By Peter Menzies
July 9, 2024
On May 6, 2024, the Macdonald-Laurier Institute hosted a forum involving news organizations, academics, policy-analysts and others to discuss the Canadian news industry’s rapidly growing dependence on government and the risk it poses to democracy.
The purpose of The Future of News event was to generate ideas that contribute to the development of a national news industry policy that ensures a free and independent media. (For those that missed out on the event, a detailed summary of the conference can be found as an appendix to this report).
Such a series of linked policies would be based on the need to eliminate rational criticism that the nation’s media depend upon and kowtow to government.
As a new poll conducted for The Hub by Leger and Leger indicates, the public opposes government funding of media. A majority of respondents also view media in a negative light, which exacerbates the public’s trust in the news industry:
- Only 7 percent of Canadians trust the Canadian media completely to make decisions in the best interests of the public while 15 percent completely distrust media and 49 percent only trust the news “somewhat.”
- Only 4 percent say they are aware of the funding legislation for media.
- Seven-in-10 oppose funding journalists’ salaries.
What are the prime takeaways? That Canadians overwhelmingly oppose government funding of journalists; that a majority distrust the media; and that most Canadians have no idea how deeply dependent the legacy/mainstream media is on government handouts.
What’s needed is a new approach that restores public trust by ensuring media independence and sustainability.
Background
On June 7, 2023, the Macdonald-Laurier Institute published a public policy paper entitled “…and now, the news” – a national news policy for Canada. Authored by Peter Menzies and Konrad von Finckenstein, the paper explored the far-reaching impacts of technological change on the Canadian news ecosystem.
The authors didn’t claim to hold all the answers for the future of journalism. However, they did recommend concrete steps that could form the basis for future discussions – while also explaining in-depth why current ad hoc approaches are, ultimately, economically and ethically unsustainable.
The Future of News event was an important step in what is meant to be an ongoing discussion.
However, in the meantime, much has occurred to further entrench news media’s dependence on government – a situation that poses an existential threat to freedom of the press.
In summary:
- In response to the federal Online News Act, Meta no longer permits corporations or individuals to post news links for free on Facebook and Instagram. Meta estimated the value it provided to the Canadian news industry at $230 million. While there is no independent verification of that estimate, it has not yet been debunked. Publishers at The Future of News event (held under Chatham House Rules) confirmed Meta’s decision substantially hurt the Canadian news industry.
- The Online News Act also prompted Google to cancel its commercial agreements with the Canadian news industry and, in a last-minute deal with the government, replace those with a $100-million fund to be distributed to organizations that meet certain government-determined criteria, with money disbursed on a newsroom-employees-per-capita basis. The CBC is capped at $7 million and licenced television and radio broadcasters at $30 million. In exchange, the Canadian Radio-television and Telecommunications Commission (CRTC) is responsible for approving Google’s exemption from the Online News Act.
- Both the Local Journalism Initiative (LJI) and the Journalism Labour Tax Credit were introduced in 2019 as temporary, five-year programs worth $10 million and $119 million annually respectively, and intended to give the industry time to adapt to technological change. Rather than expiring in 2024, both have doubled in size and been extended – it appears permanently – so that they are now worth an estimated $260 million annually.
- Flush with federal funding for its members, News Media Canada, the lobbying arm of corporate Canadian media, is now asking provincial governments to subsidize the news industry.
- The CRTC announced, through its implementation of the Online Streaming Act, that 1.5 percent of revenues earned by major streaming companies in Canada must be directed to a fund to subsidize the production of news by licensed radio stations.
- The CRTC also announced its intention to hold a “consultation” in the spring of 2025 involving all players in the news industry followed by a public hearing. This suggests that the federal broadcasting and telecommunications regulator intends to use its new authorities granted under the Online Streaming Act to create additional financial subsidies for news organizations that meet the standards set by it and the funding agencies it approves.
None of these developments are good news for a free and independent press in Canada. Each works to further entrench the news industry’s dependence on government, and collectively, expands the oversight of the industry by the CRTC, whose decisions are made by Cabinet appointees. Collectively, these developments constitute a considerable contraction in terms of liberty.
