The government of Ontario recently directed its Crown corporations to spend one-quarter of their advertising budgets with local media. The umbrella group that represents traditional media, News Media Canada, is encouraging other provinces to follow suit.
This support is nothing new or unique.
Over decades – indeed, going back nearly 250 years – government assistance of media through advertising has been common, mainly because it has been an effective way to convey relevant public information. Postal subsidies aren’t new, either, because there has been a general recognition that publishers shouldn’t – and couldn’t – pay the going rate, considering the value of what was being conveyed.
There isn’t a business alive that doesn’t qualify for tax treatment that most individuals would consider preferential. Corporate income tax rates are lower, and businesses can write off capital and operating expenses, depreciate assets to mitigate taxes, and write off the interest on their loans. Countless industries benefit from specific sectoral subsidies; media are simply in on the ride now, and it carries considerable controversy.
In recent years, the federal government began subsidizing journalism salaries. Most media in this country benefit from a labour tax credit for newsroom employees: up to 35 per cent of salaries, with a ceiling of anyone making $85,000 annually, meaning a subsidy of up to $29,750. And under recent federal legislation, Google now furnishes $100 million annually to media, disbursed by an independent media collective, under its exemption from a federal law that requires mandatory agreements with publishers.
Of course, there are also public broadcasters – the CBC and provincial broadcasters like B.C.’s Knowledge Network – with a mixture of public and private revenue sources. They’re no small competitors for local media revenue.
Media is a different business – a business with a soul, it’s often called – that earns trust through its objective methods to pursue the truth, operate independently, minimize harm and hold institutions (and themselves) accountable.
Speaking as a journalist, and not as someone who has to worry about the balance sheet, our occupation is placed in an uncomfortable situation with the labour subsidy. It creates in some minds a perceived conflict of interest and the appearance of the financial backing of Prime Minister Justin Trudeau – and the appearance that the support comes with a price on independence and fairness in reporting. People have always squawked about soft media coverage of governments, but these days any story that doesn’t tackle Trudeau comes under withering criticism as evidence we are in his pocket.
It is more accurate to say journalists are at his – and others’ – whims. Senior governments particularly, and local governments often, have developed sophisticated, well-financed systems of controlling how information is managed and meagrely disclosed. They’ve largely cocooned public servants so they no longer speak directly to reporters. They’ve resorted to emailed “statements” through communications departments or ministerial offices instead of in-person quotes, mainly to ensure every syllable does not step off the message track. They require journalists to use freedom of information law to get the most routine records. They often employ former journalists to manage this system, which is doubly galling.
There have been significant increases in the workload of a typical journalist, due mainly to the reduction in the size of newsrooms, due mainly to the decline in advertising revenue. Google and Facebook carry more than 80 per cent of the country’s online advertising, using those tech stacks to help advertisers target specific audiences for their goods and services.
This cheaper delivery system has undercut print and broadcast advertising. The impact has hurt disproportionately at a local level, where there is a smaller base of business. The business of local media has been looking for a way out of the woods for some time now, and durable answers escape the industry.
What’s clear is that it isn’t possible to reverse the advertising losses that the tech giants gained, so media need new sources of revenue to pay for journalism. Communities say they want and need an accurate, thorough source of local information. But because so many online sources are free for the taking, it’s difficult to get consumers to pay for journalism. Thus, at this challenging economic crossroad as it sorts out the business solution, the industry has little choice but to turn to government – at least temporarily.
Which is why governments – and politicians of all stripes – should favour policies that support local businesses like hometown media, not the far-flung tech giants, if they’re going to spend to promote their non-partisan activities. Provided it’s done at arm’s length, Ontario’s approach would be a reasonable strategy here to encourage new and existing media with a greater chance to sustain.
Kirk LaPointe is a West Vancouver columnist with an extensive background in journalism. His column runs biweekly in the North Shore News.
