The Globe and Mail asks Trudeau government for more bailout money

The Globe and Mail asked the government for more federal aid yesterday following significant revenue losses, according to Blacklock’s. Details of the finances were provided by publisher Phillip Crawley.

“The Globe is forecasting a drop of 32 percent year on year in print advertising,” Crawley said while at the Commons finance committee. “That’s many millions of dollars of high-margin revenue, and we won’t be the biggest victims in Canada.”

“We’ve been cutting costs over the last few months to minimize layoffs and I have suggested schemes to the Department of Canadian Heritage like a rebate on our printing costs,” noted Crawley who did not say whether the paper was profitable.

Postmedia network also struggled with a reported $6.3 million net loss last year. Torstar Corporation saw a loss of $51.9 million for the year.

The Globe had 110,000 print subscribers and 120,000 digital subscribers, according to Crawley and it wasn’t able to qualify for the federal Canada Emergency Wage Subsidy even with the dropping revenues. For companies that see a gross revenue decline of thirty percent, the pandemic relief program—worth $76 billion—pays as much as $10,164 per employee.

“Because only a third of our revenue comes from advertising, the consequence is we did not qualify,” Crawley said, “Postmedia stated they expected to receive $20 million to $22 million in wage subsidies from March 15 through to June 6th. Torstar, the second largest group, expects to collect $18 million.”

“This is welcome and substantial assistance from the government, but let’s be clear: The long-term outlook for the Globe and many others has darkened because of the pandemic,” he added. “Print advertising revenue, once the backbone of newspapers, will go into accelerated decline.”

The Income Tax Act was amended by parliament in 2019 to grant a payroll rebate to certain newspapers like the Globe. The rebate was up to $13,750 for each newsroom employee coming under a bailout of $595 million. Last year, the Globe also received a sole-sourced contract worth $2,005,847 from the Department of Public Works for news clipping.

On March 25, Cabinet promised $30 million to publishers in advertising related to the pandemic. Crawly said the Globe had only received $81,000 of the spending so far.

“By contrast, the Ontario government has spent nearly $1.5 million with the Globe & Mail in the last two months on its health awareness campaign, and that was a deal done within twenty-four hours and implemented immediately,” Crawley said.

“What more immediate support can our government be providing to Canadian media today?” asked Julie Dzerowicz, a Liberal MP.

“Everybody has printing costs,” responded Crawley.

“For me, I sign a bill every week for about a million dollars for printing,” said Crawley. “If the government was to step in and say, ‘We’re going to help with your printing costs’, every newspaper in the country could benefit.”

The Globe’s appeal was endorsed by Unifor national president Jerry Dias when testifying at the Commons finance committee yesterday.

“The whole issue with media, simply put, there’s been about 250 local newspapers that have closed in the last ten years,” said Dias.

“We know there’s going to be a wholesale wiping out of the industry if we don’t do something,” said Dias. “You can’t have a thriving democracy that we’re very proud of here in Canada if you don’t have a strong media. There’s a lot that has to be done.”