Where we are
In quick order, most members of the Canadian news industry have abandoned their long-cherished ideals of independence, halted meaningful efforts to adapt to technological change, and embraced government funding as the solution to its problems.
Case in point: after a recent Reuters poll indicated low levels of support for subscription-based media business models, Howard Law – the former director of media for Canada’s largest union, Unifor – said in a mediapolicy.ca blog post, “It’s clear that the answer to ‘what is to be done?’ must focus on free, bundled, tax deductible, government subsidized, donor supported, billionaire-patronized, and/or public broadcasting journalism.”
Law’s comment certainly appears to accurately represent the assumptions being made throughout most of the industry, primarily because it concedes key core assumptions, including a trust that the current structure of the Canadian Broadcasting Corporation is appropriate. The impact on the industry of a heavily subsidized commercial competitor – the CBC/SRC – cannot be ignored nor, as we shall see, allowed to continue. Law’s conclusion also assumes, with respect, that the quality of the news being produced by media outlets is not related to the public’s perception of its subscription-value proposition.
Most The Future of News event participants fell into one of the following groups:
- Those who completely reject any form of government subsidy.
- Those who are completely fine with government subsidization of media.
- Those who oppose government subsidies of media on principle but are obliged by their shareholders to take advantage of any financial support offered by the government.
- Those who have long depended on government funding via the Canada Periodicals Fund or funds designed to, for instance, support community radio or official language minority communities, and are uncertain if their operations could be sustained without government support.
- Those who completely reject any form of subsidy but are aware that, with most of their competitors having taken advantage of it, they will within the foreseeable future be forced to make a choice between their principles and staying in business.
Group 1: Those who completely reject any form of government subsidy
This group generally adheres to traditional values held within the industry and believes that the connection between government funding and the media is corrosive – that the day will inevitably come when someone in government raises an eyebrow and asks an offending journalist, “aren’t we funding you?” It also believes that even if that scenario never occurs – and even if funded journalists maintain high standards – a skeptical public will still distrust their organizations. Given how important the maintenance of public trust is to the relationship between media and its consumers, this group sees government subsidy as fatal to the concept of an independent and free press within Canada.
Group 2: Those who support government subsidization
This group believes that government subsidies have helped its organizations to grow and to better serve the public. While it would rather avoid accepting subsidies, it also understands that most industries in Canada – and particularly in Quebec – are subsidized in one fashion or another. The public generally perceives subsidies as fairly commonplace and not politically threatening. This group also believes that public trust is best measured by the extent to which the public engages with and subscribes to their product. Subsidies enable organizations to hire more reporters, thereby better serving the public. Consequently, they argue that this strengthens the trust between news providers and consumers.
Group 3: Those who believe it’s wrong but feel they must
This group is philosophically opposed to media dependence on government (and political) support. It tends to share the values of Group 1. However, members of this group need revenue. They are willing to accept it through tax credits, direct subsidy through the LJI, or support via the Google fund. Also, some have been unable to convince partners/shareholders to decline those supports based on principles. Reluctantly accepting subsidies, members of this group wish they could develop profitable, and more ethically palatable, business models.
Group 4: Those with long-term dependencies
Members of this group often include organizations whose roots lie in the magazine, community radio, or non-daily newspaper industries. Targetting readers within specific demographic markets, these organizations employ business models that assume the perpetual availability of various government grants designed to subsidize them based on their cultural value or need to cover postal costs. They are concerned about public trust and the credibility of journalism but also worry that any moves to eliminate more recent subsidies might also jeopardize their longer-term funding dependencies.
Group 5: Those who resist but fear they will have to surrender principles
This group is a sub-section of Group 1. Members are strongly opposed to direct government subsidies that could cause members of the public to distrust the media. They hope that their refusal to accept government assistance will give them a moral marketing edge that helps them to build readership. However, they understand the financial risks of rejecting subsidies that their competitors accept – and realize that they may one day be forced to abandon their principles in favour of economic pragmatism.
The Ottawa Declaration
At the conclusion of the May 6 The Future of News event, participants pledged to reconvene before the end of the year to debate proposals that will help to ensure a free and independent media presence in Canada.
