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Ottawa Declaration on Canadian Journalism wants to put subsidy genie back in bottle

The Declaration urges news media outlets to reject the government subsidies most newspapers have been taking for years

Media Canadian Business

Photo by greenzowie/Flickr

In a classic case of “better late than never,” an Ottawa think tank has issued what it calls the Ottawa Declaration on Canadian Journalism urging news media outlets to reject the government subsidies most newspapers have been taking for the past five years now. The Macdonald-Laurier Institute, which apparently held a conference on the future of news and journalism recently, has signed up a handful of media outlets to its Declaration, mostly conservative online publications and bloggers whose business model instead appeals directly to readers for support. “The broadly unpopular subsidy regime represents a challenge to our democratic process insofar as it raises questions in the public’s mind about the independence of the press, thereby undermining the perceived veracity of reported news,” notes the Declaration. It points out that fewer than one in five Canadians surveyed support government funding of newsrooms, and that public confidence in news media has been plummeting since it was introduced, with only 37 percent now saying they “trust” the press. “The subsidy regime also creates an uneven playing field whereby some news outlets, primarily legacy media companies, are able to qualify for government support and others are not, stifling much needed innovation and private investment in the sector.”

Signed up to the Declaration are journalists from True North, the Western Standard, Blacklock’s Reporter and The Hub, which sponsored the hush-hush Ottawa conference, which the Internet knows nothing about and must have been invitation-only. The Hub, which I profiled recently, is a conservative online publication that just marked its third anniversary and is funded by the Centre for Civic Engagement, a think tank which as a registered charity is able to accept foundation funding. The Hub enthusiastically endorsed the Declaration, claiming that government funding “risks freezing into place all of the bad decisions and wrong assumptions that the market has rejected over the past decade or longer.” Taxpayer funding of media companies that have failed to effectively respond to market forces “seems counterproductive,” it added, quipping that it was like “rewarding the horse-and-buggy operators for failing to keep up with market developments in the last century.” Also signing the Declaration were bloggers Sam Cooper, Paul Wells, a former columnist for Maclean’s, Tara Henley and Jonathan Kay. Wells wrote on his popular Substack blog that he opposes the subsidies because they create the perception of a conflict of interest in political coverage and the way they are designed “amounts to a life raft for organizations that continue to organize themselves along old models that no longer work.”

The subsidies were introduced in 2019 as part of a five-year bailout package that provides payroll tax credits to media outlets which register with the Canada Revenue Agency and are deemed Qualified Canadian Journalism Organizations. Newspaper industry association News Media Canada originally proposed tax credits that would have paid 35 percent of every journalist’s salary up to a maximum of $85,000 and lobbied hard for them behind closed doors in Ottawa and in a long, one-sided campaign on the pages of its member publications. The bailout instead gave media outlets a 25 percent tax credit for each journalist to a maximum salary of $55,000. After digital media were excluded from the panel that set the bailout criteria, online publications broke away from NMC and formed their own industry group called Press Forward.

The bailout was supposed to help our press transition to sustainable digital publications, but that has been made difficult by the recent dominance of online advertising sales by digital platforms Google and Facebook. NMC lobbied anew for the Online News Act passed last year, which was expected to net our news media $329 million a year in payments from the digital giants but instead saw Facebook block links to news in Canada to avoid paying and Google agree to pay only $100 million a year. Ottawa thus extended its bailout for five more years until 2029 at an annual cost of $25.8 million and increased the payroll tax credits to the levels originally proposed by NMC.

The Macdonald-Laurier Institute, which describes itself as “rigorously independent and non-partisan,” and claims to be “the most cited think-tank in Canada’s parliament,” was founded in 2010 by economist Brian Lee Crowley, who serves as its managing director. Crowley also founded the Atlantic Institute for Market Studies, a right-wing think tank that merged in 2019 with the Fraser Institute. A 2015 analysis published in Policy Options found the MLI to be among the farthest-right think tanks in Canada. The Canada Files described it in 2020 as “led by Christian nationalists and Conservative Party connected insiders” and “filled to the brim with past and present CEOs, CFOs and wealthy millionaires.” The MLI’s corporate funders included CTV, Labatt, TD Bank, Merck, BMO and Pfizer, it noted, while its supporting foundations were “a who’s who of Canadian oligarchs and elites,” including the Garfield Weston Foundation, the Donner Canadian Foundation and the Atlas Economic Research Foundation. The Corporate Mapping Project noted that “its political ties and the materials it produces suggest MLI is a key source of conservative ideas.” The MLI is a member of the Washington-based Atlas Network of more than 500 free-market organizations in almost 100 countries which Sourcewatch has called the “Johnny Appleseed” of anti-regulation groups.

As I chronicled in my 2023 book The Postmedia Effect, the 2019 bailout was the brainchild of former Postmedia Network CEO Paul Godfrey, who assembled what I call the “newspaper lobby” to make it happen. It included former CBC English head Richard Stursberg, who as a media consultant proposed the payroll tax credits system in a 2016 paper commissioned by Rogers that urged their use in funding the production of any Canadian media content, including newspaper articles. Soon after the bailout was passed in 2018, Godfrey retired with a pay packet that topped $5 million with bonuses and stock options.

Since the subsidies were designed to keep newspapers on life support, and in the case of Postmedia sending south to its US hedge fund owners debt payments which have totalled more than $500 million since 2010, there is little chance they will renounce them. The Ottawa Declaration on Canadian Journalism is thus little more than a symbolic gesture of protest, but considering its source it no doubt sets the subsidies up for cancellation should the Conservatives form the next government as expected. That would precipitate a worse crisis, leaving cities from coast to coast without a major source of news, so a better way to aid the digital transition should be devised first.

Luckily there are better and more democratic ways of subsidizing news that leave funding decisions to readers and will be proposed in my forthcoming book Tomorrow’s News as well as in Canadian Dimension.

Marc Edge is a journalism researcher and author who lives in Ladysmith, BC. His books and articles can be found online at www.marcedge.com.

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