Quebec newspapers want government help to shift to digital

A stack of newspapers. MARTIN BUREAU/AFP/Getty Images

Several Quebec newspaper publishers have formed a coalition to demand short-term financial support from the provincial and federal governments to help them shift to digital.

The coalition representing 146 newspapers said its members are confronting declining revenue, in part because advertising spending has flowed toward social media platforms.

“We believe we are living in a perfect storm right now,” said coalition member Brian Myles, director of Montreal’s Le Devoir newspaper.

It is asking the province to set up a five-year temporary financial assistance program for newspapers which includes a refundable tax credit covering 40 per cent of the production costs including journalist salaries and 50 per cent of their investments in digital platforms.

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“We’re stuck between a rock and hard place because we need to secure our future and the future will be digital, but we lack the oxygen or the funding to fully implement our digital strategy,” Myles said.

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The coalition also seeks the abolition of the sales tax on newspapers and an exemption from a curbside newspaper recycling tax that has increased by more than 1,000 per cent since 2006.

Most of the same requests will be made to Ottawa when Myles, Groupe Capitales Medias owner and former federal cabinet minister Martin Cauchon and Torstar (TSX:TS.B) chairman John Honderich testify Thursday before a parliamentary committee studying the industry’s future.

Groupe Capitales Medias president and CEO Claude Gagnon said the coalition will be asking for the same kinds of tax credits that the television and movie industries have enjoyed.

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The coalition wants changes to the copyright laws to protect the unlawful use of an author’s work, especially on the Internet.

It is also seeking a “significant increase” in the federal and provincial government spending on advertising in Quebec newspapers, which has plummeted in the last decade.

Gagnon said the country faces a bigger crisis for jobs in an industry that supports democracy if governments don’t get involved and take quick decisions.

“Why do we help companies that set up here in Canada from all over the world but we aren’t able to do it for our companies that have existed for hundreds of years and which have always been the eyewitnesses of what’s happened in each of the regions of Canada,” he said in an interview.

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Quebec’s two large French-language daily newspapers – La Presse and Le Journal de Montréal – aren’t members of the coalition and didn’t respond to requests for comment.

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Although the Montreal Gazette isn’t part of the Quebec coalition, parent company Postmedia is working with a national newspaper organization seeking change, Gazette editor Lucinda Chodan said.

In May, Postmedia CEO Paul Godfrey told a Commons committee that Ottawa needs to help.

He pointed to federal statistics showing government advertising in newspapers was halved between 2010 and 2015, while online advertising nearly doubled to foreign-owned companies like Google and Facebook.

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