They also issued the Ottawa Declaration, which states:
- A free and independent press able to hold the powerful, including government, to account is an essential feature of Canadian democracy.
- Recent federal legislation and regulation could soon see up to half or more of the salaries of full-time journalists and editors working for digital news outlets funded by government-coordinated subsidies.
- These large-scale subsidies, totalling hundreds of millions of dollars to date, are in addition to the federal government’s direct funding of the CBC/Radio-Canada, which currently employs one-in-three journalists in Canada in its news divisions.
- The widespread subsidization of news journalism is happening against a backdrop of plummeting confidence in the news media, with 37 percent of Canadians indicating they “trust” the press and less than one-in-five supporting government funding of newsrooms.
- The broadly unpopular subsidy regime represents a challenge to our democratic process insofar as it raises questions in the public’s mind about the independence of the press, thereby undermining the perceived veracity of reported news.
- The subsidy regime also creates an uneven playing field whereby some news outlets, primarily legacy media companies, are able to qualify for government support and others are not, stifling much-needed innovation and private investment in the sector.
- To ensure Canadians have access to news free from the appearance of government influence, and therefore more likely to garner public trust, our media companies will not accept the per-employee subsidies currently on offer from government and industry.
- We acknowledge that outlets serving some minority communities may need to avail themselves of the subsidies to provide their audiences with high-quality news in absence of a viable commercial market for their journalism. We pass no judgment on these groups.
Signatories to date include:
Andrew Coyne, columnist, The Globe and Mail; Andrew Lawton, editor-in-chief, True North; Bruce Annan, former president, The Toronto Star; Candice Malcolm, founder and editor-in-chief, True North; David Clinton, publisher, The Audit; Derek Fildebrandt, publisher/president/CEO, The Western Standard; Holly Doan, publisher/owner, Blacklock’s Reporter; Jonathan Kay, editor, Quillette; Paul Wells, political journalist; Peter Menzies, former CRTC vice chair and Calgary Herald publisher; Rudyard Griffiths, publisher/co-founder, The Hub; Sam Cooper, founder, The Bureau; Sean Speer, editor-at-large/co-founder, The Hub; Tania Finch, founder, The Broken Typewriter; Tara Henley, writer and podcaster, author of Lean Out; Tom Korski, managing editor, Blacklock’s Reporter.
What is to be done?
In our view, it is far too soon to wave a white flag, particularly when doing so would only exacerbate the erosion of public trust in media and diminish the incentives for companies to prioritize audiences over funders.
Policy-makers – those in government and those assuming the role of government-in-waiting – must turn away from the current path. They must instead focus on blazing a trail to sustainability for a free and independent press functioning in a competitive market. Within this market, those who best serve readers in the manner they wish, with a high-quality product, will prosper; those who do not will fail.
They should embrace the words of Terence Corcoran who, in 2016, wrote the following for the National Post:
“The first battles against government control were fought centuries ago in England over Licencing of the Press laws and other variations on measures that limited press freedom. The fight was waged by the likes of John Milton, John Locke, and John Stuart Mill. The result became known as the libertarian theory of the press. In Four Theories of the Press, a classic 1950s book once on reading lists in journalism schools, Fredrick Siebert summarized the theory. ‘Let all with something to say be free to express themselves. The true and sound will survive. The false and unsound will be vanquished. Government should keep out of the battle and not weigh the odds in favour of one side or the other.’”
What follows is a series of proposals, some of which are explored in more detail in the “…and now, the news” policy paper by von Finckenstein and Menzies:
- Repeal the Online News Act
Doing so would almost immediately restore the industry’s access to Canadian audiences worth, by Meta’s estimate, $230 million annually – an amount almost equivalent to current government supports and subsidies. For this to happen, Meta must commit to restore access for news content and links and not suppress their visibility. It must also, with other tech companies such as Google, contribute to a Canadian Journalism Innovation Fund (see item number 8, below).
- Void the agreement with Google that saw it establish a $100-million fund for Canadian media in exchange for an exemption from the Online News Act.
