March 21, 2019 9:21 pm
Updated: March 25, 2019 10:27 pm

Federal government’s journalism plan prompts praise from newspapers, criticism from broadcasters

WATCH: Bill Morneau presents budget in House of Commons

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The federal government’s plan to help cash-strapped journalism organizations is generating mixed reactions.

While the newspaper industry has applauded the $595-million, five-year funding commitment, a group representing Canadian broadcasters says it’s unfair.

READ MORE: Who are the winners and losers in the 2019 federal budget? Here’s what you need to know

The Canadian Association of Broadcasters (CAB) says TV and radio stations are excluded from the funding criteria, and called on the federal government to address it.

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“Our members right across Canada in all markets compete with print journalism, so for us it’s just a matter of equity,” said Lenore Gibson, chair of the board for the CAB.

She said the funding proposals would “solve the problems of one medium at the expense of another.”

On Friday, the CAB sent a letter to Finance Minister Bill Morneau and Heritage Minister Pablo Rodriguez, in which it expressed “huge disappointment” in the move and requested a meeting to discuss the issue.

In the letter, the CAB noted that “far more Canadians obtain their news from Canadian broadcasters than Canadian newspapers.”

The letter stated that Morneau’s budget did not provide a rationale for excluding broadcasters from the tax credits.

It also said the decision to exclude broadcasters “makes no apparent public policy sense” in part because it favours a print-based journalism model over a broadcast model and because it fails to recognize that broadcasting, like print, is suffering from falling revenues and profits.

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The CAB’s members include stations owned by Corus Entertainment, the parent company of Global News.

The government announced three initiatives aimed at supporting the news industry in the fall economic update, and provided more details in Tuesday’s budget.

In order to be eligible for funding, media outlets must be a qualified Canadian journalism organization, the budget states. An independent panel will be established to recommend the eligibility criteria.

READ MORE: Tax credits for news subscriptions among Liberal plans to boost struggling newsrooms

The biggest initiative is a refundable tax credit the government expects will cost $360 million. Qualified Canadian journalism organizations will be able to claim a 25 per cent credit on the salaries or wages paid to eligible newsroom employees, subject to a cap of $55,000 per employee for a maximum tax credit of $13,750 per year per eligible employee.

According to the budget, organizations “carrying on a broadcast undertaking” will not qualify for the tax credit, neither would publications receiving money from the Canadian Periodical Fund.

READ MORE: Federal budget 2019 coverage 

In a separate initiative, subscribers to Canadian digital news will be able to claim a 15 per cent tax credit on their purchase for a maximum tax credit of $75 per year. The rebate applies to subscriptions from qualified news organizations “primarily engaged in the production of written content​.”

And third, qualified Canadian journalism organizations will be able to apply to fall under a new category of tax-exempt qualified donee, allowing them to issue charitable tax credits or donation deductions.

WATCH: How the 2019 budget can benefit you

The CEO of News Media Canada, which represents more than 800 newspapers, said these measures aren’t a silver bullet, but will make a big difference.

“I think it’s a significant investment in the industry and I think it will go a long way to ensuring that particularly small town papers continue to be able to do what they need to, and I think what Canadians expect them to do, which is cover local news,” John Hinds said.

For more than two decades, the web has posed a significant challenge to the news industry’s business model. Newspapers in particular have been hit hard by downsizing prompted by dwindling ad revenues, lower subscription numbers and other effects of digital disruption.

READ MORE: Tax credits for news subscriptions among Liberal plans to boost struggling newsrooms

The FRIENDS of Canadian Broadcasting described the decline in the industry as a “death spiral,” and said the federal government’s plan doesn’t address tech giants’ siphoning of advertising dollars from traditional media organizations.

“Platforms like Facebook are displacing Canadian journalism, but not replacing it,” executive director Daniel Bernhard said in a statement earlier this week. “[Prime Minister Justin] Trudeau is paying lip service to the importance of journalism and democracy while quietly siding with companies like Facebook that pollute our democracy.”

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The government’s plan has also generated considerable debate over whether accepting the money represents a conflict of interest for media organizations.

Last fall, the Conservatives accused the Liberals of trying to curry favour with journalists ahead of the election.

Some pundits have argued the move would diminish the credibility of news organizations — and the independent panel process would be open to favouritism.

“No newspaper publisher should have anything to do with this plan,” National Post columnist Andrew Coyne wrote last fall. “And no journalist worthy of the name should go anywhere near that accursed panel.”

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Hinds said that while it may be a hot topic in Ottawa, there are hundreds — if not thousands — of Canadians journalists whose work doesn’t involve federal politics. And the government, he noted, is already involved in regulating and funding media.

“I mean, the [Canadian Radio-television and Telecommunications Commission] is a federal agency that licenses broadcasters, they impose certain standards on them,” he said. “We have the CBC, which is federally-funded. We have magazines, which are supported by the periodical fund. We have local broadcasters, which are supported by the local journalism fund.”

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Gibson said there is evidence the public wants the government to step in, pointing to a 2017 Nanos poll that found that 54 per cent of Canadians want the government to support local news.

“Certainly Canadians seem to agree with the objective of keeping local news alive and providing support to Canadian journalism institutions,” she said.

— With files from Amanda Connolly, Global News

© 2019 Global News, a division of Corus Entertainment Inc.

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