New report investigates Canada’s media crisis

Newspapers’ sharp decline, sift toward Internet media among the subjects of study

Thestar.com
Jan. 26, 2017
By Terry Pedwell

Canada's news industry finds itself at a mission-critical crossroads, and needs a helping hand if it is to resume its role as a guardian of democracy, says the author of a major study coming Thursday that is expected to offer a road map of sorts.

The Public Policy Forum study, funded in part by the federal Heritage Department, explores the dramatic decline in the newspaper industry over the past two decades, and how massive layoffs and revenue declines in the professional news business are affecting democracy.

The report comes on the heels of what was just the latest in a series of layoffs by Postmedia, the country's largest chain of daily-circulation newspapers.

The company issued layoff notices Tuesday to employees at the Ottawa Citizen, Montreal Gazette and Windsor Star after the company failed to reach a 20 per cent salary reduction target it set for itself last fall.

Other news giants, including the Toronto Star and the Globe and Mail, have also cut staffing levels as they struggle with declining print advertising revenue.

Nor are television and radio newsrooms immune: Canada's national broadcast regulator warned last year that nearly half of the country's local TV stations could be off the air by 2020 without a revenue boost to pay for local news programming.

The report, authored by veteran Canadian journalist Edward Greenspon, is also expected to delve into the rise of "fake news" and offer suggestions for how government policies, as well as taxes and other laws, can be rewritten in response.

Heritage Minister Melanie Joly ordered the study as part of an overall review of Canada's media landscape, looking in particular at how it's being affected by a shift to the Internet. A Commons committee has also carried out its own study and is expected to report to Parliament by spring.

The findings indicate the industry is reaching a "crunch point," if it isn't already there, Greenspon said in a statement.

"This report is meant to offer insight into the state of news two decades into its existential crisis, as well as ideas for how to respond," he said.

"We hope it will stimulate a necessary debate and necessary action, while understanding no story is ever at its end."

The report, entitled "The Shattered Mirror: News, Democracy and Trust in the Digital Age," relied on a half-dozen roundtables, polling and focus group research in making findings about how Canadians perceive the relationship between the news industry and the country's democratic institutions.

The Canadian Press participated in the roundtables and research.

In April, Joly launched a public consultation on media and Canadian content in a digital world that included town hall gatherings across the country.

Those forums heard a range of suggestions, including calls for new fees or taxes on foreign-owned digital media players as a means of helping to prop up the domestic news industry.

Others, however, have pre-emptively scolded the government for even considering any kind of taxpayer-funded support for media outlets, arguing that audiences will ultimately turn toward new digital platforms to stay informed.

Internet freedom advocacy group OpenMedia has petitioned against what it calls an Internet tax, but has asked federal Finance Minister Bill Morneau to consider applying sales taxes evenly across foreign online vendors operating in Canada.

Martin O'Hanlon, president of media union CWA Canada, suggested one solution for Postmedia could see government regulations or incentives that allow for local non-profit corporations or foundations to run the newspapers, provided the company was willing to sell its media properties.

In a report on Canada's entertainment and media sector issued last summer, PricewaterhouseCoopers predicted steady growth in Internet advertising revenues, and an acceleration of the recent downturn in newspaper publishing.

Media firms have complained that, while their focus turns increasingly to online publishing, digital advertising revenues have not come anywhere close to replacing those previously generated from print ads.

Joly's office has called the shifts in news revenue streams "significant," and said the government hopes its Canadian content consultations can help it assess how to best support the production of local, credible and reliable news and information.