Google must agree to restore and expand commercial agreements with Canadian-owned and operated news producers at levels equivalent to those that were previously in place and contribute to a Canadian Journalism Innovation Fund.
- Reform and decommercialize the CBC
It is not possible for any industry to flourish when one commercial competitor is subsidized to the disadvantage of all others, as is the case in Canada with the CBC. The CBC employs an estimated one-in-three Canadian journalists while competing for advertising dollars. More details on this recommendation, which includes the availability of CBC news content through a creative commons license, are available in the “and now, the news” report.
- Subsidize news consumers, not the providers
The government is currently subsidizing providers of news, through its own structures and the Google fund, in a manner that disregards the preferences and needs of consumers. The federal government should recognize that subscriptions to news platforms are a public good worthy of increased subsidy via tax deductions. Our MLI paper, “…and now, the news,” suggested increasing the current allowable tax deduction of 15 percent to 100 percent; the Globe and Mail’s editorial board recently suggested a more modest but still impactful increase in the tax deduction to 70 percent – an amount equivalent to that granted to Canadians who donate to political parties.
- Phase out the current Canadian Journalism Labour Tax Credit
This can happen over a period of four years, declining in value by 25 percent annually in order to wean news organizations off it while they adapt to a more permanent policy framework.
- Phase out the Local Journalism Initiative
This can occur over a period of four years, declining in value by $5 million per year and with adjustments that would make it available only to news organizations serving market areas of less than 100,000 people, and limited to easily defined core coverage beats such as public safety, courts, school boards and municipal councils.
- Phase out the Canada Periodical Fund
This is no longer relevant in a digital age and can be done over a four-year period.
- Establish a $25 million Canadian Journalism Fund
This should be based entirely on contributions from large tech companies such as Meta and Google, which would only be available to independent or small chain online entities based in “news desert” markets of 100,000 or less and be offered for a limited (two years maximum) time. In other words, subsidize opportunity and not outcome; avoid embedding dependence, while addressing areas of greatest need. An independent board that functions with the highest level of transparency should be established to oversee this fund.
- Restrict the CRTC
Through amendment to the Broadcasting Act, the CRTC’s role should only involve governance of licenced, over-the-air broadcast journalism organizations, leaving the online news world to evolve dynamically and free of regulatory oversight.
The path forward for the Canadian news industry remains perilous. We offer these recommendations not as conclusive solutions but as the foundation for discussions going forward.
Whatever their faults, these suggestions are preferable to the current course News Media Canada, in concert with the federal government, has charted. Theirs is one that embeds media dependence on politicians over whom the public expect the former to keep watch. The nation’s media will not succeed if, rather than vigorously defending its freedom from outside influence, it continues to entrench its cooperative association with those who hold power over the country’s citizens.
Peter Menzies is a Senior Fellow with the Macdonald-Laurier Institute and spent close to 10 years as a member of the Canadian Radio-television and Telecommunications Commission, including terms as a part-time Commissioner, regional Commissioner for Alberta and the Northwest Territories and as vice-chair of Telecommunications. Prior to that he had a long newspaper career, most significantly at the Calgary Herald where he served as editorial page editor, editor-in chief and publisher. He is a National Newspaper Award winner and Association of Opinion Page Editors award winner. He is a frequent writer of commentary for the Globe and Mail, Toronto Star, National Post, The Line, The Hub, C2C Journal, Epoch Times, and numerous other publications across Canada.
Appendix: The Future of News Conference, What we heard
Concerned by the Canadian media’s growing codependent relationship with government, the Macdonald-Laurier Institute and The Hub co-sponsored the Future of News event on May 6, 2024, at the National Arts Centre.
The hope was that digital news entrepreneurs and innovators could chart a course towards an economically sustainable future for a free and independent news industry.
A number of news operators representing those with print and broadcasting histories and online-only businesses attended. Others who participated had expertise in the regulatory world, academia, online platforms, the internet itself and public policy. In all, close to 50 people participated.
The purpose was to begin a process that would free Canadian media from dependence upon government and ensure that, going forward, public trust in the news will be revived.
