{"id":63396,"date":"2019-03-21T17:00:31","date_gmt":"2019-03-21T21:00:31","guid":{"rendered":"https:\/\/newsroom.carleton.ca\/?post_type=cu_story&p=63396"},"modified":"2025-08-19T09:37:31","modified_gmt":"2025-08-19T13:37:31","slug":"government-funding-for-journalism","status":"publish","type":"cu_story","link":"https:\/\/carleton.ca\/news\/story\/government-funding-for-journalism\/","title":{"rendered":"Government funding for journalism: To what end?"},"content":{"rendered":"\n
\n
\n\n \n \n \n \n
\n\n
<\/div>\n \n
\n
\n\n

\n Government funding for journalism: To what end?\n <\/h1>\n \n <\/header>\n <\/div>\n\n \n <\/path>\n <\/path>\n <\/svg>\n <\/div>\n\n \n\n <\/div>\n<\/section>\n\n

The federal budget has finally answered some of the questions about the Liberal government\u2019s plans to subsidize the news business, which were first floated late last year<\/a>. But the details revealed by Finance Minister Bill Morneau<\/a> raises many more questions about Ottawa\u2019s reasons for supporting journalism.<\/p>\n\n\n\n

There will be a 25-per-cent refundable tax credit (up to $13,750 per employee) for those producing \u201coriginal written news content.\u201d Broadcasters, or any organization getting aid to publishers under the Canadian Periodical Fund<\/a>, will not be eligible for the tax credit.<\/p>\n\n\n\n

Eligible recipients must be public corporations with shares traded on a Canadian stock exchange and controlled by Canadians. If not publicly traded, the company must be 75 per cent owned by Canadian citizens, incorporated and reside in Canada with 75 per cent of its directors Canadian citizens, and Canadians owning 75 per cent of any trust or partnership.<\/p>\n\n\n\n

Not for specialized publications<\/h2>\n\n\n\n

<\/p>\n\n\n\n

Recipients must be general interest news publications not focused on a specific topic such as sports, business, entertainment or industry news. Yet it is precisely those specialized publications that are persuading audiences to pay for distinctive and high quality information online that has depth and can\u2019t be found elsewhere.<\/p>\n\n\n\n

As well, the publications must not be primarily promotional and must not have connections to any government or Crown corporation.<\/p>\n\n\n\n

But there\u2019s lots we don\u2019t know, starting with some basic question that should be asked about any government subsidy: What is the objective? What are the results it is supposed to achieve?<\/p>\n\n\n\n

It is obviously designed to assist traditional, general interest newspapers, but to do what? Keep them on life support and then what? Allow them to convert their print operations to digital? It\u2019s notable that the budget did not designate eligible jobs as those directly related to digital transformation.<\/p>\n\n\n\n

No future for print<\/h2>\n\n\n\n

<\/p>\n\n\n\n

Printed newspapers do not have a long-term future and some historic titles in Canada have already made the switch to digital only<\/a>. Will a subsidy help print newspapers return to the good old days of large profits? Is print circulation growing at any newspaper in Canada?<\/p>\n\n\n\n

These are all good questions to ask \u2014 and even better ones to answer before doing anything.<\/p>\n\n\n\n

There\u2019s lots more we don\u2019t know.<\/p>\n\n\n\n

The problems of mainstream media have been coming for a long time<\/a>. The immediate crisis is the collapse of print and digital advertising to the benefit of Facebook and Google, which can offer targeted ads that costs a fraction of print advertising and also gives advertisers specific audience data. <\/p>\n\n\n\n

\"Government
\n Newspaper executives like Paul Godfrey of Postmedia have been asking for government assistance for years. (THE CANADIAN PRESS\/Nathan Dennette<\/span>)<\/span>
\n <\/figcaption><\/figure>\n\n\n\n

Circulation declining<\/h2>\n\n\n\n

<\/p>\n\n\n\n

As advertising has disappeared, the audience must become the main source of funding for any news organization\u2019s long-term survival. But circulation has also been declining everywhere for years<\/a> and few people under 30 read newspapers and aren\u2019t about to start<\/a>.<\/p>\n\n\n\n

Where do those audiences get the information they used to get from newspapers? Are they satisfied? What do they miss? We don\u2019t know. If nothing, subsidies won\u2019t fix that problem.<\/p>\n\n\n\n

