$400M fund, tax changes, local news service urged to help restore Canada's media

By The Canadian Press
January 26, 2017 - 7:00am

OTTAWA — Taxing Google and Facebook, reining in the CBC and spending $100 million in taxpayer dollars to foster healthy journalism would help a struggling media sector ferret out "fake news" and ensure the continued health of Canada's democracy, a major new report released Thursday concludes.

The 100-page Public Policy Forum report, authored by veteran journalist Ed Greenspon, also calls for a sales tax on foreign companies selling digital subscriptions in Canada and other tax measures that would provide a "Future of Journalism and Democracy" fund with $300 to $400 million a year, designed to support local and indigenous news, along with research on the role of news in society.

The report's dozen recommendations also include creating a new "local" mandate for The Canadian Press that would operate under a separate, not-for-profit entity; requiring the CBC to share for free the right to publish its news content with other organizations; and ending the public broadcaster's ability to sell digital ads.

Canada's news industry finds itself in deep crisis, brought on largely by a shift in advertising to digital media sites, that remains a legitimate threat to the health of Canada's democracy, Greenspon told a news conference Thursday.

"Make no mistake: the situation for journalism, and therefore democracy, is getting worse," he said. "Canada's news industry is in the midst of an existential crisis. So, therefore, is our democracy."

But while digital news aggregators say they're open to better ways of partnering with media organizations, Google said the expanded tax measures floated by the report would have a negative effect on Canadian small business.

"Such measures would be challenging to implement, reduce the competitiveness of Canadian business and may make it harder for smaller news publishers to thrive," the company said in a statement.

Greenspon said the CBC should have its news content placed under a so-called "creative common" licence that would make it freely available to not-for-profit news entities — a move he acknowledged would need careful handling to protect commercial media operations, including CP.

"This open-sourced approach would go a long way toward transforming the CBC from the public broadcasting model of the past to a universal public provider of quality journalism — an important antidote to fake news," he said.

Creating a "local" news service under The Canadian Press umbrella would require a strict mandate and its content would also have to be offered at no cost to all news organizations, said CP president Malcolm Kirk.

"It would have to cover issues and events that aren't already being covered; it has to focus on news from public institutions," Kirk said.

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

Joly acknowledged the challenges outlined in the report and said her department would review its findings, but said it's "too early to speculate on possible policy outcomes."

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 it 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.

Television and radio newsrooms have also felt the squeeze. 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 — "The Shattered Mirror: News, Democracy and Trust in the Digital Age" — relied on a half-dozen roundtables, polling and focus group research to reach its findings about how Canadians perceive the relationship between the news industry and the country's democratic institutions.

The Canadian Press took part in the roundtables and research.

Pollster Allan Gregg, whose firm Earnscliffe Strategy Group played a role in compiling the findings, said Canadians aren't even aware of a crisis in the news business, since they have faster access to more content than ever before.

A majority of those polled are dead-set against taxpayers propping up the industry, Gregg added.

The report also recommends allowing non-profit organizations to qualify for charity status under federal law to make it easier for philanthropic foundations to help fund original content — an idea cheered Thursday by Canada's only all-media union.

"We at CWA Canada have been urging this for some time in order to encourage local, non-profit ownership of newspapers rather than the destructive, predatory hedge fund disaster that is Postmedia," president Martin O'Hanlon said in a statement.

Another proposed change would exempt Canadian-owned news outlets from sales tax on advertising and subscription revenue. Greenspon estimated that would cost the federal government up to $50 million annually, with some of that amount recouped by collecting HST or GST on subscriptions and advertising for foreign outlets that are currently exempt from the tax.

In April, Joly launched a public consultation on media and Canadian content in a digital world that has heard a range of suggestions, including calls for new fees or taxes on foreign-owned digital media players.

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.

Industry observers expect the minister to release the results of the consultation within days.

— Follow @tpedwell on Twitter

 

Terry Pedwell , The Canadian Press

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Thu, 26 Jan 2017 17:01:33 -0500

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