The concern articulated to initiate the meeting was that, very quickly, the industry has become highly dependent upon the federal government for funding and efforts to adapt to technological change now largely consist of seeking even more support from provincial and territorial governments. Quebec has already been very active in its financial support for the media.
The primary concern was that this dependence on politicians has a negative impact on public trust in news media and could inevitably lead to further political oversight of the industry.
Economically, there is also a concern that government funding mechanisms primarily benefit legacy media that have struggled to adapt to the digital age at the expense of hundreds of online-only innovative startups.
The agenda consisted of three moderated panels and discussion of a proposed declaration. The meeting was conducted under Chatham House Rules, which means information can be shared but without attribution. This format permits people to speak freely.
This meeting was hoped to be the beginning of an ongoing process.
This is what we heard:
Panel 1: The News Media Environment
The purpose of this panel was to examine the current state of play for the news industry. Here are some of the key points made:
One participant noted that the industry is facing challenges on multiple fronts:
“We have focused on the business model problem,” they said, “which is not a small problem, but we’ve failed to address the declining public trust problem.”
The audience was directed to the fact that the election of Donald Trump as United States President in 2016 led journalism – initially in the USA and then spreading to Canada – to take down ordinary guardrails as many reporters felt compelled to abandon their role as unaligned presenters of the news of the day, view Trump’s ascendancy as an the existential crisis for democracy, and move towards an activist agenda and ideological capture.
It was further noted that in response and currently in the U.S., media such as the New York Times and National Public Radio have begun “walking back” their reporting on the pandemic and the response to Trump 2016. There is a growing recognition, it was said, that turning away from independent reporting turns journalists into a “propaganda arm for a preferred candidate.”
Canada, this panelist said, needs to come to a similar recognition of failure in order to restore the public’s trust in journalism.
An overview pointed out that the Qualified Canadian Journalism (QCJO) Organization Journalism Labour Tax Credit (JLTC) and Local Journalism Initiative (LJI) was rolled out beginning in 2019 to assist large news outlets.
In the most recent federal budget, the amount of funding available for independent journalism increased to $500 million and is expected to grow.
The Canadian Radio-television and Telecommunications Commission (CRTC) is expected to oversee an additional roll out of $100 million obtained from Google via Bill C-18, the Online News Act.
It is “conceivable that in the next 12 months the majority of editors working at private news outlets will have their salaries funded by some form of direct or indirect subsidy.”
And that doesn’t account for the LJI which is supporting 100 percent of the salaries of 5 percent of the Canadian journalism workforce or the CBC which includes three in 10 Canadian journalists.
“No other country in the world has taken the subsidy regime this far,” the panelist said. “Do we believe that this might have an effect on public trust and public perceptions of the media?
“Only 30 percent of Canadians trust traditional media.”
Further, it was noted that there is no expectation within the framework of these programs of transparency in the declaration of funds.
“Does that create trust in media?” wondered the panelist.
The question was also raised as to whether public subsidies for traditional media constitute grist for the business model mill of those online business that profit from anger and the promotion of conspiracy theories.
An alternative was expressed by another panelist who suggested that news organizations should advocate for more, not fewer tax credits.
This panelist said it is incorrect to view the current tax credit regime as a subsidy. Rather, they said, tax credits are fiscal incentives for the creation of more journalism jobs and more reporting, which better serves the public.
Quebec, they said, was exemplary in this regard, and the costs of 40 to 70 percent of newsroom salaries there are covered thanks to these credits.
The panelist also suggested the link between public funding and trust has yet to be proven in a study.
As for future solutions, it was suggested that operators who think that selling advertising will work as a business model are “very naive” and that the relationship with the use/consumer of the product as a subscriber needs to be at the core of the business.
Subsidies, noted another panelist, were never intended to become a permanent part of news organizations’ business models. When they were initiated, they were meant to expire after 5 years but have now been doubled and extended.
Nor have subsidies stemmed the tide of closures.
Polls, it was noted, suggest strongly that even if government assistance had not influenced the professionalism of funded journalists, it has impacted public trust. This panelist pointed to the faulty premise behind the Online News Act (Bill C-18), that big tech wasn’t paying news providers and was stealing their content as another contribution to the industry’s difficulties.
