PBO undertakes review of Trudeau's 'costly' media bailout that created no jobs

The Trudeau Liberals in their 2023 Fall Economic Statement doubled newsroom rebates from a maximum $13,750 per employee to $29,750 amid calls for more subsidies. When Parliament first approved taxpayer handouts for the media in 2019, it did not produce any net job creation.

PBO undertakes review of Trudeau's 'costly' media bailout that created no jobs
THE CANADIAN PRESS/Adrian Wyld
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The Trudeau Liberals are drawing the ire of the Parliamentary Budget Office (PBO) over its costly bailout of government-approved media. 

A PBO analysis of Canadian newsroom subsidies — the first of its kind — follows the doubling of payroll rebates to $29,750 a year for broadcasters and online media, reported Blacklock’s Reporter.

The Trudeau Liberals in their Fall Economic Statement last November 21 doubled newsroom rebates from a maximum $13,750 per employee to $29,750 amid calls for more taxpayer subsidies.

The expanded rebates propose to increase the cap on labour expenditures per eligible newsroom employee from $55,000 to $85,000. It further proposed that the Canadian journalism labour tax credit rate be temporarily increased from 25% to 35% for a period of four years. 

Budget Officer Yves Giroux is "requesting specific data" as part of his report, including figures on the number of newsroom employees identified in rebate claims and their salaries. The Canada Revenue Agency (CRA) manages rebates, he writes, who will be relied on to provide "timely access to quality information held by government departments."

"Promoting greater budget transparency and accountability are the Budget Office’s primary objectives," clarified Giroux.

As part of the 2023 Fall Economic Statement, the federal government agreed to subsidize government-approved media until at least 2027 — two years after the next fixed election date, set for October 2025.

Non-subsidized media uncovered the news of an increased and extended media bailout after the Feds attempted to bury it in the fiscal update.

The previous $595 million bailout was set to expire in March — 18 months shy of the next election.

"The financial situation for most news publishers is extremely challenging," Paul Deegan, CEO of News Media Canada, wrote the Commons finance committee last September 15. "It will remain so for many in the short to medium term."

When Parliament first approved taxpayer handouts for the media in 2019, it did not 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.

Nevertheless, Deegan also asked that Parliament award tax credits to newspaper advertisers and bolster its own advertising sixfold to $35 million annually. 

"The recommendations are concrete steps the government can take to address this," he wrote. "Given the precarious state of the news publishing industry, these necessary steps should be addressed."

In contrast, Official Opposition leader Pierre Poilievre has repeatedly quashed future handouts to the media under a Conservative government. 

"We are going to make sure the government does not use tax dollars to leverage news coverage in its favour," Poilievre told reporters January 12. "Right now, Justin Trudeau is censoring those he disagrees with and trying to buy off the rest. That undermines confidence among Canadians in the news media."

Poilievre in a 2022 interview with The Taxpayer, a periodical published by the Canadian Taxpayers Federation (CTF), said: "Frankly I am against all kinds of bailouts, not just for the media."

"We need a market-driven media that benefits by subscriptions, advertising, sponsorships and donations rather than government subsidies," he said. "I am against bailouts."

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