Similarly, the second government proposal \u2014 non-refundable tax credits up to $75 for subscribers to digital publications that meet the same Canadian rules as for labour subsidies \u2014 doesn\u2019t solve anyone\u2019s problem.<\/p>\n\n\n\n

Boutique tax credits are bad tax policy. They don\u2019t persuade people to do things they weren\u2019t doing before. They overwhelmingly reward those who are already doing whatever the tax credit is designed to encourage. That\u2019s why the Trudeau government killed the children\u2019s sports tax credit<\/a> and the transit pass tax credit introduced by the Harper Conservative government<\/a>.<\/p>\n\n\n\n

Few pay for news<\/h2>\n\n\n\n

<\/p>\n\n\n\n

More importantly, subscription tax credits don\u2019t address the problem. Public opinion research in recent years has consistently shown that only about nine per cent of Canadians are prepared to pay for news online<\/a>. That\u2019s because they see news available for free everywhere online and they have limited or no ability to differentiate between quality and commodity.<\/p>\n\n\n\n

Lowering the monthly price of a subscription from $15 to $10 through a tax credit won\u2019t change many minds about subscribing as long as the alternative for the audience is news for nothing.<\/p>\n\n\n\n

The budget also lays out principles under which news organizations can become charitable institutions that would be able to grant tax receipts to donors. Time will tell if this is an effective idea.<\/p>\n\n\n\n

Historically in the United States, First Amendment rights and related media issues have received broad philanthropic support \u2014 often from families that made their fortunes in the newspaper business. There is no comparable history in Canada, where philanthropy has been primarily directed to social, cultural and educational causes.<\/p>\n\n\n\n

What about the CBC?<\/h2>\n\n\n\n

<\/p>\n\n\n\n

Finally, there is a large question that the Liberal government has consistently ignored.<\/p>\n\n\n\n

What about the public broadcaster? What role does the federal government see for CBC\/RadioCanada in all this? CBC\/Radio Canada has already moved aggressively into the digital world, competing with newspapers online for news, opinion and \u2014 most important to the private sector \u2014 online advertising dollars.<\/p>\n\n\n\n

Does the prospect of competing against the relatively deep pockets of the CBC prevent entrepreneurs from launching news start-ups in communities across the country? Should government place fences around the activities of the broadcaster it owns?<\/p>\n\n\n\n

Until we know the answers to all these questions surrounding subsidies for the media, why do it?<\/p>\n\n\n\n

\n\n\n\n

<\/p>\n\n\n\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Carleton University is a member of this unique digital journalism platform that launched in June 2017 to boost visibility of Canada\u2019s academic faculty and researchers. Interested in writing a piece? Please contact Steven Reid<\/a> or sign up to become an author<\/a>.<\/p>\n\n\n\n

All photos provided by The Conversation from various sources.<\/em><\/p>\n\n\n\n

—
\nCarleton Newsroom<\/a><\/p>\n\n\n\n

\"The<\/figure>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The federal budget has finally answered some of the questions about the Liberal government\u2019s plans to subsidize the news business, which were first floated late last year. But the details revealed by Finance Minister Bill Morneau raises many more questions about Ottawa\u2019s reasons for supporting journalism. There will be a 25-per-cent refundable tax credit (up […]<\/p>\n","protected":false},"author":410,"featured_media":63410,"template":"","meta":{"_acf_changed":false,"footnotes":"","_links_to":"","_links_to_target":""},"cu_story_type":[1623],"cu_story_tag":[],"class_list":["post-63396","cu_story","type-cu_story","status-publish","has-post-thumbnail","hentry","cu_story_type-expert-perspectives"],"acf":{"cu_post_thumbnail":"blueprint"},"_links":{"self":[{"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/cu_story\/63396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/cu_story"}],"about":[{"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/types\/cu_story"}],"author":[{"embeddable":true,"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/users\/410"}],"version-history":[{"count":3,"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/cu_story\/63396\/revisions"}],"predecessor-version":[{"id":63413,"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/cu_story\/63396\/revisions\/63413"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/media\/63410"}],"wp:attachment":[{"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/media?parent=63396"}],"wp:term":[{"taxonomy":"cu_story_type","embeddable":true,"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/cu_story_type?post=63396"},{"taxonomy":"cu_story_tag","embeddable":true,"href":"https:\/\/carleton.ca\/news\/wp-json\/wp\/v2\/cu_story_tag?post=63396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}