The reality, they said, is that big tech helps news organizations reach new audiences and that small independent small outlets would not be thriving without social platforms. The loss of access to Facebook due to the Online News Act has done harm.
This prompted another panelist to make the point that “the single biggest way to rebuild trust is to sell a product/subscription – that is the market telling you that you’ve built trust.”
It was then noted that subsidies dial back the incentive to build trust through subscriptions.
There was general agreement among panelists that the industry needs to rethink and focus on its relationship with the audience and that subsidies or incentives should not form the foundation of any news organization’s business model.
“No help in the world will save a platform with no readers,” said one panelist.
One panelist then made the point that when governments subsidize private organizations, they are socializing the losses/cost side of the business while profits continue to be privatized. Private organizations in this scenario, the panelist noted, are appealing to politicians and the public as if they are charitable organizations.
We should not, they said, be providing hundreds of millions of dollars annually to private, tightly controlled corporations.
“Wall Street hedge funds are expropriating capital on the basis of providing charitable good,” they said.
Concerns were then shared regarding the qualifying criteria set up by the government to obtain tax credits, subsidized salaries and money from the Google fund created by Bill C-18.
The discussion then moved to the role the CBC/SRC plays in the news ecosystem.
One panelist began by saying the CBC is an important institution that should be conserved but needs a wide-scale, data-driven review to acknowledge internally what everyone sees externally – that it suffers from ideological bias in its reporting and its news decisions.
It was mentioned that people on all points of the political spectrum feel betrayed by bias.
Support was indicated for some of the ideas promoted in a recent post by Jen Gerson – The Conservative case for the CBC – that called for a mandate review, a focus on local journalism, a role that supports journalism instead of competing with others for dominance of it, codification of principles of objectivity and appropriate training for the next generation of reporters.
It was also suggested that the CBC remove its employment requirements regarding university degrees for journalism in order to broaden its talent pool and provide more opportunities for journalists from working class backgrounds.
The situation in Quebec, it was noted, is very different from in English Canada. In Quebec, there is a very strong attachment to Radio-Canada where it regularly dominates the top 20 ratings of most-watched television programs.
It is therefore impossible to talk about Radio-Canada and CBC in the same manner.
Because CBC is in English, it is in direct competition with American channels available in Canada, which is not the case at all in the francophone world. Yet, when debate gets heated, that distinction is often lost.
CBC and Radio-Canada are integrated, it was said, but “bound to live apart together.”
The discussion returned to the need to retain trust, noting that there is a project underway in the U.S. that focuses on 8 indicators of trust.
The manner in which Canada’s current subsidies flow to payroll was also pointed to as problematic. They should instead flow to the activation of new subscriptions or growth of the recipient’s audience. It should be based on a more market-oriented performance metric.
One panelist suggested that government subsidy to salaries = “acid on the brain” to many Canadians.
Finally, it was suggested that the current state of the industry has created a situation within which it is difficult for media on subsidies to maintain credibility when criticizing other rent seeking industries in Canada.
PANEL 2: Examining Business Models
The purpose of this panel was to examine preferred business models capable of sustaining journalism-focused companies in the future.
One panelist suggested that the basis for a news model should be well-executed journalism.
“Put the journalists at the center of the business model,” they said. “We are not a charity, we don’t need your support, we are a business. If you like it and pay for it we will survive.”
Support was expressed for the intentions of the Online News Act because tech platforms were “picking winners” in the manner used to support entrepreneurial news organizations. It seemed that the only way to survive, one panelist said, was to support legislation that leveled the playing field in the way tech funds were distributed.
At the same time, concern was expressed that with the outcome of Bill C-18, more fights will be coming and “winners will be picked again.”
Another panelist made the case that “Journalism is an act, not an industry” and anything “we should do should further the act, not the industry.”
It was further noted that the role of government should be maintenance of a level playing field, that it should refrain from attempting to define journalism and that the CBC needs to be part of the solution.
