Some old-time journalists are dead set against public subsidies for journalism despite our news media dying on the vine due to the disappearance of the rich advertising subsidy they enjoyed for decades. “Taking money from the people we cover will place us in a permanent and inescapable conflict of interest,” wrote Andrew Coyne in the National Post after details of the $595 million federal bailout for news media were announced in 2019. “It will produce newspapers concerned less with appealing to readers than to grantsmen [sic].” Now writing for the Globe and Mail, Coyne was among the signatories to the recent Ottawa Declaration on Canadian Journalism, which called on news media to stop taking the subsides.

National Post columnist Terence Corcoran has argued against subsidies from the start because he claims they interfere in the rights of Canadians to “a free press that is not under any kind of control or influence from government.” Corcoran nominated me and several others for an award he called the “Most Pompously Wrongheaded Argument for a Government Bailout of the Newspaper Industry” just for floating the idea. Corcoran argued that newspaper subsidies in Sweden have resulted in a “warped newspaper market” that sees journalists act as boosters of politicians and parties. That’s because the subsidies, which were introduced in the 1970s and are funded by a tax on print advertising, were designed to preserve a diversity of political viewpoints, so of course every party has its boosters. Eight years later and having done much research on the subject for my forthcoming book Tomorrow’s News, I am more convinced than ever that subsidies are needed if we want to save our news media, which play a vital role in a democratic society. I am increasingly concerned, however, that a better system of support is needed than the payroll tax credits now being provided if we want to preserve press freedom and restore public trust.

Peter Menzies of the think tank Macdonald-Laurier Institute, which held a conference recently to float its absurd Ottawa Declaration, has been leading the resistance to press subsidies. The former Calgary Herald publisher argues that Canadians overwhelmingly oppose them, that a majority distrust the media as a result and that most have no idea how deeply dependent our media are on them. Unfortunately, Menzies vastly overstates this dependency, thus cratering his credibility. The payroll tax credit introduced in 2019 to subsidize the salaries of journalists has provided nowhere near the $119 million a year Menzies claims, instead costing $35 million in each of its first few years. The tax credits were recently extended until 2029 but were hardly doubled as Menzies claims, as they are instead estimated to henceforth actually cost less at $25.8 million a year. Menzies even opposes Ontario’s recent edict that 25 percent of all provincial advertising be spent on media based in that province rather than on foreign-owned digital platforms, calling it “cringeworthy” and the latest step on our news media’s “death march.”

One compelling argument in favour of press subsidies is that they have resulted in a “strikingly diverse” news media in Sweden, according to a 2023 study, which noted that they were “maintaining, or even expanding, this level of diversity despite a changing and challenging media landscape.” Other Nordic nations soon followed Sweden’s lead with press subsidies of various kinds, although Finland withdrew its in the 1990s after a financial crisis brought by the collapse of the Soviet Union, which was a major trading partner. Strong safeguards against government influence have resulted in high levels of public trust in subsidized Nordic news media, the study added. “In Nordic nations today, the argument that state involvement undermines press freedom is rarely made. This is because of the strong convention that has evolved to ensure no significant governmental pressure in 40 years of the subsidies’ operations, and because of the exceptionally high rankings of the Nordic countries on the World Press Freedom Index.”

Public trust in Nordic news media, according to the 2014 book The Media Welfare State, has been boosted by codes of conduct overseen by independent media councils. They take complaints from members of the public who claim to be victims of unfair coverage, judge them and then require that the publications involved publish their rulings. Even in Nordic nations where subsidies have proved effective in preserving press pluralism, however, they have been unable to hold back the rising tide of technology, especially as those countries have also had high rates of digital adoption. A 2024 study found that press subsidies in Sweden and Norway have not prevented a loss of newspapers but have created “support‐dependent” news media unable to survive on their own. “By contrast, the Finnish newspaper publishing industry has been in a better financial situation in terms of almost all indicators.” The question was thus not whether to continue the subsidies, the study concluded, “but rather how to organise digital markets in ways that best serve the interests of democratic societies.”

There are indeed real dangers to press freedom from taking government money, as a study of 55 countries found that governments used subsidies to manipulate news media in 31 of them. “By financing media and journalists willing to toe the government line and by not funding independent, critical media, authorities manage to suppress large parts of the media sector,” it noted. While some state subsidy systems for media worked well, such as in Sweden, the study found them to be rarities. “In most of the countries where subsidy schemes have been investigated, accusations of unfairness and corruption abound.” Despite the perils, the study concluded that public funding of media was essential due to the decline of commercial media, but that consultation with civil society groups was needed for any such system to gain trust.

A 2023 Council of Europe report surveyed best practices for sustainable news media funding and recommended subsidizing public service media through earmarked taxes on digital services. The report noted that research has repeatedly found that public confidence in media subsidies is increased by creating an arm’s-length relationship that guarantees press independence, with separate supervisory bodies appointed through pluralistic processes and not installed unilaterally. “It is of utmost importance that state funding should always be applied with the arm’s-length principle embedded in the governance systems,” the study warned. Ottawa has instead put bureaucrats at the Canada Revenue Agency in charge of the bailout tax credits, while bureaucrats and political appointees at the Canadian Radio-Television and Telecommunication Commission will oversee the distribution of Google’s pending $100 million annual contribution to news media under the Online News Act.

The real threat to press freedom is not subsidies, but in how they are provided. Canada, and especially its most hide-bound old journalists, could learn a lot from other countries about how to foster a healthy news ecosystem through smart media subsidies.

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.