The Journalism and Written Media Independent Panel of Experts released a report that they had provided to the Federal government relating to the 2019 federal budget and the proposals on journalism. Here is a copy of the report. As well here are minutes of their meetings.
The report makes a good case for the urgency of the issue:
The Panel wants to stress that this program alone will not be enough to prevent the disappearance of many essential sources of information, especially small local news media outlets that are not covered by the Budget 2019 measures and that are extremely vulnerable. Other support programs should be considered. It has been well-documented that the written news media industry is in crisis. It is estimated that foreign-owned digital media such as Google and Facebook will take $7 billion in advertising dollars out of the Canadian economy this year. Daily newspaper ad revenues are half what they were a decade ago. According to data compiled by the Local News Research Project, more than 250 Canadian news outlets have closed in the past decade. The Public Policy Forum’s Shattered Mirror report found one-third of journalism jobs disappeared in Canada over a six-year span. Digital-only news outlets are not filling the gap, and foreign-owned digital companies are not funding the creation of Canadian news in any significant way, despite benefiting from the work done by traditional news outlets. The tax credits program, as positive as it is, will not suffice to counter these disastrous effects.
The report suggests "In the interests of moving quickly, we have recommended that the tax credits be implemented and administered directly by the Canada Revenue Agency. We have recommended that the Government appoint an advisory body, with members drawn from the faculty of post-secondary journalism schools across Canada, to assist the Minister of National Revenue with this program."
They also suggested that the government ramp up spending on advertising in newspapers.
"While Government help is welcome, it does not replace Government advertising or compensate for its disappearance. We urge the Government to make a commitment to spend a substantial portion of its annual advertising budget in written news media, as it once did. News outlets in print and digital formats reach larger audiences than ever. They efficiently reach Canadians and are an effective way of communicating important public messages. Yet the Government spends little on these platforms, while directing money to foreign-owned digital companies that do not fund Canadian newsrooms. "
The report then includes
-Proposed interpretation rules and definitions for Qualified Canadian Journalism Organizations
-Proposed structure of an advisory panel to assist in assessing the eligibility of Qualified Canadian Journalism Organizations
-General recommendations of the Journalism and Written Media Independent Panel of Experts
-an Appendix “A” on Les Amis du Devoir
On the subject of Les Amis du Devoir, there was recently in the Globe and Mail an opinion piece entitled "Ottawa’s approach to supporting charitable media foundations is uncharitable – and self-defeating". It deals with The Friends of Le Devoir which is a non-profit so is not able to issue official donation receipts and therefore they argue they cannot fundraise as much. Not sure if I agree with everything they suggest especially since a registered charity could be set up under the current rules to do various activities that relate to journalism such as investigative journalism and many other areas. In fact, in the report it identifies the objects of The Friends of Le Devoir as being "1. raise funds for Le Devoir Inc.; 2. give prize money to journalism students; and, 3. hold public debates on the state of the media/freedom of the press." The first item is not charitable but the second and third may be charitable and there are many parts of journalism that are charitable. If a large paper is only receiving about $500,000 to 1 million in donations per year (ie a small amount in comparison to the newspapers overall budget) it should not be too difficult to establish a registered charity and have the charity hire the newspaper to implement certain charitable projects using a "structured arrangement" with "direction and control". It is unlikely that any Finance proposal is going to allow unlimited donations to be used to support for-profit companies.
The Finance proposals on supporting journalism are convoluted, complicated, cumbersome, bureaucratic and although the subsidies of employees will probably be very useful for some newspapers the parts dealing with the new qualified donee category will probably not be that useful for many organizations. For an industry that is in severe decline, the offers little after a 4-year process of discussion. The fault is not only with Finance. In reality although many foundations say they are interested in improving journalism, their commitment is tepid and few major gifts in Canada involve journalism. The amount that can actually be raised through philanthropy may be smaller than many anticipate and in many cases crowdfunding that relies on a large number of small donors and does not involve registered charities may even be more effective. As well for decades newspapers and others have had the ability to create affiliated charities that could fund certain activities and many of them have not done that and they prefer to wait years or decades for a "windfall" from Finance that may never appear.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.