Senate report makes case to expand newspaper subsidies to Big Telecom

A media subsidy introduced as part of the massive 2019 newspaper industry bailout could soon be extended to broadcasters, despite them being mostly owned by our highly-profitable telecom companies, and the cost to taxpayers could be billions. A recently released Senate report that appears to support the move, however, contains notable omissions and framing choices that warrant closer scrutiny.

The cost to extend the newspaper labour subsidy to radio and TV reporters was first estimated by Marc Miller, our Minister of Canadian Identity and Culture, at an astonishing $6 billion. He quickly walked that figure back, however, posting on X that he had “conflated the projected Film & Video Tax Credits over the next 6 years with the Journalism Tax Credit for the audiovisual news sector.” Consultations on extending to broadcasters the Journalism Labour Tax Credit that newspapers have benefited from for years were announced in the government’s recent spring economic update, with details to come, but events suggest that the move may be a foregone conclusion. “Broadcast journalism in particular is a key part of our community fabric,” reasoned the update. “Supporting the important work of journalists is crucial in our democratic system, ensuring accountability and a well-informed public, especially during a period of global uncertainty.” Such wording led one expert to conclude that the extra expense may be a fait accompli. “It will mean tens of millions of dollars for Bell, Rogers, Corus and other broadcasters,” predicted University of Ottawa law professor Michael Geist on his blog. “The bigger question is whether the federal government should be paying more than a third of the news payroll at the country’s largest vertically integrated communications companies.” The president of the Canadian Association of Broadcasters estimated at $100 million a year the cost of extending to radio and TV stations the tax credit that pays 35 percent of journalist salaries at newspapers. “The existing program is valued at far less than the figure stated by the Minister,” Kevin Desjardins told the industry publication Cartt.

The Journalism Labour Tax Credit was introduced as part of the $595 million bailout package Ottawa granted to the newspaper industry in 2019 after an intense lobbying campaign. It initially paid 25 percent of a journalist’s salary, to a maximum salary of $55,000, but it was raised after more lobbying to the industry’s original ask of 35 percent of a maximum salary of $85,000, which more than doubled the possible benefit. It handed out $71 million at last count in 2024. The bailout, which was first set to expire after five years but was later extended to a decade, came after newspapers dismissed the $50 million Local Journalism Initiative, which had been introduced the previous year to fund reporters to cover underserved communities, as a “Band-Aid solution.” Their lobbying campaign, as I chronicled in my 2023 book The Postmedia Effect, was orchestrated by the then-CEO of Postmedia Network, which is by far Canada’s largest newspaper chain but is somehow owned 98 percent by US hedge funds. Hiring a heavyweight Liberal insider brought publishers immediate access to the corridors of power, which resulted in a reported 79 meetings with senior officials, including in the Prime Minister’s Office. Postmedia and Torstar, our second-largest newspaper chain, had already flexed their muscles in 2017 by trading 41 titles and closing 36 of them, for which they somehow escaped prosecution under the Competition Act despite smoking gun evidence. A credible basis for the bailout had been offered up in 2017 in the form of a think tank report which was criticized by academics for wildly inflating the plight of newspapers.

The lobbying campaign worked so well that publishers, broadcasters, and cultural groups soon reprised it in prevailing on Ottawa to follow Australia’s lead and force digital giants like Google and Meta to also pay them for reporting the news. This time they ran blank front pages for a day in 2021, ironically asking “imagine if the news wasn’t there when we needed it.” They also helped to stifle any resistance to the move by “spiking” several editorials written by academics that had been accepted for publication by editors at major dailies. That resulted in the 2023 Online News Act, which last year brought in $100 million from Google alone after Meta instead blocked news on its Facebook and Instagram social networks, which has depleted traffic to our emerging digital media. That money goes not just to newspapers but also broadcasters, including the CBC, which is capped at $7 million. Broadcasters wanted even more, however, pointing to the market share they were losing to streamers like Netflix and Spotify, which resulted in the Online Streaming Act that now requires streamers to kick back five percent of their revenues.

Now broadcasters want the same labour tax credits that publishers get, despite the fact that they are mostly making healthy profits and tend to be owned by our largest telecom companies, whose profits are scandalous. Bell, which owns CTV, made $10.6 billion in profit last year while Rogers, which owns the Citytv network, made $9.8 billion at a profit margin of 45.3 percent. Their windfall profits annually exceed the GDP of many countries. They are made possible by charging us usurious rates for their services and by ruthlessly laying off workers to keep raising their annual dividends to shareholders. After laying off literally thousands over the past few years, thanks largely to its growing use of AI, Bell announced last week that it is slashing almost 700 more jobs, while Rogers is seeking to sever no fewer than 10,000 of its workers.

Nothing gets the government’s attention like threatened mass layoffs, which brings us to the media’s latest attempt to rake in even more subsidies. A new Senate study, titled Making News Media Sustainable: Options for the Long Term, sets out a credible basis for extending the labour tax credits to broadcasters, framing it as a matter of “platform neutrality” and fairness. “The most obvious lack of neutrality has been the federal government’s exclusion of digital news publishing owned by broadcasting companies from the QCJO program.” The federal government, it adds, has “shortchanged broadcaster-owned digital news publishing through the disproportionate allocation of news licensing payments under the Online News Act.” Broadcasters, however, are granted lucrative licences by the government for free, benefit from “must carry” rules that require cable systems to pay them and make millions through the “simultaneous substitution” of commercials carried on US programming, which is why they were excluded from the labour tax credits in the first place. The report then moves from analysis into advocacy, particularly in its treatment of objections to subsidizing broadcaster-owned outlets. “The unspoken taboo invoked for discriminating against digital news outlets operated by broadcasting companies is that television and radio companies ought to be excluded from public aid because so many networks are owned by large telecommunications companies or conglomerates,” it notes. “If this is the reason, it is invidious and no more compelling than excluding digital news operations owned by billionaires or politically partisan media proprietors.”

