Tom Korski, the managing editor of Blacklock’s Reporter, has some simple advice for Canadian news publications that rely on government subsidies to survive: “Die.”
Korski’s signature is one of 16 on the Ottawa Declaration on Canadian Journalism, which calls for private news outlets to reject government funding to ensure unbiased reporting and continued industry innovation (The Hub’s publisher and editor-at-large are also signatories). In its wake, The Hub commissioned a study by Public Square Research on declining trust in media. Last month, Reuters found that just 39 percent of Canadians trust the news “overall,” a steep drop from the 58 percent reported in 2018.
The Hub’s polling found that 70 percent of Canadians were unsupportive of government subsidies for private news organisations like The Globe and Mail and The National Post, while 76 percent believed that subsidised salaries could undermine journalists’ ability to objectively report on the government; this includes 86 percent of Conservatives and 75 percent of Liberals. Seventy-three percent of Canadians believe the subsidies would make it more difficult for journalists to challenge the government.
These subsidies have kept publications afloat in an age when print is dead, ad revenue is anemic, and most readers expect news to be free. But is staying in business worth it if so few readers or viewers trust you?
Trust us
Government funding for Canadian journalism now comes in many forms. Federal measures have included subsidies supporting the payrolls of qualified private news media, a $20 million tax credit for news subscriptions, and a nearly $20 million a year credit for the Local Journalism Initiative, among other measures. The government has also mandated Google to pay $100 million annually to support the industry.
At this point, estimates suggest that there could be as much as a 50 percent subsidy on journalist salaries up to $85,000 per year.
“Canada is running what could be the world’s biggest experiment in the subsidization of private journalism,” said Hub publisher Rudyard Griffiths at a recent event discussing media and trust at the University of Toronto’s Massey College.
This year, the support will add up to around $200 million, which is a drop in the overall federal budget bucket. But if you believe government funding produces an inherent conflict of interest, any funding is too much.
“How can you trust a [private] publication to be independent when it is dependent on the government through subsidies?” asks journalist Tara Henley, a Declaration signee. “Media needs to insulate itself from power.”
“Members of Parliament have to disclose a gift worth 200 dollars or more,” Korski adds. “Who thinks an MP can be bought for 200? Well, Parliament thinks MPs can be bought for the value of car mats. For a million dollars or more, these legacy publications can’t be bought?”
Bought or not, many are still being read. Paul Deegan, CEO of industry association News Media Canada, which lobbied for the subsidies, says, “Four in five adults in Canada read news publications each week.” He adds that tax credits keep the journalists at these publications employed.
The Hub’s study also found that about three-quarters of Canadians were unaware these subsidies, much of them paid with their tax dollars, even existed. Only 4 percent said they were following the subsidies closely. That may be a communications failure or obfuscation by the government and subsidised outlets, but others say the details of how the money is divvied out matters.
“We should be cautious interpreting data about a topic most people don’t know about,” says Chad Skelton, who teaches journalism at British Columbia’s Kwantlen Polytechnic University. “Their responses may be based on false assumptions. The survey finds most Canadians don’t trust the government to decide what media qualifies as journalism. In reality, independent arms-length bodies allocate the funding. Those processes may not be perfect, but it makes it more independent than those surveyed might realise.”
Staff work at the offices of CTVglobemedia in Ottawa on Sept. 10, 2010. Sean Kilpatrick/The Canadian Press.
Would Canadians support these subsidies if they understood them? Has a lack of knowledge allowed a damaging policy to fly under the radar? Are government-funded journalists truly compromised if the public isn’t even aware they’re funded by the government?
Veteran political journalist Paul Wells, who also signed the Declaration, argues that a conflict of interest is still a conflict regardless of whether it’s witnessed.
“Whenever I start criticizing the subsidy program, people start listing all the other problems with modern journalism, including sectarianism and low awareness,” Wells says. “I absolutely agree those are big problems. But I don’t see how the government programs on offer solve them.”
”[T]o me the main points are: (1) that the fact of government subsidies to news organizations will lead reasonable people to suspect it puts those organizations in a conflict of interest in their coverage of politics; (2) that the design of the subsidies amounts to a life raft for organizations that continue to organize themselves along old models that no longer work, stifling initiative and innovation,” Wells recently wrote.
Deegan points out that the subsidised Globe broke the foreign interference story, which was hardly a good look for the Trudeau government that helps fund them. He also notes that Canadians appear to trust the media more than our American counterparts, despite the lack of comparable American subsidies, and that Canadian journalists still appear to enjoy more trust than government officials and CEOs. But these days, that’s an increasingly low bar.
“I think it’s a safe bet to say that trust in everything has declined,” Wells says. “It’s been a more difficult 2020s than a lot of people expected, and almost none of our traditional leadership sectors have covered themselves in glory.”
This is as much of an existential conundrum for the media as a policy question, but funding decisions are certainly part of the puzzle.
“It would be interesting to ask Canadians if they trust police to investigate misconduct by elected officials,” Skelton says. “Police are paid for by the government but we generally trust them to do their jobs fairly. That’s because we have systems in place to ensure their independence from politicians. This suggests it’s just as important how government funds journalism as whether there is government funding at all.”
About two-thirds of Canadians do trust the police. But we all know the government pays their salaries. Conversely, while the Local Journalism Initiative requires government logos on funded pieces, Korski notes that many news publications seem to go out of their way to downplay their journalism labour tax credits.
