Business & Finance

Trudeau government’s $600 million media bailout unacceptable: Conservative ethics critic

As struggling establishment media and upstart news organizations have been promised $600 million in tax breaks by the Trudeau government, few details are known about a government-appointed panel that will mete out the largesse.

Jason Unrau Montreal, QC
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As struggling establishment media and upstart news organizations have been promised $600 million in tax breaks by the Trudeau government, few details are known about a government-appointed panel that will mete out the largesse.

According to Budget 2019, benefaction would be based on the panel’s determination of whether applicants constitute a Qualified Canadian Journalism Organization, but former broadcaster and Conservative MP Peter Kent said the government should not be in the business of ranking news media for handouts. Kent is also the ethics critic for the Conservative party.

“We’ve heard from some of the most respected members of the craft who are opposed, and highly critical of government getting involved in this sort of direct subsidy to what is supposed to be an independent estate,” said Kent. “From top to bottom it smells. It’s simply unacceptable.”

PostMedia, publishers of the National Post and Sun papers is currently struggling under nearly $300 million in debt while The Globe and Mail and Torstar – Toronto Star – have scaled back their newsrooms significantly. In 2017 Postmedia and Torstar traded 41 publications in a deal to shut down 36 mostly community papers in smaller markets where they compete with a loss of nearly 300 jobs.

New Democrat MP Pierre-Luc Dusseault said closures like this are detrimental for places not covered by legacy media’s bigger papers and that the tax breaks should be targetted there.

“I think it’s needed to help media, to help people having credible and good information across the country,” said Dusseault. “One of the problems with the media having financial difficulty is some regions of the country don’t have quality information about their region, their economy and their community.”

And what of a government-appointed panel deciding which media can qualify?

“The best thing is to make it as independent as possible from government so decisions are made without any political or partisan consideration,” said Dusseault. “I think they need to make sure there’s this independence. It’s fundamental.”

The New Democrat’s deputy Finance critic also believes the government needs to consider its own advertising policy – last year the federal government bypassed traditional media and spent nearly $25 million on Google and Facebook advertising.

“Right now all this advertising is flying to these companies in the United States, so I think that’s one way to help Canadian media companies is to make sure everyone is on the same level,” said Dusseault.

From Kent’s perspective, fairness in the marketplace would also include constraints on CBC and Radio Canada; proverbial elephants in the media bailout room. Kent said the public broadcaster’s $1.2 billion annual budget – a direct contribution from the public purse – has been quietly shifted from its television and radio platforms, to producing online print news.

“The CBC won’t admit it, but there’s evidence that close to 20 per cent of that money has been redirected, without mandate, to CBC and Radio Canada’s digital platforms,” said Kent. “Where they not only sell advertising as they do on their broadcast platforms, but they are in direct competition with traditional mainstream print publications that are trying to make that transition. It’s simply not a level playing field.”

According to Budget 2019, “qualified” outlets can also receive a 25 per cent tax break on salaries while news consumers can claim a 15 per cent tax credit for online subscriptions. To be considered for these tax breaks – either as a subscriber or an outlet – the news organization must be 75 per cent Canadian-owned and have a similar percentage of domestic board members.

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