Newspaper chain lobbying for media bailouts reports $6 million in operating losses last year

FP Newspapers Inc., the publisher for the Winnipeg Free Press and the Brandon Sun, reported a $6,258,000 operating loss last year. Meanwhile the Trudeau Liberals doubled the legacy media slush fund and extended it twice last fall.

 Newspaper chain lobbying for media bailouts reports $6 million in operating losses last year
The Canadian Press / Adrian Wyld
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The architect behind the Liberal media slush fund lost more than $6 million in operating expenses last year, new records show.

FP Newspapers Inc., the publisher for the Winnipeg Free Press, Brandon Sun and other Manitoba publications, received $989,000 in payroll rebates in 2023, reported Blacklock’s Reporter.

“We will have to save ourselves,” then-publisher Bob Cox, chair of News Media Canada, testified at 2019 hearings of the Commons finance committee. “All of us are engaged in transforming our business models so we can continue to fulfill the key role that a free press must play in a healthy democracy.”

However, FP Newspapers reported a $6,258,000 operating loss last year as print advertising revenue plummeted 15% from $24,147,000 to $20,630,000. Circulation revenue fell 3%.

The $595 million subsidy program reimburses cabinet-approved media for 25% of their payroll, providing up to $13,750 per newsroom employee, and a 15% tax credit for subscribers.

Since Parliament approved the handouts, it has failed to produce any net job creation, according to a 2021 Department of Canadian Heritage briefing note. 

"The decrease in advertising revenues caused by the COVID-19 pandemic led to service reductions and newspaper closures resulting in the loss of more than 2,500 jobs," said the note Improving Federal Support For Journalism.

Cox, who advocated for the subsidies on behalf of the mainstream media, successfully campaigned for the subsidies in 2019 on a promise they would be temporary. The bailout money was initially set to expire on March 31, 2024. 

“The program itself is envisioned to be for five years and I felt that was an appropriate period of time for the transition,” he said. “There does need to be a deadline.”

“Is the five years proposed appropriate in your opinion?” asked Liberal MP Rachel Bendayan. “In my opinion yes,” replied Publisher Cox.

However, cabinet extended the $595 million media slush fund into 2025 last September 12, undermining the initial pledge. 

On November 21, the Trudeau Liberals attempted to bury in their Fall Economic Statement the doubling of newsroom rebates to $29,750 per employee, amid calls for more subsidies. They will now remain in place until 2027.

The expanded rebates proposed increasing the cap on labour expenditures from $55,000 to $85,000 per eligible employee and increasing the Canadian journalism labour tax credit rate from 25% to 35% for four years. 

Another Heritage briefing note claimed the labour tax credit did not reverse the "decline in news," with 78 newspapers closed since 2019. As of June 30, more than 500 newsrooms closed their doors nationwide.

“Asked whether they felt that protecting and supporting the Canadian news industry should be a priority for the federal government, few agreed,” said a September 7 report Continuous Qualitative Data Collection Of Canadians’ Views. “Only a small number believed the news industry in general should be a top priority,” it added.

“It was generally felt most Canadians had access to a wide range of news sources on a variety of platforms and there were currently more pressing issues for the federal government to focus on such as housing affordability and the cost of living,” said Canadians’ Views.

“Asked to what extent this decline in the number of Canadian news outlets was concerning to them, only a small number indicated being worried about this issue,” wrote researchers. 

“While a few expressed concerns that the decrease in news outlets could lead to less legitimate sources being available to Canadians, most believed this did not represent a problem.”

To make matters worse, the federal government has yet to detail individual payments to the media after invoking confidentiality. 

"Confidentiality provisions under Section 241 of the Income Tax Act prevent the Agency from releasing taxpayer information," said Revenue Minister Diane Lebouthillier last Spring.

Newspaper executives helped cabinet design the terms of the bailout agreement in 2019 that concealed payments.

Following the first of two extensions to the media bailout, only the $1 million in subsidies from the Winnipeg Free Press were known.

Budget Officer Yves Giroux is currently analyzing the number of newsroom employees identified in rebate claims and their salaries for an upcoming report.

Millions in cabinet-approved aid compromised the media with "little corporate incentive to bite the hand that feeds them," said Conservative MP Michelle Rempel Garner.

"The federal Liberal government is probably thrilled with this new reality," she added. "Canada's journalism is far weaker than under any other government." 

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  • By Sheila Gunn Reid

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