A vintage call for government to aid struggling mainstream media
Report lays out practical but minimalist ways in which Ottawa could help newspapers escape the internet vampires.

thestar.com
By Thomas Walkom
Jan. 30, 2017

Canadian governments have long subsidized media. They still do.

As the authors of The Shattered Mirror, the latest jeremiad on the state of newspapers in Canada, put it: “Those who fear that the state will take up residence in the newsrooms of the nation, should recognize it has been well-ensconced there for a long time.”

Those subsidies include an income tax provision that favours domestic magazines and newspapers plus a periodicals fund that subsidizes magazines (including big ones).

On the electronic front, the Canadian Radio-television and Telecommunications Commission exists not only to regulate broadcasters but to protect them.

On the provincial front, some provinces - including Ontario - give newspaper subscribers a break on the HST.

And then there’s the CBC.

All of which is to say that the study’s call for more government action to help media is hardly revolutionary. Indeed, it may not be enough to do the job.

The job is daunting. The Shattered Mirror describes a media landscape in which there is little visible hope.

Newspapers, the traditional source of news, are in dire financial straits. New online operations have sprung up. But they don’t have the staff, resources or in some cases the interest to do the legwork involved in daily journalism.

The villains of the piece are internet giants like Google and Facebook. They soak up the online advertising dollars that traditional media need to survive. But they create no journalistic content themselves, relying instead on material cribbed largely from the mainstream media.

They are aided and abetted by the mainstream newspapers themselves, which willingly invite the vampire into their homes by voluntarily posting content on social media.

It’s pretty much a big mess and no one has yet figured out how to solve it.

Enter something called the Public Policy Forum, which was asked by the federal government to come up with an analysis and recommendations.

Its report, published Thursday, offers no overarching remedy. At best, it outlines a series of holding actions that, if adopted, might give existing media companies more time to re-invent themselves and avoid bankruptcy.

The centrepiece involves tweaking the tax laws to knick foreign operations that solicit on-line ads from Canadian firms. The money raised by this move, estimated at $300 to $400 million a year would be put into a fund operated at arm’s length from the government and used to help publications make the move to digital.

The fund would also subsidize a local newsgathering service to be operated by the privately-owned Canadian Press. This service would be expected to provide the coverage of courts, municipal politics and provincial legislatures that many local newspapers no longer offer.

The report has much to say about the CBC which, for reasons that are never explained, leads the pack in terms of online presence. The authors recommend that CBC get out of the business of soliciting online ads. But they say that even if this happens, competing newspapers won’t gain much, since the amount involved - $25 million a year - is relatively small.

More intriguingly, the report would force CBC to offer its content without charge to competing media - beginning with those that are not-for-profit. In effect, this would enlist the employees of the public broadcaster as unpaid news gatherers for private operations.

Meanwhile, the CBC itself would be tasked with paying more attention to “civic-function” (read boring) content and less to that aimed at a broad audience.

The report would also change the copyright regime to make it more difficult for online bloggers and news aggregators to reprint newspaper stories without paying for them.

That’s a reasonable idea, although I suspect it would be difficult to enforce.

Finally, the report would change the tax rules to make it easier for charitable foundations to fund or even own newspapers.

Should government put its shoulder to the wheel to rescue endangered media companies? The report wisely says that any government aid should be structured in a way that ensures stockholders and overpaid media executives don’t walk off with all the loot.

And its own polling suggests that while Canadians mainly trust the mainstream media, most don’t think the government should be in the business of bailing them out.

In short, if the government does decide to help out media publishers, it would be advised to follow past practice and do so in minimalist ways that create little controversy. That seems to be the message of this quite interesting report.