2013’s—back when Dix, theoretically, could kick that dog.

Eby isn’t oblivious to this newfound peril. He’s currently in dial-back mode as the campaign emerges. He was the strongest advocate of piloting drug decriminalization, only to realize schoolyards became repositories for needles and addicts could publicly use drugs with impunity, even as hospital patients. When not only his MLAs but his nurses’ union friends soured on the idea, he begged Ottawa for recriminalization post-haste. He also shelved controversial land reforms unfurled with little consultation. A party veteran told me the premier is, thankfully, not Dix, but has a flaw for creating too many priorities and expectations. These days, Eby doesn’t focus on Falcon; Rustad is his target.

Falcon and BC United are as responsible as anyone for the Conservative surge. Whether it was disqualifying conservative commentator Aaron Gunn from the 2021 leadership race, shifting social policy to the centre-left, or bumping Rustad out of the nest for him to then take the Conservative leadership, all it has done is rupture the federal Conservative/blue-Liberal coalition that ruled from 2001 to 2017.

Magical thinkers wonder why the two parties can’t just conjoin to topple the BC NDP, but that would require the onset of considerable amnesia and grace. Rustad has hardly forgiven Falcon, whose party generally sneers at the BC Conservatives as antediluvians. The most recent BC United proposal involved the two parties divvying ridings to not compete with each other, then awarding the premiership to the leader of the party winning the most seats. Conservatives correctly balked, and the BC United took to social media to blame the front-runners for nixing what, to them in this steep decline, seems a swell idea.

The only plausible union could come starting the night of October 19, if neither Eby nor Rustad secure a majority and need a dance partner. Seven years ago, a confidence-and-supply agreement cemented the NDP and Greens to take power from the BC Liberals. Seven years later, if the Conservative surge plateaus roughly where it is, Falcon may well be the kingmaker of the man he once kicked.