The Canadian Heritage Ministry admits that a half-billion dollar bailout to mainstream media and other newspapers did not create jobs as promised.
Despite the massive subsidy, staff counted a continued net loss of thousands of jobs. The findings contradict what publishers said, who claimed increased readership throughout the COVID-19 pandemic, according to Blacklocks.
"The decrease in advertising revenues caused by the COVID-19 pandemic led to service reductions and newspaper closures resulting in the loss of more than 2500 jobs," said a briefing note Improving Federal Support For Journalism. The department said it knew of "the hiring of 342 journalists" but only because wages were subsidized 100 percent under a $50 million Local Journalism Initiative.
Parliament in 2019 passed amendments to the Income Tax Act awarding a total of $595 million to cabinet-approved media on a promise of job creation.
"The total amount planned, $595 million over five years, is commensurate with the industry’s current needs to preserve journalistic jobs both for print and digital newspapers that are still operating in Canada," Pascale St-Onge, president of the Fédération Nationale des Communications, said in 2019 testimony at the Commons finance committee.
The bailout included 15 percent tax credits to subscribers of media designated by the Canada Revenue Agency as "qualified Canadian journalism organizations" and 25 percent-a-year payroll rebates to a maximum of $13,750 per newsroom employee. Media executives who successfully lobbied for federal aid had promised to create jobs. "These measures have been called a bailout by some," testified Bob Cox, publisher of the Winnipeg Free Press. "I would suggest this crowd knows very little about the business of operating a newspaper." The corporation that owns the Free Press last year received a total of $6.2 million in aid, including wage subsidies and payroll rebates, the equivalent of 54 percent of its net income.
"We have been working for a long time to set up a program to support professional journalism," said then-Culture Minister Pablo Rodriguez: "The loss of even just one job is a tragedy." In recent years, 41 daily newspapers have disappeared, and 10,000 jobs have been lost, indicating a "crisis" for the struggling industry.
The heritage department briefing note also detailed unannounced changes to a subsidy program for magazines called the Canada Periodical Fund. Staff will waive a requirement basing grants on actual readership. "From 2021 the funding provided will gradually shift from rewarding print circulation to rewarding investment in editorial and journalistic content," said the note, which did not elucidate further.
Grant recipients have included Canadian Living magazine which received $1.5 million a year, Maclean's at $1.2 million, Reader's Digest at $1.1 million, Chatelaine magazine at $794,000, Toronto Life at $506,000, and the United Church Observer at $339,000.
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