Peter Menzies: Budget 2025 fails to bail out the legacy media
And they aren't happy about it.
By: Peter Menzies
When Pierre-Karl Peladeau was a newspaper baron, he was notorious for notifying his publishers on a Sunday morning that they were to be in Montreal bright and early the next day for a meeting.
And so they would kiss the wife, the kids and the weekend goodbye and head to the airport for what was a lengthy journey, particularly for those in the west.
The next morning, as the story goes, Peladeau would address them vigorously concerning their shortcomings for a couple of hours and, humiliated, the publishers would make their way back to the airport and home, hopefully on a direct flight.
Fair to say that PKP, as he is also known, can be passionate about his work.
So when Prime Minister Mark Carney and his finance minister, François-Philippe Champagne, produced a budget bereft of the goods the Quebec billionaire media mogul was looking for, it came as no surprise when Peladeau spoke frankly of his displeasure.
“The federal government has completely ignored our industry and turned a blind eye to the crisis that is hitting television broadcasting so hard,” Peladeau said in a third quarter earnings release that showed Groupe TVA revenues down eight per cent.
“There is no tax credit for television journalism, no tax incentives for advertising in Québec and Canadian media, and no information about when the digital services tax already paid by private broadcasters will be refunded.”
Then he got to the rub of the matter — funding the CBC while continuing to allow it to compete commercially for advertisers. This has been a hair up private broadcasters’ spreadsheets for decades. Publishers began to share their frustration when CBC went digital and launched what has become Canada’s top domestic news site, to all intents and purposes entering the newspaper business.
“Furthermore, CBC/Radio Canada’s annual funding has been increased by $150 million without any requirement to eliminate advertising on its platforms or to curb its unfair commercial competition with Canada’s private television broadcasters,” Peladeau said. “Regrettably, this new government has missed an opportunity to support an industry facing ever-growing challenges and job losses at an alarming rate.”
He’s not wrong. Giving CBC an extra $150 million on top of the $1.4 billion already allocated by Parliament is a serious kick in the crotch of the rest of the nation’s news industry. Carney, as he, his entourage and acolytes are quick to remind Canadians, has a doctorate in economics and has run the Bank of Canada and the Bank of England. In other words, he knows how the world works.
And that means he’s more than aware that heavily subsidizing one commercial competitor within an industry will do harm to others, particularly when the industry is one that has been running desperately short of cash.
Sure, the $150 million for CBC was an election promise, so it wasn’t surprising to see it in the budget. But what has frustrated Peladeau and others such as Kevin Desjardins, president of the Canadian Association of Broadcasters (CAB), is that the government didn’t shovel at least some loot onto the other side of the scale.
“The CAB is deeply disappointed that key recommendations to support Canada’s broadcasting sector — namely, the expansion of the Canadian Journalism Labour Tax Credit and increased federal advertising investment in Canadian broadcast media — were not included,” Desjardins stated in a release. “Bolstering the public broadcaster and print journalism alone will not save local news, preserve Canadian content or sustain the broadcast industry.”
To put this all in context, when the government invented the Journalism Labour Tax Credit (JLTC), it did so only for print and online newspapers approved by a panel of its appointees. Pointedly, it was only supposed to be a temporary, five-year bailout. But, as Milton Friedman famously said, there’s nothing more permanent than a temporary government program. The JLTC, which covers up to $29,750 of each newsroom salary, is now as embedded as transfer payments to Quebec and the broadcasters were hoping to join the cashapalooza party.
Hence their disappointment and, hey, who can blame them? We all know it sucks not to be invited to parties.
The CAB, along with News Media Canada — which represents publishers who are comfortable asking politicians for money and favours — had also been campaigning for the government to dedicate a sizeable portion of its advertising to them instead of placing it where people are most likely to see it.
So far, while Ontario Premier Doug Ford thought that hustle made perfect sense, no one else has bought it. But, as they say in sports and gambling, it’s early.
Given that tens of thousands of government jobs were put on the chopping block and Carney’s $78 billion deficit is about $50 billion larger than first planned, some might say the subsidized news industry should quit its complaining and count its blessings. After all, the Local Journalism Initiative and its sidekick Changing Narratives fund remain intact and an extra $38.4 million over three years was tossed into the Special Measures for Journalism (a temporary COVID relief initiative) component of the Canada Periodicals Fund.
Compared to what most folks got out of this budget, that would be considered a win. But the extra $150 million for the CBC turned news media into budget day losers.
So the broadcasters will heighten their appeals for even more help from the CRTC, which is before the courts trying to justify making companies like Spotify and Netflix (which have nothing to do with news) pay into funds subsidizing broadcast newsrooms. And Peladeau will, along with the CAB, continue to campaign for inclusion in the tax credits.
News Media Canada, while jealously guarding its stake in the tax credits, will meanwhile join PKP and the CAB in insisting upon no less than a 25 per cent share of government advertising as a form of subsidy.
The budget has left almost every organization in the news media industry grateful for what they’ve got, but still hungry and begging for more.
Which, if I was a prime minister who understands how the world works, is … exactly where I’d want them to be.
Peter Menzies is a senior fellow with the Macdonald-Laurier Institute, past vice-chair of the CRTC and a former newspaper publisher.
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A lot of the Justin Trudeau agenda was inspired by a nostalgic view of Canada when Pierre Trudeau was in government, and the current Liberals' approach to the CBC and Canadian news media appears to derive from similar sentiment. CBC funding has been cruising on pleasant memories of Hockey Night in Canada, The Beachcombers, and Mr. Dress-Up for decades; news media like big newspapers are regarded as Important because they used to be Important.
It's all out of touch with today's reality, where the top-rated CBC show is re-runs of "Schitt's Creek" (a series that ended 5 years ago) and newspaper circulation numbers that have been on a steady decline since the '90s. The fact is that both CBC and the legacy news media need to count themselves lucky that Mark Carney is focused on other problems and hasn't yet pursued any real efforts to curtail government spending. A rational appraisal of current realities would reveal media subsidies to be a pretty frivolous expenditure compared with almost anything else.
Good column. Jen and Matt often talk about this issue and how Legacy Media has to face modern realities. It's a dilemma for all of us because good journalism is necessary to maintain that a healthy democracy but it requires a budget and it's difficult to hire investigators on a on what's generated by a podcast. All countries need a national broadcaster and, while the CBC's budget seems huge, it's per capita funding is a fraction of what other countries invest in their National broadcasters. CBC should have enough money that it doesn't need advertising. Oh, and yes, CBC does need a serious house cleaning and revamp.