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Postmedia President and CEO Paul Godfrey is pictured in his Toronto office in January, 2016.Chris Young

Measures in the federal budget to support journalism in underserved communities are a disappointment, some industry representatives say.

"It doesn't really address the current problem that we have," John Hinds, president and chief executive officer of industry group News Media Canada, said of Tuesday's budget, which pledged $10-million a year over five years to support local media.

The funds, which will be handed out by one or more independent, non-governmental organizations, are far less than some had proposed. News Media Canada had asked the government to provide $350-million to a revamped Canadian Periodical Fund and to open up eligibility for that fund to more publications. The funding in the budget is "a very small number," Mr. Hinds said, adding that he is concerned that it is earmarked for communities where newspapers have shut down rather than to support existing news outlets that are struggling.

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"This is most disappointing, and somewhat insulting when you consider all the time we've wasted making appearances in front of commissions they've set up," Postmedia Network Canada Corp. CEO Paul Godfrey said. "Continuing to ignore us means more job cuts, more closures and more anguish."

Approximately 16,500 jobs in the media sector have been eliminated since 2008, according to the Canadian Media Guild. Nearly half of those are in print media; 36 per cent are in broadcasting and 17 per cent are in digital and other forms of media. Heritage Minister Mélanie Joly has said that the government does not want to "bail out" media companies that are no longer viable.

"We're not looking for that," Mr. Godfrey said. "We're looking only to fund the journalism aspect of it: not advertising, not distribution, not promotion, not executive salaries, not executive bonuses."

In the past 10 years, 238 local news outlets have closed their doors, according to Ryerson University professor April Lindgren, who runs the Local News Research Project. Of those, 212 were newspapers that were either closed entirely or closed due to mergers. The remaining 26 closures were TV, radio and digital outlets.

"If the $50-million is going to be used just as a direct subsidy to reduce operating costs, it may keep a few local operations alive for a while but they will go under once the funding comes to an end," Prof. Lindgren said.

The budget's second measure for the media industry was greeted with more optimism: The government announced that it would explore the idea of granting charitable status to news outlets, which would allow them to fund their journalism through tax-deductible donations.

"To me it's pretty clear that there would be individuals, there would be foundations, who potentially would say, 'We like that,'" said Phillip Crawley, publisher of The Globe and Mail. "The industry at large, as we all look around and see what's happening in other parts of the world, that's one of the examples where we say, why can't that happen in Canada?"

Non-profit newsroom ProPublica reported US$28.3-million in revenue in 2017, with contributions from more than 34,000 donors. In 2016, already in the midst of a global expansion, British news outlet The Guardian created a non-profit arm in the United States,, which attracted early support from philanthropic organizations including the Skoll Foundation and the Conrad N. Hilton Foundation. Last year, The New York Times also announced a new philanthropic initiative to attract funding.

Existing crowdfunding campaigns run by small news organizations in Canada, such as Vancouver-based Discourse Media, show that there is a willingness here to contribute to newsrooms whose work people believe in, Prof. Lindgren said.

"It has the potential to engage the audience and re-engage people with local news organizations."

"It's the one aspect that we're very pleased about," Mr. Hinds said. "Canadians want and value civic journalism and local stories. Being charitable gives it that extra push. It also allows existing owners to transition properties without shutting them down."

That could include allowing community groups or civic foundations to take over the operations of a local newspaper that is no longer profitable, he said. Charitable status could also open up the possibility for funding individual staff positions within existing newsrooms.

"I give credit to the government in being open to this," Mr. Hinds said.

However, Mr. Godfrey cast doubt on how much support would come from donations.

"There are so many charities around," he said. "Who would you rather give to, SickKids Hospital or Postmedia and Torstar?"

The government has not responded to a proposal from groups including News Media Canada, that advertising by Canadian companies on foreign-owned websites should no longer be tax deductible. Under Article 19 of the Income Tax Act, advertising expenses directed to foreign publications or television stations are not deductible, providing an incentive to advertise with Canadian entities. Some have argued that the same rule should apply online; currently, companies can deduct online advertising expenses whether or not the website is Canadian. Advocates have said that changing the rules would provide a "level playing field" for Canadian media companies in competing with digital giants.

"Google and Facebook own the advertising market that used to sustain Canadian news outlets," Jerry Dias, national president of Unifor, said in a statement. Unifor represents media workers at various outlets including The Globe and Mail. "The government can't just watch while local newsrooms disappear."

As expected, gender equality was a major theme of the 2018 federal budget. The budget includes new measures aimed at encouraging greater participation of women in the work force, along with a program to encourage more men to take paid parental leave.

Follow Susan Krashinsky Robertson on Twitter: @susinskyOpens in a new window

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