Another panelist described how a business model evolved after first emerging on Facebook with the sole purpose of covering a civic election. Initially crowd-funded, the platform is now reader/subscriber supported but so far that is insufficient to cover total costs. The panelist stated their view that the subscription model is the path to sustainability but noted that they have accepted the opportunity to access government subsidies.
The CBC was called out for creating “super newsrooms” by poaching private sector talent and innovative ideas – with examples given. It was suggested that this is an example of how CBC is competing with journalism projects in Canada rather than supporting them as would be expected from a truly public broadcaster.
The CBC was also pointed to as unhelpful in terms of causing “crazy salary inflation.”
Another independent startup model was presented that “built an audience primarily on Facebook” and then after 18 months created a limited paywall.
All of the company’s early success, it was noted, was fueled by Facebook until The Online News Act caused Meta to no longer carry news links.
The panelist outlined their approach: When government asks “What can we do to help you?” the reply is “Stop trying to help us!”
“Repeal absolutely everything and leave us alone to do our thing – we’ll figure it out.”
With Bill C-18, the panelist said government “tried to save journalism, but all they did was muck it up.”
The company, the panelist said, had set aside capital to invest in expansion but the impact of Bill C-18 and the absence of access to Facebook “killed half our readership overnight and prevented hiring of journalists.”
Another panelist said the path to a more sustainable future for news organizations should be blazed with a “do no harm” approach. They also suggested that the ATIP laws need to be updated to make information more available more quickly and that care must be taken by government not to “strangle the very thing you want to grow.”
The panel also mentioned the need for changes to be made at the CBC via a mandate review to ensure it fostered innovation instead of suppressing it. It was suggested that CBC content should be made available through a creative commons approach.
The conversation also turned to what some panelists viewed as the unnecessary subsidization of failing operations which appear destined for creditor protection.
The government, in other words, should not be afraid to let certain companies fail as that might lead to a healthier industrial ecosystem, with assets repurposed, journalists continuing to be employed and brands persisting under restructured ownership.
Economic principles, it was said, prefer that only the fittest survive and the government needs to let that play out.
That was followed by a comment noting that publications elsewhere such as the Boston Globe and New York Times are not dying.
“It is individual publishers with individual decisions that precipitate their decline.”
There is no reason why, it was said, Canada cannot do what those newsrooms have done.
Substack could also be strengthened, it was suggested, through consolidation, ie “a Substack package subscription with portioned out revenue.”
Other comments included:
“Do subsidies shield us from the knowledge of who is doing well? Don’t subsidies have to go before there can be an honest marketplace.”
“Find me an industry in this country that doesn’t have some sort of subsidy and I’ll be shocked – there are zombie firms in any industry.”
News sustainability is not just a Canadian issue – “Canada’s primarily federal response has just been particularly perverse and incompetent.”
“Six years ago there was nothing called ‘media policy’ – this has introduced all the uncertainty associated with other policy guided industries.”
The Local Journalism Initiative is “anti-competitive and prescriptive – and no one is policing it.”
PANEL 3: Advocacy – The Best Way Forward for News Media Interacting With Governments
The session was introduced with the question:
“In the end, what are we doing here? What is going to happen next?”
In terms of policy solutions, the panelist wondered what possible policy solutions were the represented organizations willing to embrace beyond making subscriptions 100 percent tax-deductible – “everyone agrees on that.”
Independent media, it was suggested, have done a terrible job of speaking up against the failure and the influence of the traditional industry.
News Media Canada, it was stated, “is the elephant in the room.”
It was noted that News Media Canada has not made any statements about upholding the integrity of paywalls and password-sharing while at the same time capturing the government’s attention as speaking for the entire industry.
There is a need, it was said, to have someone speak to the government from the collective perspective of those independent media in the room.
One panelist pointed out that because of those who had lobbied for Bill C-18 and those who crafted it, an independent product no longer had access to audiences via Facebook.
As a result, they said, 45% of the product’s potential audience disappeared overnight.
Younger generations, it was noted, do not consume media on traditional platforms with which they have little cultural connection. It is necessary therefore that if those generational audiences are to be accessed, it will be through social media.