The report does make some interesting proposals for improving Canada’s extensive—and expensive—media subsidies regime. They include urging that, instead of being handed out by bureaucrats and political appointees, the money should be administered by an arm’s length agency not under the direct purview of a government minister. It also usefully estimates the cost of subsidies which now cover 11,359 journalists and average $7,405 annually for those at broadcasting companies; $1,889 for those at CBC/Radio-Canada; and $16,458 for those employed by print news publishers (Canadian Dimension has not applied for federal labour tax credits or money from Google, but it has benefitted from the long-running Canadian Periodical Fund, collecting $3,983 in 2025-2026 to support its digital publishing).

The report’s most interesting, if somewhat misguided proposal would reduce or even eliminate subsidies to heavily indebted media companies in order to avoid subsidizing their debt payments. The proposal is clearly aimed at Postmedia, which at last count was $388 million in debt to its US hedge fund owners. “News organizations that intend to carry excessive debt loads indefinitely could be incentivized to renegotiate debt repayment with key shareholders, or sell assets, in order to return to acceptable levels of debt repayments, failing which a mechanism to reduce or eliminate subsidies would kick in.” It justifies this measure in part by noting that “there have been many commentators who have argued that the public interest in sustaining news journalism should not be held responsible for improvident investment decisions.” This misunderstands completely the manner in which Postmedia took over the historic Southam newspaper chain in 2010, which was instead a brilliant investment strategy by the hedge funds. They simply bought up the distressed debt of Southam’s previous owner, Canwest Global Communications, for pennies on the dollar on the bond market and then traded in some of it to take over the company during bankruptcy proceedings. They kept the rest on the renamed company’s books as a source of income and have been stripping its assets and throwing its journalists overboard ever since to keep making those payments, which have now amounted to more than $500 million. Postmedia is not in the newspaper business. It is in the debt collection business, and the subsidies it has lobbied for have helped to keep it attached like a leech to our news media in what it has described as a “key pillar” of its business strategy. The best way to get rid of these vultures would be to simply limit our subsidies to only Canadian-owned companies. The all-devouring Postmedia, which since its 2010 inception has taken over three other Canadian chains, currently qualifies because the subsidies were crafted specifically to include it under the fiction that it is somehow controlled by the two percent of its shareholders who are Canadian.

The report was co-authored by Andrew Cardozo, an independent senator from Ontario who is a former Journalism professor and appointee to the Canadian Radio-television and Telecommunications Commission, and Howard Law. It is Cardozo’s second in a series of reports on the future of news media in Canada, which began a year ago with one titled CBC/Radio-Canada: An essential service. Law is a retired Unifor public relations person and long-time pro-subsidies blogger who authored the 2024 book Canada vs California: How Ottawa took on Netflix and the streaming giants, in which he admitted to advocating for the Online Streaming Act with politicians in Ottawa on behalf of Unifor members, many of whom work in the media. Now he is helping shape the debate among policymakers over media subsidies in Canada. Yet the debate reflected in the report appears narrower than the broader range of academic and policy perspectives on the issue.

The report cites mostly government, consultant and think tank reports, news stories and curiously Law’s own blog. There is no mention of critical Canadian media economics research done by academics, such as those at the Global Media & Internet Concentration Project led by Dwayne Winseck at Carleton University, which publishes a compendious annual report on the state of our media industries. I don’t write about it every year because it weighs in at about 400 pages of heavy reading, but I did last year. Winseck also has a blog he has neglected for years, but he used it recently to weigh in on the broadcaster-funded reports that overstate the sector’s financial distress and thus our profit-gouging telecom companies. This one was so hot that it came with the warning “Read with Caution.” Complaints by the telecoms about their falling media division profits should be taken with a grain of salt, Winseck pointed out. “Their media divisions are flush,” he noted, referring to data in his latest report which showed that Bell’s media division enjoyed a profit margin of 24.1 percent in 2024. “This level of profitability is up year-over-year and would be the envy of most businesses.” Bell’s overall margin is almost double that, thanks largely to profits from providing internet access that approach 50 percent, and from cell phone service that top 60 percent, prompting Winseck to note that “it has room to absorb slimmer profits at the smallest part of its corporate empire.”

And you certainly won’t find any reference in the report to my own books on these subjects. It even gives credit for my proposal to distribute media subsidies democratically by issuing vouchers directly to tax-paying Canadians, which I first floated in a 2024 column and expanded on in my latest book Tomorrow’s News: How to Fix Canada’s Media. The report instead gives credit for the idea to a 2023 study that mentioned vouchers not once.

(Full disclosure: I have never met Law, but we crossed swords on Twitter once or twice before he blocked me. I have posted several comments on his blog entries, none of which he has ever approved for publication. I met Cardozo last year after he invited me to sit on a panel at the University of Victoria which discussed the future of the CBC. I paid my own travelling expenses of about $100 and was in return given a hockey puck imprinted with the logo of Parliament.)

If this report passes muster with Ottawa, it could provide a credible basis for us soon throwing even more money at some of the most profitable companies in Canada. Decisions involving billions in potential subsidies deserve broader engagement with independent and critical scholarship on Canada’s media system.

Marc Edge is a freelance writer who lives in Vancouver. His books and articles can be found online at www.marcedge.com.