Federal government extends 'temporary' $595 million media slush fund

In 2022, the feds did not detail individual payments to the media as part of its taxpayer handout to the industry. Instead, they invoked confidentiality. It is only known that the Winnipeg Free Press receives $1 million annually in payroll subsidies.

Federal government extends 'temporary' $595 million media slush fund
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With Bill C-18 consultations looking bleak for the federal government, the Trudeau Liberals have prolonged their costly media bailout fund at the taxpayers' expense.

On September 12, cabinet extended the $595 million media slush fund into 2025, despite pledging years ago that "you can't give them forever."

The subsidy program rebates cabinet-approved media for a quarter of its payroll, up to $13,750 per newsroom employee and 15% tax credits for subscribers.

Press lobbyist Bob Cox, who advocated for the subsidies on behalf of the mainstream media, will sit on a bailout review panel for the next two years to assess further bids for funding.

Cox, as then-chair of the Canadian Newspaper Association, successfully campaigned for the subsidies in 2019 on a promise they would be temporary, reported Blacklock's Reporter. The bailout money was initially set to expire on March 31, 2024. 

"I wonder if you can give us a sense of how long this transition period will last?" asked Liberal MP Rachel Bendayan. 

Cox replied: "The program is envisioned to be for five years, and I felt that was an appropriate period for the transition. There will be news outlets, newspapers, that fail the transition, and you can't give them forever."

"There does need to be a deadline," he said. 

In 2022, the federal government did not detail individual payments to the media as part of its $595 million handout to the industry. Instead, the Liberals invoked confidentiality. 

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

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

It is only known that the Winnipeg Free Press receives $1 million annually in payroll subsidies.

"We will have to save ourselves," testified Cox 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," he said, as then-publisher of the Winnipeg Free Press. 

On June 30, then Heritage Minister Pablo Rodriguez told reporters his government would ensure newsrooms have resources beyond the existing funding programs and tax credits. However, he did not elaborate at the time.

Taxpayers subsidize Canadian media at $595 million — in addition to the $1.2 billion given to the CBC annually.

"We have to make sure that newsrooms are open, that [journalists] can do their job, and [they] have the resources necessary," said Rodriguez.

In an April 27 testimony at the Senate transport and communications committee, Heritage Canada managers acknowledged the bailout neither saved jobs nor improved newspapers, reported Blacklock's Reporter.

"We have seen a significant decline in journalism," testified Thomas Ripley, associate assistant deputy minister.

According to a March 3 Heritage Department briefing note, Federal Support For Journalistic Content, the labour tax credit did not reverse the "decline in news," he said, with 78 newspapers — including 65 weeklies — closed since 2019.

"Around 500 newsrooms closed their doors across the country…and they will continue closing their doors," added Rodriguez on June 30. "The status quo is not working."

On July 3, Conservative MP Michelle Rempel Garner said taxpayer handouts of newsrooms should be a ballot question for voters in the next general election.

Millions in cabinet-approved aid compromised the media with "little corporate incentive to bite the hand that feeds them," she said. 

"The federal Liberal government is probably thrilled with this new reality," claimed the MP, as "They benefit from a lack of journalistic capacity to scrutinize their operations."

According to a poll, over seven in 10 (71%) Canadians do not trust government accounts of events.

At the 2023 Liberal convention, members urged journalists not to fill space with opinion journalism, as it "has devalued mainstream media as a source of news and information."

"Be it resolved that the Liberal Party of Canada Request the Government provide additional public funds to support advertisement-free news and information reporting by Canadian media through an arm's-length non-partisan mechanism," said Resolution 472.

According to Blacklock's Reporter, Rempel Garner described the media bailout as "crazy" and a "further erosion of what nominal semblance of independence from the government these news outlets currently have." 

"Canada's journalism is far weaker [now] than under any other government," she said.

"For all the subsidies and interventions the Liberals have put in place since coming to power in 2015, thousands of journalists' jobs have been lost as dozens of newsrooms have been shuttered."

In a 2022 interview with The Taxpayer, Conservative Leader Pierre Poilievre said he opposed the media slush fund. "I will cut corporate welfare," he said then.

"I think we need a market-driven media that benefits by subscriptions, advertising, sponsorships and donations rather than government subsidies," said Poilievre.

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  • By Ezra Levant

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