“Younger people are not necessarily seeking news out – if we’re not able to seek out audiences on those platforms, we’ll create a gap,” said one panelist.
Another more wryly noted that: “I don’t want to put my financial security on the whims of some amalgam of Trudeau and Ford.”
It was also noted that within the current environment there is a great deal of uncertainty – economic, technological, regulatory, and political. There is also uncertainty about what actions may or may not be taken if there is a change in government.
Nevertheless, as one panelist said “we’re going to control our destiny as much as possible – own our list” of objectives.
The agenda of today’s politicians, one panelist noted, is to avoid being “the guys holding the bag when the lights go out” for legacy media companies whose failure to adapt to technological and social change appears to make their demise inevitable.
Support was given to the earlier suggest that the ATIP process be improved.
“All of us would benefit if that got fixed,” said one panelist.
It was also mentioned that while there seemed to be a lot of support for the user pay model, the social downside of that could be that subscribers/those regularly accessing news might consist of only the “rich and already engaged.”
A panelist noted that they would sleep better on a sound subscription 100 percent base than on the political whims of government subsidies. It is better to make decisions on the wishes of 10,000 subscribers rather than those of one Heritage minister possibly making decisions on “the basis of one poll.”
“My attempts to save the industry are bottom up not top down,” said one panelist, noting they were focused on “buying groceries next month.”
Another panelist cautioned not to dismiss advertising revenue within their business models and “listen to the polls” – most people will not pay or don’t have the money for subscriptions.
Another responded that news operators can’t compete with Big Tech when it comes to advertising.
“We only care about people who pay. It is not my job to make a better Canada… my job is government accountability, to shoulder check them into the boards and get a piece of information out.”
Two things, it was noted, have to happen:
- The investor class needs to understand its responsibility to create whatever the next digital marketplace package is going to be – reporters and journalists don’t know how to do that.
- Then news operators need to know who is actually profitable to know who to partner with.
One panelist then pointed to the need to address the contrast between spiritual, higher aims and material “grit.”
Material is easy, they said “get rid of subsidies and let the fit survive.”
As for the spiritual, i.e. “saving democracy,” the panelist favoured a return to a “throw the bastards out” approach.
“What is clear to all of us – the Government has no idea what to do about it. That is what the Department of Heritage was saying initially.”
One panelist noted the social dangers that can occur once algorithms send people into an online world dominated by conspiracy theories, noting that during the pandemic they had watched, troubled, friends transition from wondering “is this thing really so deadly” to “the World Trade Centre is an inside job” within a few months.
Members of younger demographics, it was noted, “go down the rabbit hole fast” which means that journalism has to work with the creator economy and have a presence on social media platforms in order to be able to work effectively within this new reality.
Declaration:
A draft declaration was proposed for discussion regarding government subsidizing of media.
Those who proposed the declaration indicated they would take into account the feedback and participants would be contacted regarding any reframing,
Conclusion:
In the world of journalism, it should come as no surprise that a variety of views exist.
There were some themes around which there did, however, appear to be general consensus.
It was apparent that there was broad concern for the health of the industry and its prospects for sustainability in the future.
The need to maintain public trust where it remains and re-establish it where it does not was acknowledged. It was accepted that public skepticism regarding government support for journalism constitutes a problem when it comes to trust maintenance.
Most news organizations were of the view that with or without subsidies, the primary relationship for any news organization’s success must always be with the reader.
Also, there was a consensus that, in terms of business models, organizations that put the reader at the centre of their ambitions could achieve success through implementing paywalls and selling subscriptions. This is an area that public policy could support by increasing the percentage of subscriptions that are tax deductible.
The need for access to readers via social media was also a matter concerning which there was little disagreement. The inability to do so via Meta products was frequently mentioned.
Attendees not employed in the news business took the time to speak up and to encourage those in the industry to continue to work to maintain their independence and the presence of a free press in Canada.
Recommendations:
That the organizers of the event continue to support the quest for a sustainable future for a free and independent press in Canada through continued engagement and the promotion of policies and practices that would make that possible.
And that the next meeting on this matter take place later in 2024.
