The Toronto Star is expected to announce on Friday that it intends to close its main printing plant in the Greater Toronto Area, The Globe and Mail has learned.
The 3.2-hectare printing centre in Vaughan, which sits near the junction of Highway 400 and Highway 7 north of Toronto, opened in 1992 at a cost of $400-million, and was considered state-of-the-art at the time.
But as print advertising revenue continues to decline steadily, and the Star invests heavily in its digital journalism, the newspaper's parent company, Torstar Corp., is exploring an outsourcing arrangement that would allow it to close the facility. Though it is not clear when the plant would shut its doors, the company is understood to have had talks with Transcontinental Inc. about possibly contracting out the paper's printing, according to information from sources familiar with the plans.
"It is our policy not to comment on rumours," a spokesman for the Star said on Thursday.
The general manager of Torstar Printing Group, Dean Zavarise, also said that "we don't respond to rumours" when reached by telephone. Neither the Star's publisher, John Cruickshank, nor a spokesperson for Transcontinental returned requests for comment.
For several years, Torstar had an agreement to print some copies of the National Post at the Vaughan plant, but it recently lost that contract. As of Jan. 4, the national paper shifted its printing to a west-end Toronto plant that its parent company, Postmedia Network Canada Corp., acquired when it purchased Sun Media assets last year.
With print in decline, the Star has made a major investment in its new tablet edition, called Star Touch, which was built through a partnership with French-language daily La Presse, and launched last September. The Star was impressed by the promise of La Presse's own tablet product, La Presse+, which it says has 520,000 weekly readers and gave the Montreal-based paper the confidence to scrap its weekday print editions at the start of the year.
The Star has maintained it has no similar plans to get out of print. "We still have a very healthy print product," Mr. Cruickshank said in a September interview about the launch of Star Touch.
The Star has set a goal of attracting 180,000 daily tablet readers by the end of 2016, and said in mid-November that the Star Touch app had been downloaded more than 100,000 times in its first two months. Staff were told that readers were spending about 18 minutes per day, on average, reading in the app. But the Star did not say how many readers were opening the tablet edition on a daily basis.
And although the Star says it has reordered its newsroom to publish with a digital focus, online platforms are not yet a major source of revenue. Across Torstar, which also owns the free daily Metro papers and local titles, such as The Hamilton Spectator, digital dollars made up less than 14 per cent of total revenue in the first nine months of 2015.
Torstar also prints and distributes flyers, but revenue from that business has been declining, largely due to a few major retail customers closing. Those declines have been partly offset by price increases.
In December, The Globe and Mail reached an agreement to adjust the terms of its contract with Transcontinental, reducing future payments for printing in four of The Globe's five national markets, and paid a $31-million fee in return.