Politics And Policy Dec 22, 2018 10:16 AM EST

KENT: Liberals’ $600 million media bailout lacks depth, fails to solve core problem

Peter Kent discusses the problems with the federal governments recent media bailout.

KENT: Liberals’ $600 million media bailout lacks depth, fails to solve core problem
Peter Kent Montreal, QC
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This article was published more than 1 year ago, information might not be accurate.

Disclosure: Peter Kent worked in media for over four decades and is the current Conservative MP for Thornhill. A year-end question for Canadian information consumers: Are the Trudeau Liberals really serious about meaningful assistance for Canada’s struggling news organizations? Or, is the close to $600 million dollars now promised ($50M in 2018 budget, $595M in 2018 Fall Economic Statement), merely a cynical, election-year attempt to buy-off media owners and publishers? There is stark disagreement between owners/shareholders and those who actually generate news content.


A quick time-out here, for me to establish my journalistic credentials as a late-life politician; I grew up and prospered in the golden days of 20th Century conventional media. After arriving in Canada from WWII England (I was born in a Canadian Army hospital in Sussex, to Albertans serving in the Army and Army Medical Corps), my father went to work for the Southam newspaper chain (Ottawa Citizen, Medicine Hat News, Calgary Herald, etc). I grew up with the smell of hot lead, clanking linotype machines, and the wonderful roar of presses. I was fortunate to spend 45 years as a working journalist in radio, television and newspapers. I worked for CTV, Global, CBC, NBC and Monitor Television. I anchored CBC's The National for a couple of years in the mid-1970's (before being assigned/exiled abroad for successfully challenging Trudeau government interference in CBC editorial decision-making).

Reaction from the media

Back now, to the stark disagreement over the bail-out between boardroom and newsroom. News organization CEO’s and publishers who draw million dollar plus salaries and equally outsized bonuses are delighted. Postmedia CEO Paul Godfrey exclaims, “Everyone in journalism should be doing a victory lap around their building right now.” But, I agree, passionately, with respected journalists like Paul Wells, Andrew Coyne, Chantal Hebert, Terry Corcoran and a host of others, who reject the Liberals’ bail-out as an unacceptable intervention that will compromise the independence of their craft. I share their opposition to the Liberal proposal of a “panel” of “news experts” who would distribute the election-year beneficence by deciding which newsrooms are “credible” and worthy… and which newsrooms aren’t.

The transformation of media

The Canadian news industry isn’t disappearing. It is being transformed from conventional print and broadcast forms to digital platforms. To my mind, struggling conventional organizations will survive only with public policy adjustments that will reset and level the playing field for private sector newsrooms. Finance Minister Morneau can’t justify his $600M+ bail-out because he has no idea what will happen after his subsidized transition period. That’s unacceptable, because intervention should have a goal of not only short-term survival but long-term sustainability. Some elements of the Liberal bail-out plan may work in the short-term.  The “not-for-profit” La Presse model might work, without direct government funds. But, no one knows the eventual extent of the refundable charitable tax credits.   Direct cash subsidies to community newspapers might work temporarily, depending on the dollar amounts and the way individual publishers spend the windfall. But, a long-term solution demands more fundamental adjustment of the media marketplace.

The CBC problem

I believe Canada needs a national public broadcaster. But Canada - and the independent, private-sector news industry - do not need a “semi-private” public broadcaster. It is time to re-size and de-commercialize the CBC and send the $300 million to half a billion dollars in annual advertising revenues into the private sector marketplace. At the same time, the CBC should not be misappropriating the $150 to $200 million dollars annually that it is using to build the dominance of its digital platforms. The CBC is now the largest digital newspaper in Canada, by far.  And, the CBC digital platforms scoop another few hundred million dollars in ad revenues from the marketplace every year. The Liberals are proposing $600 million + over five years. But, over those same five years, the CBC might spend about $1 Billion of its Parliamentary appropriation to compete against the same private media. And, the CBC gives its content (much of which re-written or “scalped” content from the private sector) away… free. Any successful, survivable transformation of conventional mainstream news media will depend on news organizations building profitable digital platforms. If the CBC is to be allowed to continue to dominate digital news gathering and content generation without a pay-wall, then I would suggest that content should be available, without cost, to all private media organizations (as a public service).

A way forward

And, then there are the foreign digital platforms – Facebook, Google, Amazon and the other data-opolies. There is no reason Canadian digital advertisers should now not be included in Section 19 of the Canadian Income Tax Act which provides that expenses paid to advertise in conventional non-Canadian print or broadcast news publications are non-deductible. The same regulation should apply to the estimated $500 million dollars annually placed by Canadian advertisers on those foreign digital platforms. The transformation and survival of robust, independent journalism platforms in Canada will require bold policy adjustments and political leadership. But, how can news organizations by truly independent if they become dependent on government subsidies, temporary slush-fund tax relief, or direct cash bailouts?

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