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Ottawa weighs financial help for Canadian media

Toronto Star logo Toronto Star 2018-02-14 Bruce Campion-Smith - Ottawa Bureau

Heritage Minister Mélanie Joly has hinted that the Feb. 27 federal budget will deliver some assistance to offset the financial challenges confronting news outlets. © CP Heritage Minister Mélanie Joly has hinted that the Feb. 27 federal budget will deliver some assistance to offset the financial challenges confronting news outlets.

OTTAWA—On a frosty morning, Bob Cox, publisher of the Winnipeg Free Press, found himself out delivering the paper.

A problem with the printing presses had delayed publication of Thursday’s paper and now it was all hands on deck to get 60,000 copies of that day’s edition into the hands of readers.

For Cox, the experience of meeting subscribers keen to get their morning read was a welcome reminder that local news is valued.

“I find it quite heartening to deliver a route once in a while. Inevitably, I meet people at their doors who are waiting for the paper to arrive. It shows what a big role it plays in their daily lives,” he said, as he took a break from his late-morning deliveries to warm up and return a phone call.

But the delivery of local news in Canada is threatened by more than a balky printing press.

A precipitous decline in ad revenues, the shift to digital, and the domineering online presence of Facebook and Google have upset the traditional business model for Canadian news organizations. All are casting for a new model that does work. But the ensuring economic turmoil has seen newsrooms close, journalists laid off and diminished coverage, especially in local news.

On Wednesday, the Fédération nationale des communications (FNC) will hold a news conference in Ottawa to draw attention to the crisis.

Just over a year ago, the Public Policy Forum’s report “The Shattered Mirror” offered a grim assessment of the country’s news industry. Since 2010, 225 weekly and 27 daily newspapers had closed or merged operations. “Anyone who views news as a public good will see that this decline damages civil discourse,” the report said.

It noted that no established news brand in Canada — with the exception of Montreal’s La Presse — “has come close to having digital revenue overtake non-digital revenue.”

“Success has been elusive in the industry in substituting reader revenue for vanishing ad sales,” it said.

The Public Policy Forum and others, including the Commons’ Canadian Heritage committee and New Media Canada, have laid out potential remedies to aid media organizations during the transition.

News Media Canada, for example, proposed overhauling the Canadian Periodical Fund, which currently provides funding only to print magazines and non-daily newspapers to offset their mailing costs.

Under the proposal, it would be renamed the Canadian Journalism Fund. In addition to its current mandate, a new civic news component would extend funding to daily and community newspapers, some digital-only publications and The Canadian Press wire service.

To qualify, new organizations would have to demonstrate a commitment to covering civic news that would include reporting on elected officials and public institutions.

Heritage Minister Mélanie Joly has hinted that the Feb. 27 federal budget will deliver some assistance to offset the financial challenges confronting news outlets.

And it appears Ottawa will use the Canadian Periodical Fund to channel the new funding. But federal officials have been quietly putting the word out that the financial assistance might not be as generous as some in the industry are hoping for.

Cox said he’d like to see the federal budget deliver more cash for the periodical fund — triple the $75 million it gets now a year — and the criteria expanded “so it truly funds news reporting.

“It should be opened up to daily newspapers and it should be based on the journalism you do, the content you create,” said Cox, who chairs New Media Canada, an industry association which represents print and digital media.

Last month, John Honderich, chair of the board of Torstar, the parent company of the Toronto Star, expressed frustration that the government had yet to act on any of the recommendations. The Liberals’ approach to the “crisis” was “studied indifference,” Honderich wrote in the Toronto Star.

Asked directly about Honderich’s analysis, Joly said the Liberal government recognized that the “news sector is important to our democracy.”

“Any form of support must be always done in respecting journalistic independence. I’ve said it many, many times. We will not support failing business models,” she told reporters.

“We will study how we can support transition to digital models and also how we can ultimately support local news in rural and local communities,” Joly said.

Joly’s spokesperson, Simon Ross, declined the Star’s request to speak with the minister. Ross said the government has already taken steps to support Canadian media. He cited additional funding for CBC and its French language arm, Radio-Canada, which has boosted coverage in small communities.

“We absolutely want to protect journalistic independence, so we will tread carefully and take a targeted approach when it comes to the news industry,” he said in an email.

But the responses from Joly and her office have left many in the media industry frustrated.

For starters, Cox said while the government touts its increased funding for the CBC as evidence of support for local media, that by itself is not enough.

“The simple fact is that most community journalism is being done by newspapers. They are the base of the news ecosystem in most cities and towns . . . sometimes they are the only player,” he said.

“We just want the government to recognize that and recognize that in a tangible way,” Cox said.

Joly’s oft-repeated insistence that the government won’t support failing business models has also stirred consternation.

The reality is not so cut-and-dried in an era when media organizations publish their material across an array of platforms — print, mobile and web, some legacy, some digital.

“It just infuriates me when I hear her say that they won’t support business models that are no longer viable because every single media business model is not viable, with the exception of Google and Facebook,” Cox said.

“The magazine industry wouldn’t exist if it wasn’t propped up by the federal government,” he said.

That’s echoed by Howard Law, who oversees Unifor’s media sector.

“News websites are a failed business model, if that’s the criteria. Google and Facebook have equally devastated news websites as they have devastated print newspapers,” Law said in an interview.

“I just don’t think they know what to do, so they’ve been buying time with this failed business model stuff,” he said.

Law said there are steps the government could take now, such as tax changes to encourage advertising in Canadian media rather than American online sites and allowing charitable support of journalism.

“How much journalism do we think is worth saving and how much are we just prepared to live without,” Law said.

Veteran journalist Paul Adams said the focus of government policy should be on encouraging what he calls a “vibrant local news ecosystem” that performs the core functions of journalism such as covering city hall and courts.

“The question is how do you support those core civic elements of journalism without getting entangled with the issue around business models?” he said.

“It’s a very delicate business to be stepping in in the midst of a big transition,” said Adams, a former journalist at CBC News and the Globe and Mail who is now an associate professor at Carleton University’s School of Journalism.

He said additional funding to the CBC has helped foster more local journalism but like Cox, Adams said newspapers “are the central institutions in most local media systems” that often set the agenda.

“Television and radio . . . do take their cues from the newspaper to a substantial degree,” he said.

He said the diminishing of local news coverage started before the current economic crisis, caused largely by mergers that saw papers lose editorial autonomy and resources.

But the economic woes have accelerated to the point where the future of newspapers is in doubt. The failure of Postmedia, for example, would leave many major Canadian cities without a paper, he said.

“Why should we care? Because the media perform a core function in our democracy,” Adams said.

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