iPolitics

iPolitics: Handouts won’t help Canada’s ailing news business

Written with Jackson Doughart

Private-sector newspapers were once in the business of scrutinizing government, including government spending. Now, they’re the ones with their hands out.

Today’s news media outlets face a terrible Catch-22: If their representatives succeed in securing state funding, they will jeopardize their independence and become mere minor-key equivalents of the CBC. But if they can’t get their private funding houses in order, their products will wilt away, and the CBC’s advantage — deep government funding — will finish them off for good.

Recent developments in Quebec suggest that many outlets are heading down the subsidy path: 146 newspapers in the province have formed a coalition to lobby the Quebec government to fund their digitization efforts. The mix is mostly small local outlets controlled by three different conglomerates, as well as Le Devoir.

The newspapers are asking to be reimbursed through a tax credit for 40 per cent of the cost of salaries and costs associated with reporting for the next five years. They also want a 50 per cent tax credit for the development of digital platforms. In the meantime, they want to be exempt from sales taxes and have the government commit to purchasing more ads in their pages.

Quebec’s largest papers, by contrast, have rightfully avoided such begging, with La Presse and the Montreal Gazette already investing in their own digital apps.

Long gone are the days when advertising dollars alone could support the smoke-filled towers of media empires. Today’s newsrooms are slim, penny-pinching operations that struggle to produce enough capital to cover even basic operating costs. So it’s easy to see how digitization may be a daunting task.

But is this the taxpayer’s problem? If citizens don’t want to fork over a monthly subscription fee, should they nonetheless be made to pay tax dollars to the media industry for corporate welfare?

Le Devoir’s Brian Myles argues that his newspaper deserves government help to promote Quebec culture. Who else, he asks, can cover visual arts, classical music, youth theatre and all types of literature across the province? Yet if Quebec’s arts scene is so vibrant, reflecting the culture of the people, it follows that there’s strong demand in the free market for a publication to cover it well.

This problem isn’t unique to Quebec. Postmedia’s Paul Godfreyappeared before the House of Commons Heritage Committee last spring with the same plea for government assistance. It’s the same story for other news media. The Sun News Network argued for mandatory coverage before it withered out of existence.

The federal government was right to refuse Sun News’s ask. They should do the same for the newspaper industry’s plea for special treatment.

On a positive note, it was refreshing to see iPolitics publisher James Baxter offer a principled, contrary argument. To the same Standing Committee on Canadian Heritage, he said, “I am not here for a handout. I am here with my hand up. Stop!

“Fundamentally, I believe preserving the Old Media is not an option. I want to ask you to save your money by asking you to not bail out my competitors. I also ask that the government stop funding the CBC’s massive expansion into digital-only news in markets where there is already brisk competition.”

The CBC once competed only against American television stations. Things have changed a lot, to the point where the broadcaster is now entering competitive Canadian markets with an unfair advantage.

Fixing private newspapers’ revenue problem is their own responsibility, not the government’s. But Ottawa could aid the health of the newspaper market — and therefore serve the interest of readers — by reining in the CBC.

To do so, government should impose a condition on all funding to the public broadcaster — that it pull its coverage, programming, and personnel from services with existing private-sector providers, especially the digital news market. It also should demand that taxpayer funds be matched with funds earned through fundraising appeals during its television and radio programming, similar to PBS.

Finally, Parliament should demand structural changes to the CBC to abolish centralized, national control. Instead, regional offices with limited mandates should offer public broadcasting services responding to community needs, instead of top-down instructions from the Toronto office.

There is reason to be hopeful about the future of Canadian news media. Our country is a literate and educated one. Canadians closely follow public affairs. Unfortunately, the private actors who provide these services independently will continue to hobble along as long as Ottawa gives the CBC an unfair advantage.

Original post HERE

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