Skip to main content

Media industry leaders say $595-million in new funding from Ottawa and the right to issue charitable receipts to donors will give them more flexibility as they adapt to dramatic shifts in the industry.

The funding will be distributed over the next five years. The bulk of it will go toward a refundable tax credit to “support labour costs associated with producing original news content” in both non-profit and for-profit newsrooms, effective Jan. 1. In addition, a temporary 15-per-cent tax credit will be available to people who purchase digital news subscriptions.

And the government has followed up on a measure it suggested in February, opening up a new category for recipients of charitable donations: “non-profit journalism organizations that produce a wide variety of news and information of interest to Canadians” will be able to issue charitable receipts that donors can use for tax purposes.

“This is a recognition of the seriousness of the problem,” John Hinds, president and chief executive of industry group News Media Canada, said of the federal government’s fiscal update. The new measures were unveiled on Wednesday.

The funding toward labour costs could be particularly helpful to smaller news outlets that are still in start-up mode, said Jeff Elgie, CEO of Village Media Inc., which operates digital news sites focused on communities in Ontario, including Timmins, Guelph, Barrie and others.

“We run very lean,” he said. “It’s not only going to potentially immediately affect our bottom line in terms of an offset of expenses … it will enable us to grow faster.”

The head of Canada’s largest daily newspaper chain also applauded the move.

“It’s a very positive step,” Postmedia Network Inc. CEO Paul Godfrey said. “It should be explained … some people may think it’s money you can spend on executive bonuses, or for distribution or advertising – but the government has been very specific that the money is for journalism. And I praise them for that."

The government intends to establish an independent panel made up of members of “the news and journalism community” to consult on the measures, and to help define who is eligible for this tax credit. The industry is waiting for more information on who will form that panel.

“It’s a critical question: Who is at the table? Is this representing established outlets as well as new outlets?” said Erin Millar, founder and CEO of Discourse Media, which offers digital news covering underserved communities. Its first three communities of focus are B.C.'s Cowichan Valley region; the east end of Toronto; and the urban Indigenous population of the greater Vancouver area. “We need to ensure that this [funding] is diversifying the media industry, both who is in newsrooms and the communities that are being served. If all we are doing is growing the same system that is not addressing the full spectrum of Canadians, then we are not moving forward.”

Access to charitable donations was a highly anticipated step, particularly for Montreal’s La Presse, which transformed to a non-profit business model earlier this year. The outlet is about to do a roadshow with prospective large donors to ask for support.

“This is absolutely going to help,” said La Presse president Pierre-Elliott Levasseur. The French-language news organization recently announced it will cut 37 jobs as it navigates its transition. The combination of donations and support for labour costs “gives us room to breathe,” he added.

The Globe and Mail filed an application this year to create a charitable foundation that could help support additional resources for reporting projects.

“It potentially expands the scope of our journalism,” publisher Phillip Crawley said.

Postmedia is investigating the possibility of setting up a charitable foundation, Mr. Godfrey said, which could "support and strengthen the content” of papers such as the National Post.

In addition to the money for tax credits and the expanded charitable status, the government announced new details on the $50-million to support local journalism over five years, which it disclosed in the last federal budget. Wednesday’s update stipulated that this funding will go toward not-for-profit groups that provide “open-source content” that can be used by local news outlets for free.

News Media Canada would like to work with partners to set up an entity to manage that money, along with The Canadian Press, the Aboriginal Peoples Television Network and the Coalition pour la pérennité de la presse d’information au Québec, which could hire more reporters to provide news content to local outlets as a kind of free wire service, Mr. Hinds said.

Some in Canada have questioned the wisdom of using government money to support the employment of journalists, many of whom act as watchdogs of government.

“It’s a very valid question,” said Edward Greenspon, a former editor-in-chief of The Globe and Mail and president of the Public Policy Forum that suggested a number of measures to support the news industry in its “Shattered Mirror” report last year. “I’d rather not have government money coming to the news business. But I’d rather make sure that there are still journalists who are working, and it doesn’t seem to me that a bankrupt press is a free press.”