“Why don’t they report it?” Korski asks. “Why wouldn’t the government dictate disclosure as a condition of subsidies? They do for magazines. They do for movies and documentaries. You must disclose that you receive funding from a federal agency. Why not news?”
Independent publications like The Tyee often clearly disclose government funding, but you have to spelunk deep into Postmedia’s annual reports to find any mention of their tax credits. That’s more than a typical reader should be expected to do, and it certainly doesn’t help win their trust—or help suggest that Postmedia is running a business model that can survive without these tax credits quietly contributing behind the scenes.
Canadian Heritage Minister Pascale St-Onge speaks with reporters about the online news act, December 15, 2023 in Ottawa. Adrian Wyld/The Canadian Press.
Who is the news for?
It’s easy to donate to a publication that will tell you everything you don’t like about Canada is the fault of a political party you already despise. Such publications are presumably trusted by their readers, but does that make their reporting reliable?
“Reader revenue models come with stakeholders who have their own expectations, which can constrain journalistic independence,” Deegan says, arguing that subsidies are preferable to reader-funded publications, which can become echo chambers beholden to flattering their subscribers’ opinions.
But Korski says this is neither new nor problematic; the papers of the past often told their readers what they wanted to hear. Readers can and should pay for their preferred viewpoints, Korski argues, not fund every viewpoint in the country with their tax dollars.
“Everyone has a favourite columnist or newsroom, they have content providers they trust,” Korski says. “I don’t understand why this is any different than what happened 100 or 200 years ago.”
A crisis of trust, however, was not unfolding 100 years ago. What changed?
“It’s simply easier to find alternatives than it ever was,” Wells says. “As soon as you have a choice, you want to shop around and mistrust what you used to have to rely on. The way of the world is fragmented attention and declining trust.”
Canadians, it seems, do not trust the media, but they seem to trust their media more. “When you look at trust in English Canadian regional or community newspapers, it’s 65 percent,” Deegan says. “Canadians may not love the media, but they often love their local newspaper.”
This may really be a question of whether we see the news as a public good we’re all entitled to, or a private product we should pay for. In the latter view, Korski’s answer remains blunt.
“If you can’t make money, the marketplace is telling you something,” he says. “Listen to it. If you rely on subsidies you are so ashamed of that you will not disclose them to your readers, then you deserve exactly what’s going to happen to you. Why does the country owe these people a living?”
Ideally, Korski says, better publications will rise from the ashes.
“Let’s not pretend the Toronto Star has some sort of proprietary magic,” he says. “If the Star dies tomorrow, someone else will report the news. These failing heritage organisations are absorbing just enough advertising and subscription revenue to be a dead hand on the marketplace. If you’re a little startup in Toronto, how do you compete with the Star?”
But regardless of your competition, the barriers to attracting new readers in a fractured media landscape are high. If they can’t be surmounted, Canadians could be left in the dark.
“Subscription revenue alone might sustain a commentary publication,” Deegan says, “but it’s certainly not enough to support a local newspaper employing full-time reporters who cover town council, the police, and the school board.”
Prime Minister Trudeau is unlikely to squash a story about school board shenanigans in small-town Manitoba that Manitobans deserve to hear about. But can such stories be told without his government’s funding?
The future of news
At least a few modern publications survive by filling a niche, requiring paid subscriptions, or squeezing blood from the advertising stone.
“There are alternatives, some are thriving,” Wells says. “Village Media has an online, ad-driven model, but they seem to be making it work.”
But if subsidies are eliminated, the question is whether organisations like Village will be the rule or the exception.
“I wish we lived in a world where government funding wasn’t necessary,” Skelton says. “But with advertising revenue having fled to tech platforms like Google and Facebook, the question isn’t whether government funding is ideal. It’s whether government funding is preferable to those news organisations no longer existing.”
That question is open to interpretation, especially given the fact that, despite subsidies, newsrooms continue to close. Wells cautions against believing we can subsidise ourselves back into an idealistic news landscape.
“The golden age was a market bubble caused by the confluence of a near monopoly on information and advertising,” he says. “Nothing about that was some kind of natural law. I don’t take the business model of newspapers as it existed during Watergate as something we’re all owed.”
Wells added that there are government-backed alternatives to the subsidy model.
“I think there’s more and less objectionable government interventions,” Wells says. “A subscriber tax credit that leaves choice in the hands of the citizen is way less upsetting than volume discounts for being an ‘approved’ news outlet. No one should be surprised if people take that as a government product.”
Deegan, however, notes that a tax credit relies on taxpayers being willing to do the paperwork and wait around for their refunds.
“About 302,000 Canadians filed for the tax credit in 2020,” he says. “That’s an uptake by tax filers of around 1 percent. Those subsidies are less efficient than incentivizing newsroom investment through refundable labour tax credits.”
Ultimately, there is no perfect method for funding the news, only methods that Canadians will find more or less objectionable.
“Many news organisations had to deal with an advertiser threatening to pull their ads because they were upset about a story,” Skelton says. “Philanthropists often have a particular agenda they want to promote. Some news organisations have been successful by putting their content behind a paywall, but it’s not great for society if only those able to pay have access to trustworthy information, while those who don’t pay only have access to misinformation. It’s in all our interests that everyone has access to reliable, trustworthy news.”
That last line is true. But if trust in the media continues to erode, the government will have to ask itself whether its sweeping and arguably secretive approach is doing more harm than good.
