The print media need extra sources of federal funding, as well as a new deal with foreign internet companies, to survive the economic shock brought on by the COVID-19 pandemic, the publisher of The Globe and Mail has told MPs.
In a video appearance before the finance committee of the House, Phillip Crawley said the public-health crisis has contributed to the continuing decline in advertising revenue, which jeopardizes the ability of news organizations in Canada to provide high-quality content on major issues facing the country.
“Let’s be clear, the long-term outlook for The Globe and many others has darkened because of the pandemic. Print-advertising revenue – once the backbone of newspapers – will go into accelerated decline,” Mr. Crawley said.
He added that The Globe has forgone potential revenue during the crisis by providing free access to news stories and columns on the novel coronavirus instead of putting them behind its paywall.
“That means we sacrificed revenue, but we built trust with our audience. In the current climate, being able to rely on accurate information is the key priority for many Canadians,” he said.
Mr. Crawley said The Globe has fared better than other newspapers because it relies relatively less on advertising and more on subscriptions. Still, he asked for increased federal advertising in newspapers, a rebate on printing expenses and a subsidy on the cost of using the national news agency, The Canadian Press.
In addition, Mr. Crawley called for a fix to the rule that allows advertisers not to pay sales tax on ads that appear in Canada on foreign digital platforms such as Google and Facebook. He said this gives U.S. giants an unfair advantage. Mr. Crawley said the government could make such a change more quickly by using its convening powers to “bring the parties together” to negotiate a deal rather than drafting and passing new legislation. In addition to addressing the sales-tax issues, he said any deal should also require the internet companies to provide funding to Canadian news media.
Unifor president Jerry Dias backed the call for a greater contribution from foreign platforms to the Canadian news industry, saying Ottawa needs to follow the lead of other countries.
“They take what is written by newspapers, by conventional media, they post it, but don’t pay anything for it,” he said. “You can’t have a thriving democracy, which we’re very proud of here in Canada, if you don’t have a thriving media.”
Heritage Minister Steven Guilbeault said the federal government is well aware of the financial challenges facing Canada’s media industry. While looking to preserve the principle of editorial independence, Ottawa is studying the efforts of other governments to get digital platforms to provide funding to news organizations.
“In recent years, there has been a sudden shift in advertising spending and the Canadian newspaper industry has seen its advertising revenues eaten away by web giants. As such, we are following with great interest what is being done abroad to establish a fairer sharing of revenues between content producers and online platforms, notably in France and Australia. This is informing our own reflection as to what could be done in Canada,” Mr. Guilbeault said in a statement.
Bloc Québécois MP Alexis Brunelle-Duceppe urged the federal government to rapidly ramp up its ad spending in local and national media to compensate for dwindling revenue from private-sector advertisers.
“We have the impression the government has let them down,” Mr. Brunelle-Duceppe said.
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